Mortgage industry officials warn against stopping reverse mortgage schemes without immediate legislative action

Boston – Hundreds of seniors seeking financial stability through reverse mortgages could see their plans halt unless the Massachusetts legislature acts to extend the governor’s COVID emergency order that has expired on December 15th.

At stake is state law that requires in-person counseling for all reverse mortgage applicants. Massachusetts is the only state in the country that does not allow reverse mortgage counseling by phone or video conference.

However, Governor Charlie Baker introduced a COVID-related measure in April 2020 that temporarily allowed counseling by phone or video conference. This measure, which allowed seniors and counselors to interact without fear of transmission of COVID, expired on December 15.

If the legislature had extended the ordinance as planned, the crisis would have been avoided.

A bill, H1146, which would make telephone and video counseling permanent is pending. This bill will probably not be implemented until next spring. In the meantime, elderly homeowners are left with the dilemma created by legislative inaction.

George Downey, founder of Harbor Mortgage Solutions at Braintree and a board member of the National Reverse Mortgage Lenders Association, urged the Legislative Assembly, which meets on Thursday, to pass the measure.

“If they do nothing, the ability of hundreds of seniors to build on their home equity during this extremely stressful time will be made impossible. There is no rational reason why Massachusetts should be so out of step with all other states when it comes to giving seniors the flexibility to get safe and effective reverse mortgage advice ” Downey said.

Multiple factors are contributing to the likely shutdown, Downey said.

Only eight reverse mortgage counselors are currently licensed in the state. None of them schedule internal meetings due to COVID-related issues, including the rapid spread of the Omicron variant.

As a result, seniors must visit one of the state’s six counseling offices, located in Quincy, Agawam, Hyannis, Auburndale, Stoneham and Woburn.

“For many seniors, having to travel such long distances for in-person meetings amid heightened concerns over COVID is a no-starter. Not having the ability to conduct these sessions by phone or video conference is an insurmountable hurdle, ”said Downey.

The Massachusetts Mortgage Bankers Association and the National Reverse Mortgage Lenders Association have sent letters to legislative leaders calling for passage of the omnibus bill. According to the MMBA, some 1,500 Massachusetts seniors use reverse mortgage products each year.

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