I’m not just frustrated by the recent recommendations from New View Advisors to HUD. I’m offended by them. These proposals would strip away the very reverse mortgage protections that help the seniors I counsel every day make informed decisions about whether these products truly fit their needs. Worse, they’re dressed up as consumer-friendly reforms when they clearly serve the interests of secondary market investors over the people these programs exist to help.
I’m a HUD-certified housing counselor who has guided seniors across the country through reverse mortgage decisions over the past several years. I sometimes meet with four or five senior individuals and couples per day for 60 to 90 minutes each. I believe in the potential of these products so much that my wife and I plan to use a HECM for Purchase ourselves when I retire in the next decade. I’ve seen reverse mortgages transform lives, providing financial security and peace of mind for seniors who had few other options.
But I also recognize that reverse mortgages aren’t right for everyone. That’s precisely why the recent recommendations from New View Advisors to HUD trouble me so deeply. Their proposals would weaken the very consumer protections that help seniors make informed decisions about whether these products truly fit their needs.
When industry insiders propose regulatory changes, I’ve learned to ask a simple question: who benefits? In this case, the answer points clearly toward secondary market investors and away from the seniors these programs exist to serve.
Understanding Who New View Advisors Really Serves
Before examining their recommendations, we need to understand New View Advisors’ business model. They don’t originate reverse mortgages. They don’t counsel seniors. They operate in the secondary market, helping institutional investors buy, sell, and manage HECM-backed securities.
I’m not anti-investment. I hold investments on Wall Street myself. That said, I prioritize ethical models of investing where possible.
Clients of New View Advisors are financial institutions, not individual seniors. Their revenue comes from fees charged to these institutional players for advisory services, portfolio management, and market analysis.
This creates specific incentives. Anything that increases secondary market activity benefits New View Advisors. Anything that makes reverse mortgages easier and faster to originate creates more securities to trade. Anything that reduces lender costs or risks makes the product more attractive to their institutional clients.
I don’t question their expertise in the secondary market. But their recommendations reflect the priorities of Wall Street investors, not the 75-year-old widow sitting in her kitchen, talking to me on the phone, and trying to figure out how to keep her home of 15 years while trying to pay off her debts.
The Insurance Premium Shell Game Would Remove Reverse Mortgage Protections
New View Advisors proposes lowering upfront mortgage insurance premiums. They frame this as helping seniors by reducing costs.
But the math doesn’t work that way.
The FHA insures HECM loans against losses. When borrowers or their estates can’t repay the full balance, the insurance fund covers the difference. This protection benefits both borrowers (who never owe more than their home’s value) and lenders (who get repaid even when home values fall short). Government insurance also keeps interest rates on HECM loans about three percentage points lower than interest on proprietary, non-government-insured loans.
Insurance premiums must cover expected claims. It’s just one of many reverse mortgage protections. Lowering upfront premiums leaves the FHA with two choices: reduce coverage or shift costs to higher ongoing premiums.
I’ve counseled enough seniors to know what happens with higher ongoing premiums. These charges hit their available equity every month and compound over time. A senior who saves $3,000 upfront but pays an extra $50 monthly loses money after just five years. Over 15 years, that extra $50 monthly costs $9,000 plus compounding effects.
But here’s what matters to secondary market players: they care about origination volume today, not costs 15 years from now. Lower upfront costs make reverse mortgages easier to sell. More originations mean more securities to trade. The higher long-term costs? Those become the borrower’s problem, not theirs.
I plan to use a HECM for Purchase myself in the next decade. When I do, I’ll want an insurance structure that provides maximum long-term value, not one designed to boost short-term originations for Wall Street.
The Myth of Too Many Options
New View Advisors suggests streamlining HECM options because borrowers supposedly face too many choices.
I speak with seniors from around the country every day, helping them understand their options. You know how many federally insured HECM products exist? Two. Fixed-rate and adjustable-rate. That’s it.
Oh sure, the adjustable rate has three ways to disburse benefits to the borrower, but I have yet to encounter a senior who has said, “I can’t decide between all of those options!”
Add the private market products from Finance of America, SmartFi, and Longbridge, and we’re talking about maybe 10-12 total reverse mortgage products nationwide. Most borrowers qualify for only two or three based on their home value, location, and financial situation.
Compare this to traditional mortgages. I don’t hear anyone suggesting that forward mortgage borrowers face too many choices. Nobody proposes eliminating 15-year mortgages because 30-year already mortgages exist. Nobody argues that adjustable-rate mortgages should disappear because they’re more complex than fixed-rate products.
Why would we apply a different standard to seniors?
I’ve counseled a 62-year-old facing unexpected medical bills who needed maximum upfront cash. I’ve worked with a 75-year-old creating a standby line of credit for future flexibility. I’ve helped a couple with a $2 million home who didn’t qualify for a HECM but benefited from a jumbo proprietary product. Different borrowers have different needs requiring different products.
Removing choices doesn’t help these people. It forces them into products that might not fit their circumstances. It reduces competition that drives innovation and better terms.
The claim that seniors can’t handle a handful of options insults their intelligence. With proper counseling, my senior client-borrowers understand their choices and make informed decisions. The answer to complexity isn’t fewer options. It’s better support, which brings me to the most troubling recommendation.
Why Eliminating Counseling Removes Reverse Mortgage Protections and Is Dangerously Short-Sighted
New View Advisors calls for eliminating or reducing the counseling requirement. This proposal to eliminate such reverse mortgage protections reveals exactly whose interests they serve.
I need to be clear about something: I deeply respect reverse mortgage loan officers. I believe the overwhelming majority genuinely care about educating their clients, not just earning commissions. Many spend hours explaining products, answering questions, and ensuring borrowers understand what they’re considering.
But loan officers operate within structural constraints they can’t escape. They earn commissions when loans close. They work for companies that profit from originations. Even the most ethical professionals face unconscious pressure to emphasize benefits and minimize concerns.
I answer only to my nonprofit agency and HUD standards. I have no financial stake in whether a borrower proceeds with a loan. This independence creates fundamentally different conversations.
Here’s what I see repeatedly: Clients come to me after spending one to three hours being educated by their loan officer. They arrive feeling informed and ready to complete the counseling requirement. Then something interesting happens.
Almost invariably, these same clients tell me they learned far more than they expected during our session. They feel significantly more confident about their decision moving forward, whether they choose to proceed or not.
What happens in that counseling session that didn’t happen during hours with their loan officer?
Sometimes clients discover they misunderstood key features they thought they grasped. One client believed “you can never lose your home” meant she wouldn’t need to pay property taxes and insurance. Another thought the line of credit was guaranteed to grow regardless of whether he maintained the property. These misunderstandings could have led to defaults and foreclosures.
Sometimes we identify alternatives they hadn’t considered. I’ve helped clients discover they qualified for property tax assistance that eliminated their need for a reverse mortgage. I’ve identified situations where a traditional loan products might serve them better. I’ve suggested strategies their loan officer couldn’t mention without killing the deal.
Sometimes the counseling reveals family dynamics that need addressing:
- Adult children who weren’t informed about the decision.
- Spouses who haven’t discussed what happens when one passes away.
- Heirs who don’t understand their options after the borrower’s death.
I remember clients whose adult son lived with them. The loan officer had no reason to know about this arrangement. During counseling, we discussed what would happen to their son after their death. The reverse mortgage would come due. their son would need to refinance, buy the property, or move out. He had a developmental disability, though. This family needed a plan. Without counseling, their plan was incomplete.
These aren’t rare exceptions. They represent routine aspects of effective counseling that protect both borrowers and the industry’s reputation.
Every single one of my clients benefits directly from counseling. Their heirs benefit indirectly through fewer foreclosures due to borrower default or heir inaction. The industry benefits through stronger program sustainability and reputation.
So why does New View Advisors want to eliminate this protection?
Because counseling reduces origination volume. Every counseling session takes time. Some borrowers discover better alternatives. Some identify problems that prevent closing. Fewer closings mean fewer securities for the secondary market to trade.
From Wall Street’s perspective, counseling represents friction in the origination pipeline. Remove it, and volume increases.
From my perspective (sitting on the phone or in a virtual room with seniors making irreversible decisions about their most valuable asset), counseling represents the difference between informed consent and potential disaster.
The Dangerous Precedent of Removing Reverse Mortgage Protections
Here’s what concerns me most about these recommendations: removing reverse mortgage protections from consumers always carries the likelihood, not just the possibility, of a move toward unscrupulous business practices.
I believe most reverse mortgage professionals operate ethically. But industries don’t stay ethical through good intentions alone. They stay ethical through structures that align individual incentives with consumer welfare.
Counseling creates accountability. Loan officers know their clients will receive independent review. This knowledge encourages thorough education and honest disclosure. Remove that accountability, and the pressure to close deals could overwhelm even well-intentioned professionals.
I’ve worked in this field long enough to be acquainted with the scandals that damaged the industry’s reputation just 10 to 15 years ago. Despite major changes and improvement, mistrust remains this many years later. And that was due to aggressive marketing to vulnerable seniors, misleading claims about benefits, and inadequate disclosure of costs and risks. Those problems emerged when consumer protections were weaker.
We strengthened counseling requirements precisely because they work. They catch problems before they become disasters. They provide independent verification that borrowers understand what they’re signing.
Eliminating counseling would reverse this progress. It would prioritize origination volume over informed consent. It would remove the one touchpoint where seniors receive guidance from someone with no financial stake in the transaction.
That’s not reform. That’s regression disguised as simplification.
What Real Reform Would Look Like
I want reverse mortgages to reach more seniors. I believe these products can transform lives when used appropriately. As noted, I plan to use one myself.
But expanding access requires strengthening protections, not weakening them. Real reform would look different from New View Advisors’ proposals.
Real reform would improve counseling quality and accessibility. It would expand product options to serve diverse needs. It would strengthen disclosure requirements. It would enhance underwriting to better assess borrowers’ ability to maintain property charges. It would create better tools for comparing HECM and proprietary products.
These improvements might actually increase industry costs in the short term. Better counseling costs more to provide. More product options cost more to develop. Stronger underwriting reduces origination volume.
But consumer-focused reform strengthens long-term sustainability. It reduces defaults that damage the insurance fund. It prevents scandals that invite regulatory crackdowns. It builds trust that expands the market over time.
Industry-focused reform does the opposite. It prioritizes today’s profits over tomorrow’s stability. It treats consumer protections as obstacles rather than assets.
My Perspective as a Future Borrower
I mentioned that I plan to use a HECM for Purchase in the next decade. This isn’t abstract policy discussion for me. I’ll be the senior sitting on the phone with a counselor making this decision.
When that day comes, I want robust choices that address my specific circumstances. I want transparent insurance premiums that provide maximum long-term value. I want independent counseling that verifies I understand every aspect of the decision, even though I’ve counseled countless others through this same process.
Why? Because I know how easy it is to miss something important. I know how product features interact in complex ways. I know that stress and emotion can cloud judgment even for informed consumers. I know that having someone with no financial stake in the transaction review my decision will make me more confident, not less.
If New View Advisors’ recommendations become reality, my wife and I will face fewer choices, potentially higher long-term costs, and no independent verification of our understanding. That doesn’t serve us as future borrowers. It serves the institutional investors who want more volume to trade.
Final Thoughts
New View Advisors has expertise in the reverse mortgage secondary market. I respect that expertise. But their recommendations reflect the priorities of Wall Street investors, not seniors making life-changing financial decisions.
I’ve sat with many seniors over the years. I’ve seen reverse mortgages provide crucial financial security. I’ve also seen how counseling protects borrowers from misunderstandings that would lead to disaster for themselves or their children.
- Lower upfront insurance premiums that shift costs to ongoing premiums hurt borrowers who keep their loans long-term.
- Reducing product variety limits choices that help borrowers match products to their needs.
- Eliminating counseling removes critical consumer protections that benefit every single client I serve.
These recommendations serve lenders who want higher origination volume, simpler operations, and fewer obstacles in the sales process. They serve secondary market players who want more securities to trade. They serve institutional investors who want more product to buy.
They don’t serve the 68-year-old widow trying to stay in her home. They don’t serve the 72-year-old couple creating a financial safety net for retirement. They don’t serve the 76-year-old veteran who needs to understand all his options before making an irreversible decision.
And they won’t serve me when I become that borrower in the next decade.
Seniors deserve reforms that strengthen protections, expand choices, and prioritize their interests over Wall Street convenience. We deserve an industry that serves us, not one that asks us to sacrifice our protections for its profit.
The reverse mortgage industry needs to grow. But it needs to grow the right way, with stronger protections and more choices, not fewer. That’s how we build sustainable success that serves both borrowers and the industry over the long term.
I’m Todd Christensen, and I founded HECMCoach.com to help professionals understand how to truly serve senior clients’ interests when discussing reverse mortgages. If you’re a real estate professional, financial planner, or attorney who wants to guide clients through these decisions with their best interests first, I offer educational resources, training materials, and consulting services designed specifically for professionals who share that commitment.
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