9.3.26 Industry Tidbits; NRMLA’s Steve Irwin on Reverse Mortgages; Bonds Quieting Down

Robbie ChrismanWelcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Christman. Topics on today's episode include some tidbits from around the industry, why lots of news can help rates slightly. And my interview with Nirmala's Steve Irwin on the reverse mortgage space. Here, take a listen to a little preview. When we think about the HECM space, there's also now this proprietary reverse product. For the uninitiated, myself and Clue, can you talk about the differences, what we're dealing with here? Can you label some of the different products in the space?Steve IrwinSure. When the FHA product was launched, the HECM product was launched, its intent and its mission was to create a foundation on which private proprietary products could be built and introduced. There will always be a place and need for an FHA insured product, but there are niches that don't get met, or their needs and wants that don't get met with an exclusive FHA insured product. Just the jumbo space. When you think of proprietary products, people oftentimes pivot and think of, oh, that's a jumbo product. And indeed, those products can solve for home values that are above uh the $1.2 million lending limit mandated on the FHA product. We see proprietary products going up to four and five million dollars of homes, and that's great. There are also gaps in what the HECM product can do for consumers. A consumer may have at time of underwriting an issue regarding unsecured debt, for example, which the HECM product through its regulations cannot solve with the loan proceeds. Private label products can solve that. There may be an issue with a condo approval that a proprietary product can't solve. Credit underwriting versus strict financial assessment underwriting may streamline the process. So it could be an easier, faster solution for somebody looking to monetize that home equity. But there are limitations also on the proprietary product side. They're not available in every state. So there you go. Um there are markets that the economies of scale are just not there yet to serve certain uh regions in the country, more rural uh property, etc. So we'll always rely on the FHA insured HECM product to remain in place and be that strong foundation. But we're seeing uh private products, uh proprietary products get introduced in more and more states. And uh there are always new and exciting product attributes being introduced and product variants being introduced, which allow more and more individuals to uh consider the reverse mortgage product as a responsible retirement tool.Robbie ChrismanThanks to Zillow Home Loans, Zillow's in-house mortgage lender, for sponsoring this week's podcasts. By integrating Zillow's real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. Zillow Home Loans is an equal housing lender. Change is constant for us in residential lending, especially when it comes to the intersection of politics and lending and real estate having unintended consequences. Apparently, President Trump's visa crackdown has triggered a Texas housing bust, according to some, although that sounds a little partisan to me. In March 2026, Trump offered removing regulatory barriers to affordable home construction. The purpose was to remove or streamline regulatory barriers, speed up permitting processes, and improve home construction. But we know that the federal government doesn't control home construction as it's mostly under state or local jurisdiction. We remain hopeful. There's something going on with RESPA and Rocket Mortgage out there. Rocket Mortgage is stepping up its effort to win brokers from rival United Wholesale Mortgage, announcing a program designed to help brokers move their business to Rocket while offering existing Rocket partners a $10,000 bonus for referring UWM brokers. Austin Nemiek, Chief Revenue Officer of Rocket and friend of the podcast, unveiled the program, calling they're called the Moving Squad during a Rocket Pro experience event Tuesday, attended by mortgage brokers. Rocket is offering McKinsey style consulting on how to leave a competitor and tying it to a fat incentive. The broker must terminate with UWM, get approved, and be actively originating. I don't quite know the details about how exactly the program will operate, but clearly $10,000 is a thing of value. So the question will likely boil down to whether the payment is seen as made for referral of settlement services or something else, like a recruiting bonus. Meanwhile, HUD's old definition of referral as affirmatively, affirmatively influence could also factor in the analysis depending on the program's RESPA narrative. That is, if what is really happening is that Rocket is asking brokers to negatively influence other brokers from working with UWM, then that might not be a referral as defined by RESPA as regulators. Ironically, the concept of whether you could pay someone to influence a borrower not to work with a particular provider was discussed on our mortgage law today show in July. You can find the link to that on YouTube or at ChrismanCommentary.com. And we have some new MA news out there. Nexa Lending announced that mortgage nerds, led by longtime mortgage professionals Mike Cox and Brian Hoffman, is joining the Nexa platform following an approximately 18-month search for the right home for the company's next stage of growth. Its affiliated third-party processing company, Processing Nerds, will also continue serving mortgage brokers and originators across the country, including Nexa producers. Anyways, Treasuries ended yesterday flat, which was impressive given fresh 2026 highs in all Japanese government bond yields and tenure yields in Germany, France, and the UK. Domestically, the 30-year yield is now back at levels seen before a Treasury Secretary Bessent's attempt to contain borrowing costs. The move higher in bond yields has also driven markets to price in roughly a 70% chance of a September U.S. rate hike from the Fed. Isn't this what Chair Warsh wanted by giving a little forward guidance and instead letting markets figure things out on their own? Warsh's argument that financial conditions remain insufficiently restrictive due to resilient credit markets and relatively easy lending standards reveals the Fed's current dilemma. Despite pockets of weakness, accommodative overall financial conditions continue to support demand, giving policymakers room to maintain a hawkish stance and keep pressure on rates. Warsh can impress investors with his anti-inflation zeal, or he can give President Trump the monetary policy he demands, but not both. The Fed's beige book found that economic activity increased modestly over the past two months, with strong data-centered demand helping drive growth and manufacturing benefiting from defense and data center orders. While the overall report remains positive and high-end spending is holding up, businesses reported mixed sentiment and greater consumer price sensitivity amid uncertainty over energy costs and geopolitics. For today's interview, I wanted to welcome to the show NRMLA's Steve Irwin to talk about the reverse mortgage space. NRMLA stands for the National Reverse Mortgage Lenders Association. And Steve is president and has been since November 2019. He has over 30 years of working in the reverse mortgage industry and frequently speaks on behalf of the reverse mortgage industry to lawmakers and regulators. And today he speaks to me. We're obviously here to talk about the reverse mortgage market. We see volumes continue to take out, I should say, drastically, rise at this point. There's been huge growth in reverse mortgages. But from your your perspective, you're obviously the expert here. Maybe talk about what we've seen from the reverse space in general and how things have trended here a quarter of the way into the 21st century.Steve IrwinYeah, awesome. I first of all, I want to thank you for having me on. It's a pleasure to chat with you. We here at NRMLA in Washington, D.C. are indeed fans of your podcast. So it's a pleasure to be here talking with you today. I also want to just take a moment to applaud the team at New View Advisors, Michael McCulley and Joe Kelly, with the launch of their proprietary reverse mortgage production index. For a long time, the only publicly available data sets on reverse mortgage production has necessarily had to focus on the FHA insured HECM reverse mortgage product. And to the uninitiated and those who weren't as familiar with the marketplace, it could seem like the reverse mortgage marketplace has stagnated over the past few years. Lenders and NRMLA members have known intuitively that this has not been the case. We're seeing an uptick in inquiries. We're seeing an uptick in anecdotal data sets, but not publicly available, verifiable data sets, that indeed it's a marketplace that's expanding and that acceptance is growing and increasing. And thanks to New View Advisors, we now have this publicly available data set which confirms what I have known for some time. So we we're seeing an expanding marketplace. We're seeing an increase in willingness applicants to monetize their home equity as part of a responsible retirement plan. And it's exciting times indeed.Robbie ChrismanThe home equity space has dealt with what I would call a PR issue. And that's not just limited to the reverse mortgage space. I mean, I mean home traditional home equity line of credit products or various lending products. They've dealt with kind of borrower reluctance out there. And I want you to talk to the reverse mortgage space. What have historically been the reluctance sees of borrowers? You mentioned a willingness to monetize in your first answer. And so I want to know how that's the PR narrative around these products has shifted.Steve IrwinI think consumer acceptance is increasing. I think that the industry has done a tremendous job educating consumers, regulators, legislators about how these products work and what consumer protections are indeed in place, how they work. So education has gone a long way as more and more individuals pursue alternate ways to finance retirement. We're seeing home equity becoming part of that conversation. And it's not just uh part of the conversation relative to reverse mortgages, it's not just HELOCs. There's also the alternative of selling a current home and right sizing into an appropriate place so that they can effectively age in place. But that is requiring the utilization of that accumulated equity. I mean, look, there's over $14 trillion in accumulated equity that older homeowners have. And there are strains into retirement finances. So it's becoming a solution and it's getting understood better. Education is helping a lot. In the reverse mortgage space, we also see not only education and resolving misperceptions, but we also see very successful securitizations. The end investor community is very happy. That is uh helping fuel additional research and development and how these products might be brought to market. We're seeing the expansion of availability into more states. Distribution was limited just because you need state-by-state approval to launch some of these products. And as variants are uh created on these products, you need additional state approvals. We see changes and adjustments in some of these product attributes meeting consumer need, meeting the consumer effectively where they are in terms of their retirement financial picture. And we're also seeing in the reverse space a broader uh distribution. We're seeing more and more traditional mortgage uh loan officers turning to the reverse mortgage suite of products, providing solutions for older homeowners who are coming to them and looking uh for solutions, housing finance solutions. And this again, the reverse is just uh one product in a whole suite of products that these loan officers are offering.Robbie ChrismanYou mentioned that there's still room for education, and I saw a survey recently that has interviewed a bunch of potential homeowners. Most people still think you need to put 20% down on a you know conventional conform first lien mortgage. They don't know anything about down payment assistance work, so that's a much more mainstream space than the reverse space. What gaps are there still in education? What misconceptions do you still feel like are common in the space that that would benefit from some borrower education?Steve IrwinWell, consumer education is necessary, and loan officer education is necessary, regulator education is is necessary. I hear, I haven't uh really launched a consumer survey, but we hear from our members that giving up ownership of the home is still a consumer concern. I don't know how big a concern that is. I think at this point people should be familiar enough. Uh, but that I'm not uh uh out on the streets talking to consumers every day. And if if it's the perception of the loan officer, then that's something that we have to tackle. There is also not a very clear understanding of the non-recourse features of the reverse mortgage suite of products, and I think there has to be a lot uh of education around that, uh, that estates will not owe more than the property value uh when it comes time to settle the loan. Loan officers really need to further understand, and we're seeing a lot of movement in this area, but loan officers of traditional mortgage companies oftentimes think these are very complicated products. It's a loan, it's a mortgage. There's a security instrument and there's a note. What gets complicated is the technology stacks, but as those start talking to each other in the different businesses, then we'll see that perception of complication diminish over time. And regulators also don't fully understand all the consumer uh protections that are in place. I was on a call earlier today regarding uh our efforts uh to get proprietary products uh available in the state of Maryland, and there are just too many concerns that those legislators have around consumer protections, and that's going to take some face-to-face meetings that we'll start scheduling and explain what those protections are for consumers and the heirs of consumers.Robbie ChrismanObviously, not every property qualifies for FHA financing, so it's been very cool to see proprietary reverse mortgages come about. How do you see the product suite continue to trend? How do you how do you see the overall space continue to trend? What lies ahead?Steve IrwinIntroduction of these products in more and more states, I think eventually. Uh, once, for example, there was great success in the state of Tennessee to opening that up uh to proprietary reverse mortgage lending. So we will see more and more states come online. Uh, and I think we'll see an awful lot of innovation uh in the coming year or two. Hybrid products where certain period of time there are payments made, and then that may revert to what is a reverse mortgage. That would uh be exciting. Well, I think we'll see more uh second-lien type products coming out. And what is particularly uh exciting is what we don't know. I mean, what is yet to be thought of uh as the uh evolution of this space continues?Robbie ChrismanLet's talk about NRMLA a little bit. What's been on your desk recently? Objectives, any big announcements, things you're working towards. Uh, give us a little roadmap.Steve IrwinSure. Well, uh, I certainly hope that uh you're able to share with all your listeners that uh our annual uh uh meeting and expo is coming up this November 10 to 12 in San Antonio, Texas, and we're looking forward to that. We have a great uh slate of speakers and a powerful set of breakout sessions that will provide people uh with tools and education that we've been talking about. The other thing, Robbie, that's kind of consumed our attention over the past few weeks has been the CFPB's publication of a request for information around reverse mortgage disclosures. We have such a powerful set uh of members who coordinate and collaborate among competitors to button down really concise and powerful comment letters when these sorts of things are published. Um, so that will be submitted prior to the airtime here. That'll be uh submitted in the middle of August, and we're really excited about that. Uh that being said, uh we have a lot of work going on in enhancing the association's member engagement. We have formed a new uh committee under the leadership of Ellie Johnson and the association's co-chairs, Jim Corey and Mike Kent, to enhance our member engagement, etc. We are also continuing our dialogue with FHA and Ginnie Mae around opportunities for modernization of the FHA HECM program. There's uh not a lot of detail that I'm able to go into at this point, but we've got a lot of uh interesting ideas and very good dialogue with FHA HUD and Ginnie Mae around further modernization of that product, uh, which is exciting.Robbie ChrismanCertainly a lot of exciting stuff. I was excited to have you on today, and you lived up to the billing in my book. So, Steve, I really appreciate the time. I certainly support the efforts of NRMLA. I very much enjoyed the annual conference last year in Minneapolis and wish you uh a very successful one in San Antonio this year. So we'll talk soon.Steve IrwinHey, thanks very much. Take care, nice to talk to you again.Robbie ChrismanToday's economic calendar is already underway. U.S.-based employers announced 52,881 job cuts in August, up 58% from the 33,429 cuts announced in July, but down 38% from the 85,979 layoff plans announced in the same month last year per global outplacement and executive coaching firm Challenger Gray and Christmas. We've also had the July trade balance, revised Q2 productivity and unit labor costs, weekly initial claims, which were in at 206,000, and continuing claims, none of which moved rates. Later today brings final August SP Global U.S. Services PMI and the August ISM non-manufacturing index. After the slew of numbers, agency MBS prices are better than yesterday's close by an eighth to a quarter, the two years yielding 4.33, and the 10 years yielding 4.75 after closing yesterday at 4.80%. Let's wrap up with a joke and some housekeeping. My wife just left me. She says my life revolves around football and she's sick of it. I'm quite upset. We were together for seven seasons. Thanks again to this week's podcast sponsor, Zillow Home Loans, Zillow's in-house mortgage lender. With tools built for modern mortgage lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. To learn more, visit Zillow.com/slash home loans.