Meeting with Brian Montgomery (July 2018)

(Meeting participants, from left to right: Kyle Williams, National Urban League; Simone Griffin, HomeFree USA; Lot Diaz, Unidos US; Karen Hoskins, NeighborWorks America; Bruce Dorpalen, National Housing Resource Center; Jennifer Murphy, HomeSmartNY; Brian Montgomery, HUD, FHA Commissioner; Gene Spencer, Homeownership Preservation Foundation; Linda Ingram, Beyond Housing; Ellie Pepper, Empire Justice Center; Sarah Gerecke, HUD Office of Housing Counseling; Ruth Roman, HUD Office of Housing Counseling)

This July, key leaders from the housing counseling community met with FHA Commissioner Brian Montgomery to strategize on how the housing counseling can increase and sustain homeownership.  Brian was deeply knowledgeable, committed to the mission of HUD, and supportive of housing counseling. Here are some of the highlights from the meeting.

Disaster Recovery: In response to a question about how housing counseling could most effectively help HUD to fulfill its mission, Mr. Montgomery singled out disaster recovery. He stressed the need to have counselors prepared and trained in advance of disasters, rather than trying to play catch up in the aftermath of a disaster. Mr. Montgomery is interested in engaging with the FEMA Administrator on how to bring housing counselors into the early phases of the recovery process. Mr. Montgomery also believes representatives of the housing counseling community should be represented in local emergency preparedness committees.  We were given two follow-up assignments: to identify the top things the FEMA administer should know about housing counseling and to identify the top things a homeowner should know about disaster preparedness.

Prepurchase Counseling: Mr. Montgomery is supportive of prepurchase counseling and having an independent advisor for the buyer.  He did express concern about some downpayment assistance programs, which have very aggressive premium pricing to pay for the downpayment. The meeting provided the opportunity to begin the conversation about how to increase the use of housing counseling on FHA-insured loans.

Delinquency Counseling: We walked through the Urban Institute research documenting the success of delinquency counseling during the Foreclosure Crisis. We discussed the importance of housing counselors having access to the FHA National Servicing Center to prevent unnecessary and expensive foreclosures. We also asked Mr. Montgomery to consider getting mortgage servicers to pay for delinquency counseling services for FHA-insured loans on a fee-for-service basis.

HECM Reverse Mortgages: HECM loans are the biggest challenge for the FHA Mutual Mortgage Insurance Fund. Mr. Montgomery attributed a significant blame for the problems with HECM loans to inaccurate appraisals, i.e. an overvaluing of the property.  He did recognize the value of having housing counselors when a borrower dies to work with surviving spouses and family members, when forced placed insurance is proposed, and when there are problems paying property taxes or homeowners insurance.

Next Steps: We will develop a detailed list of proposals for him and aim to have a follow-up meeting in the fall.