As a mortgage broker in Minnesota's Twin Cities, Atare Agbamu promised his elderly clients that the reverse mortgages he sold were regulated to protect them, their spouses and their heirs.

Agbamu was eager to help seniors, having been raised by his grandmother in Nigeria. At industry events, he would bring with him a borrower who had saved her home with a Home Equity Conversion Mortgage, the most popular reverse mortgage product, which is insured by the Department of Housing and Urban Development.

One day in 2008, he came across a letter from HUD to lenders that contradicted one of the assurances he had given his customers. The agency wanted to hold borrowers' heirs responsible for the original loan balance when the property's value had fallen — even though HUD's handbook said they would be on the hook only for whichever amount was lower. Agbamu was outraged.

"It made everyone in the industry a liar," he says. "The reverse mortgage has done great things for people. That is why these things hurt me."

Agbamu started writing blogs and op-eds (including some in National Mortgage News) denouncing the inconsistencies he saw in HUD policies affecting borrowers, their spouses and heirs to the properties. Finding the industry and HUD slow to address these contradictions, he stopped originating loans and became a reverse mortgage consultant who advocates for senior borrowers in his spare time.

The latter role has earned him a reputation in the business as a gadfly to be reckoned with.

"He is very definitely pro-consumer and he is very definitely concerned about their welfare, at times over the industry," says James Veale, senior vice president and branch manager at the San Diego mortgage banker Security One Lending.

Veale met Agbamu at an industry conference in 2006. The lender says he likes to compare notes with Agbamu on HECM issues, even when they disagree.

"He's on the side of protecting seniors almost to an extreme," Veale says. "That's not a bad thing, that's just who he is. I would say in the industry he's a leader in trying to find ways to protect seniors."

Agbamu says his consumer advocacy has cost him financially, but that the results have been worth the sacrifices and produced a net benefit to the reverse mortgage industry.

"It narrowed my opportunities in the business," he says. "I was persona non grata in some sectors of the industry as a result, but thank God I was not dissuaded. Making money's OK. There's nothing wrong with making money, and I paid a huge financial price for focusing on reverse mortgages, but God gave me knowledge about them, so I used it."

His advocacy appears to have been influential, or at least prescient.

In a March 18, 2009 op-ed in National Mortgage News, he decried the 2008 mortgagee letter that he saw as breaking a promise in the HUD handbook: That "the HECM borrower (or his or her estate) will never owe more than the loan balance or the value of the property, whichever is less."

Two years later, three surviving spouses of HECM borrowers and AARP the Foundation sued HUD on the grounds that department had essentially changed the rules in the middle of the game. Shortly afterward, HUD rescinded the 2008 HECM mortgage letter.

In a January 2013 National Mortgage News op-ed, Agbamu addressed the issue of homeowners' spouses who are not listed as borrowers on the mortgage. The spouses were often left off the loan to maximize proceeds (since reverse mortgages are underwritten on an actuarial basis, a couple can get a bigger loan if only the older spouse is listed). But when the borrowers died, their surviving spouses faced foreclosure.

He proposed as one option "reworking HECM actuarial assumptions to account for risk of eligible non-borrowing spouse." A new HECM spousal rights rule released recently does just that, reducing the proceeds a borrower can extract from the home to account for the risk that a younger surviving spouse will fall behind on property taxes or homeowners insurance, or stay in the home a long time.

Agbamu, now 57, entered the mortgage industry in 1998, when he moved to the Twin Cities from New York. He began specializing in reverse mortgages in 2001 when his boss asked him to research them. "I became hooked," he says. By 2002, he was advocating for these loans on a regular basis.

Since he stopped originating loans, Agbamu says he primarily has done business as a consultant with secondary market participants who want to know the value of reverse mortgage assets. His consulting business, ThinkReverse LLC, is based in Oakdale, Minn. He has supplemented his income with substitute, vocational and college level teaching as well as other support from his family.

Agbamu also provides solicited and unsolicited commentary to consumers, their attorneys, counselors, regulators, fellow writers, and the industry through e-mails and often on calls made between classes, with the sound of a schoolyard in the background.

"He comes from a place of compassion," says Joy Gordon, a community specialist and reverse mortgage counselor at Children's and Family Service of Minneapolis. "He wants to support the borrowers in their process and advocate for them. He understands the impact of changes on the consumer and the counselor. I haven't found anybody else like that in the industry."

Officials at the AARP Foundation, HUD and the National Reverse Mortgage Lenders Association would not comment for this story, citing pending litigation over the issues Agbamu has raised. (The AARP Foundation is part of the legal team that sued HUD in efforts to stop foreclosures on widowed spouses, and the NRMLA filed a friend-of-the-court brief in the case.)

Agbamu acknowledges that consumer advocacy-driven litigation and reform have in some ways hurt the reverse mortgage industry by constricting volumes and proceeds, and that some reforms have fallen short of helping all borrowers. However, he says, the changes were better than maintaining a status quo that otherwise would likely have hurt more borrowers and threatened the product's existence.

The new HECM spousal rights policy applies only to new originations and leaves existing spouses vulnerable to foreclosure if they are unnamed on the loan. Agbamu finds it preferable to having originators continue to make more loans where borrowers' spouses' rights to their homes are in question. It just means his advocacy work isn't done yet, he says.

Agbamu also issued early warnings about consumer protection issues that the Federal Housing Administration (the part of HUD that oversees the HECM program) later blamed for severe underperformance of certain reverse mortgages and as cause for reform.

In 2008, he voiced concerns about how fixed-rate reverse mortgages would pay a lump sum to borrowers that too quickly depleted their loan proceeds, leaving them without additional financial resources to tap for future needs. Such borrowers often ended up in technical default for nonpayment of property taxes or homeowners insurance, spurring the FHA to restrict the fixed rate product's use in April 2013.

Agbamu regrets that broader reform in response to consumer concerns has reduced access to reverse mortgages and the amount of proceeds available, as it hurts most the borrowers who need the additional financial resource most and whom HECMs were created to help.

"The product is essentially now a middle class financial planning tool. That was not the original intent," Agbamu says. "I understand the reasons for these restrictions, but it does not address the neediest cases."

However, he considers limited access to HECMs a lesser evil than allowing the further spread of HECM concerns that got so big they drove big players away and threatened the program's survival, he says.

"You may not get a lot of money when you have a younger non-borrowing spouse now, but you have a solid product," he says. "This is about helping elders and salving the image of a very important product. It's good for everyone. I got a reputation as a troublemaker, but I took the right position. What the industry sometimes doesn't see is that what is good for consumers is good for the industry."

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