The Reverse Review August 2008 by The Reverse Review

August 2008

THE

REVERSE â&#x20AC;&#x153;Forward Thinking in Reverseâ&#x20AC;?

review

Recognizing LOME Risks in Reverse Mortgage Origination Atare E. Agbamu PAGE

Who knew accumulated assets could actually be a bad thing? For seniors with reverse mortgages, this may prevent them from gaining access to government funding for healthcare. Read this article to understand the possible risks for your clients and how you can properly educate them in order to avoid this loss.

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CONTENTS

10 Jump In, The Water is Fine! Janis Arendsen

21 The Foundations of EďŹ&#x20AC;ective Sales Strategy

26 Are You Listening to Me? Sam Collins

Monte Rose

16 Recognizing 23 Selling the LOME Risks in Numbers John Lunde Reverse Mortgage Origination Atare E. Agbamu

ESSENTIALS 5 Note From the Editor

6 Ask the Underwriter

8 Industry Snapshot

29 Directory

30 The Last Word Top 5 Ways to Pay for Elder Care Services August 2008

THE

REVERSE

review

Co-Editors Aman Makkar & Erica English Copy Editor Harpreet Makkar Production Manager Jason Westbrook

Contributors Ralph Rosynek John Lunde Janis Arendsen Atare Agbamu Monte Rose Sam Collins Valerie VanBooven

Advertising Information

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Subscriptions and Editorial Content phone : 858-217-5332 email : information@reversereview.com website : www.reversereview.com

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REVERSEreview 10801 Thornmint Rd Suite 250 San Diego, CA 92127

© 2008 The Reverse Review, LLC. All rights reserved. The Reverse Review, LLC is a California limited liability company and is the publisher of The Reverse Review magazine. Reproductions or distribution of any materials obtained in the publication without written permission is expressly prohibited. The views, claims and opinions expressed in article and advertisement herein are not necessarily those of The Reverse Review, its employees, agents or directors. This publication and any references to products or services are provided “as is” without any expressed or implied warranty or term of any kind. While eﬀort is made to ensure accuracy in the content of the information presented herein, The Reverse Review, LLC is not responsible for any errors, misprints, or misinformation. Any legal information contained herein is not to be construed as legal advice and is provided for entertainment or educational purposes only. Postmaster : Please send address changes to The Reverse Review, 10801 Thornmint, Ste 250, San Diego, CA 92127

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Note From the Editor Have you ever been disappointed in someone’s attitude, maybe a waiter or waitress, an associate, friend or family member? In the past few months I feel like everywhere I’ve gone, I’ve received sub-standard customer service. (I use the term “customer service” loosely in reference to communication with clients, associates, business partners, friends, or family.) Given the feeling of disappointment, I started to research the philosophy and tactics behind successful communication and would like to share with you a little of what I’ve learned. The 7%-38%-55% Rule: A landmark study published by UCLA professor Albert Mehrabian, one of America’s leading communications experts, identified how we communicate and documented the validity of “actions speak louder than words”. The results were mind-boggling! When speaking to one another, our message is interpreted like this: -7 percent of what is heard are the words (verbal) -38 percent of what is heard is voice tone (vocal) -55 percent of what is heard is body language (visual) On a daily basis, everyone who works around me hears about the importance of customer service. We critique conversations our reps have with clients, paying close attention to their tone of voice, choice of words, and whether or not they have a smile on their face while speaking, because this passes through as well! There is always more than one way to express a message. It’s important to remember that it’s not what we say, rather how we say it. When I think of customer service, there’s one company that stands out in my mind. ZAPPOS! You may or may not have heard of Zappos, but they are an Internet shoe company. They have THE BEST customer service I’ve ever experienced and in my mind are the epitome of spectacular customer service. We’re all in business to make money, but also to provide a service to our clients. Even if we’re not on the front lines speaking with clients, how we speak with one another is reflected through our organization. We all must strive to provide the best customer service our clients have ever received or what I like to call “Zappos-like customer service”.

Aman Makkar Editor

August 2008

Ask the Underwriter Ralph Rosynek

Time to review the mailbag and inbox. We thank you for your support of the Ask the Underwriter column and look forward to your future questions.

If a Borrower currently has a reverse mortgage, but is not vested as a life estate, could they now change the vesting to a life estate? I do believe to re-convey a deed while having a reverse may not be permitted, but does that pertain to conveying into a life estate? Will this create a re-fi situation due to the fact that ownership of the property would actually be changing?

(In “Layman’s Terms”) vesting/property changes in many cases do not precipitate a refinance. If you consult the Mortgage and/or Deed of Trust as well as the servicing information provided by the Lender’s servicing agent, you will find in most cases that, as with many “forward” vesting and property issues, changes to the real estate collateral vesting may result in acceleration of the note without the prior permission of the Lender. The key operative words are “without the prior permission of the Lender”. The true answer to your question must be determined by the Lender servicer. In an effort to assist your Borrower(s) be aware that privacy issues will have an impact as to the amount of assistance you can provide. I would first suggest that the Borrower consult with an attorney to discuss the nature of any changes in vesting. To facilitate this conversation you may wish to direct the Borrower which documents from their closing package would be best to provide at the time of this meeting. Additionally, providing appropriate servicing center contact information will allow for the direct contact by the Borrower and or their representative. Caution is offered to Originators. Our innate ability to “want to help” is sometimes a very difficult behavior to control. Borrowers should never be guided to make important changes to their property ownership without the benefit of legal representation. You are an originator, not an attorney.

Q A

My Borrowers live in several homes around the country. Is it the home they spend most of their time in that determines their principal residence?

Principal residence means the dwelling where the Borrower maintains his or her permanent place of abode, and typically spends the majority of the calendar year. A person may have only one principal residence at any one time. In most cases, at least

one Borrower must occupy, establish, and use the property as Borrower’s principal residence after the execution of the Security Instrument. In most cases the Borrower shall continue to occupy the property as Borrower’s principal residence for the term of the Security Instrument. In most cases the Borrower’s failure to maintain subject property as principal residence will be considered a maturity event under the terms and conditions set forth in the Security Instrument and could result in a demand for repayment of the reverse mortgage. There is no limit on the number of other financed properties a Borrower may own as long as the subject property is the Borrower’s principal residence. In the case where an eligible property is a one to four family dwelling units, a multi dwelling unit, one unit must be the Borrower’s principal residence. Occupancy verification is one of the major issues Underwriter’s are concerned with daily. Do not be surprised in some cases if you are requested to provide additional back-up documentation to verify occupancy, if the “major” Borrower identification documentation does not clearly provide evidence of the Borrower primary residence address. Additionally, do not confuse HECM primary residence guidelines with other proprietary reverse mortgage products currently oﬀered in the market. Non-FHA insured programs may provide variations of primary residence definition including the permissibility of second home financing.

Q A

I just received a completed application package from one of my Borrowers via the mail. Upon further inspection I noted that the documents are all signed, but some of the dates are diﬀerent. What should I do?

In considering senior behavior, more than likely the senior read and/or reviewed the documents at diﬀerent times. Also likely, would be the possibility that the forms which were confusing for your Borrower were reviewed or shown to a trusted advisor prior to signing. That being said, the best fix for this problem is to inquire with the Borrower as to the reason for the various dates. Commit that explanation to an original written “Processors Certification” to be included in the file at the time of submission to underwriting.

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Q A

My recent underwriting submission for my Borrower was pended due to lack of a medical doctor letter to attest competency. I already provided the POA document for review. Why is this needed?

My suspicion is that your certificate of counseling lacked evidence of the Borrower being counseled and/or the application was completed by the Attorney-In-Fact. The doctor’s letter is required to verify in fact that both the Borrower was competent at the time the POA document was executed and/or the Borrower is not competent at the present time and unable to undertake the actions and responsibilities of the reverse mortgage transaction.

Q A

Typically this would be one of the following:

• • • • •

Social Security Authorization Form State issued identification card Valid Driver’s License Valid Passport Certified Copy of the Birth Certificate

Other reasonable reliable sources of age verification may be accepted upon the approval of the Underwriter. If the Borrower is a permanent resident alien, the file must contain evidence of lawful permanent residency.

One of my Borrowers is a non-permanent resident alien. Am I able to continue the application process?

A non-permanent resident alien is eligible for financing under the same terms and conditions oﬀered to U.S. citizens and permanent resident aliens. Borrowers with diplomatic immunity are not eligible. Permanent/ non-permanent resident aliens with an Alien Registration Card (“Green Card”) who are at least 62 years of age at the time of closing are eligible for a HECM Reverse Mortgage Loan. In the case of multiple Borrowers, all Borrowers must be at least 62 years of age at the time of closing. Verification that the Borrower meets the age requirement by obtaining a reliable source of age verification must be in file.

August 2008

A note about our subject matter expert: Mr. Rosynek has been involved in mortgage lending for over 30 years with the last 5+ years exclusively providing reverse mortgage lending solutions. To contact Mr. Rosynek or to learn more about 1st Reverse Financial Services, please visit www.1streverse.com or call 877-574-1000.

Reverse Mortgage Industry Snapshot As Of June/July 2008

Statistics Provided by Reverse Market Insight

Top 10 Rankings by Region Endorsements Rank 1

Chg 1

-1

Region Southeast/Caribbean

Active Lenders

2008YTD 14,769

YTDChg% 19.88%

2007TOT 24,014

2008 628

Pacific/Hawaii

11,830

-11.88%

25,612

587

Mid-Atlantic

7,227

14.21%

11,956

286

Midwest

5,937

-0.44%

11,434

372

Region Share

Chg% 122.7%

2008YTD 24.933%

Chg% 14.2%

56.53%

19.971%

-16.05%

101.41%

12.201%

8.8%

59.66%

10.023%

-5.15%

Southwest

4,975

27.79%

8,073

229

89.26%

8.399%

21.74%

-1

New York/New Jersey

4,310

-6.83%

8,322

234

95.0%

7.276%

-11.24%

Northwest/Alaska

3,421

18.54%

5,790

219

90.43%

5.775%

12.92%

-2

New England

3,223

-18.63%

6,963

237

53.9%

5.441%

-22.48%

Rocky Mountain

2,049

26.09%

3,296

141

62.07%

3.459%

20.12%

Great Plains

1,494

6.49%

2,827

128

96.92%

2.522%

1.44%

Industry Totals

59,235

4.97%

108,287

2,172

85.96%

10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates. Also includes active lenders and growth

Lender Distribution by YTD Growth Rate Growth Rate -100% -99% to -1% 0 to 100% 101% to 200% 201% to 300% 301% to 400% over 400% New Lenders

Lenders 227 450 293 83 29 19 67 1,231

YTD MIC 26,732 12,569 4,276 738 538 5,625 8,757

Last YTD 1,793 42,773 9,260 1,808 209 116 471

Lender distribution graph and table, showing number of lenders growing at various growth rates YTD vs. prior YTD, including volume attributable to each group of lenders. Client Notices 1) 2) 3)

Help improve data quality in the Reverse Mortgage industry. If you believe your company’s numbers on this report are inaccurate, please email us (support@ rminsight.net) and we will review your feedback promptly. Please include your name, company and contact information along with a thorough description of the suspected inaccuracy. Thanks! If you received this report as a trial or sample and would like to purchase this report or future reports for your company, please visit: www.rminsight.net/MICreports. php If you’ve been looking for a source for Reverse Mortgage intelligence beyond MIC endorsement numbers, we’ve got just what you need. Find out more at www. rminsight.net/rmarket.php

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24 Month Penetration and Unit Volume 12000

0.016

0.014

10000 Units

0.01

0.008

Penetration

0.012

0.006 8000 0.004

0.002

6000

0 2006-7

2006-11

2007-3

2007-7

MIC Units

2007-11

2008-3

Penetration %

2 year trend graph of monthly HECM unit volume and industry penetration against 62+ homeowner households nationally. Appendix 1) All statistics based on retail originations from HUDâ&#x20AC;&#x2122;s Monthly HECM MIC reports 2) Loans are in unit volume, based on HUD reported mortgage insurance certificate issuance 3) Lenders are aggregated using HUDâ&#x20AC;&#x2122;s lender identification numbers and unique lender names, along with feedback from reporting lenders HUD Regions and Corresponding States/Territories Region 1 - New England Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont

Region 3 - Mid-Atlantic Delaware District of Columbia Maryland Pennsylvania Virginia West Virginia

Region 5 - Midwest Illinois Indiana Michigan Minnesota Ohio Wisconsin

Region 7 - Great Plains Iowa Kansas Missouri Nebraska

Region 8 - Rocky Mountain Colorado Region 2 - New York/New Jersey Region 4 - Southeast/Caribbean Region 6 - Southwest Montana New York Alabama Arkansas North Dakota Florida Louisiana South Dakota New Jersey New Mexico Utah Georgia Oklahoma Wyoming Kentucky Texas Mississippi North Carolina Puerto Rico South Carolina Tennessee U.S. Virgin Islands August 2008

Region 9 - Pacific/Hawaii Arizona California Federated States of Micronesia Hawaii Nevada Region 10 - Northwest/Alaska Alaska Idaho Oregon Washington

Jump In, The Water is Fine! Janis Arendsen

Have you been sticking your nose up at the manufactured home borrower? Like it or not, with the increasing popularity of the Reverse Mortgage loan product for the mature borrower, loan oﬃcers and processors are dealing with more and more manufactured homes in their portfolios. It makes sense when one realizes that seniors have chosen to congregate in the manufactured home park setting as a retirement oasis, oﬀering the amenities of security, recreation and a sense of community. The concentration of an active senior population in a close-knit living atmosphere naturally lends itself well to word-of-mouth advertising for the Reverse Mortgage industry. And now with the recent passage of H.R. 3221 , the housing stimulus bill signed into law on by President Bush, you can count on the numbers of manufactured home loans increasing. Why? Thousands and thousands of manufactured homeowners have been disenfranchised from the FHAinsured loan process by a fluke in the statute and manner in which their community was legally constructed. If the description on land and title documents state a manufactured home is in a condominium manufactured home community, these borrowers have been ostracized from the Reverse Mortgage opportunity. By organizing the park development under the condominium aegis, regulators interpreted that a resident’s ownership was confined to airspace only when residents protested that they clearly owned their individual deeded plots. The narrow legal interpretation of a manufactured home situated in communities classified as condos ironically excluded some of the highest quality senior developments. These parks often boast of vibrant recreational facilities, in some cases golf courses and a strong management or homeowner’s association with an overseeing architectural committee. Because of the commanding oversight presence, the price of admission to such a development in turn creates a strong pride of ownership; expectation of upkeep and a more robust sales market keeps appraisal values localized and current.

Fortunately, in addition to all the other more-loudly trumpeted issues in the bill, less well known is the fact that the passage of H.R. 3221 has now eliminated the manufactured home condo discrimination. The inclusion of manufactured housing as a component of the bill was largely due to the grassroots eﬀorts of manufactured home residents themselves who actively cajoled their legislators with letter-writing campaigns and petitions, pleas to AARP, or they even joined lobbying groups to show their support, virtually demanding that they be able to receive the benefits of a Reverse Mortgage. In many cases, these seniors are already Reverse Mortgage devotees since they had friends in neighboring manufactured home communities with acceptable designations for FHA insurance: Planned Unit Developments (PUDS) and Subdivisions. Knowing that this is a unique case where demand for the product precedes the opportunity for access, I don’t think I exaggerate when I say “Katy, bar the doors!” The point is if you haven’t dipped your feet in the manufactured home Reverse Mortgage pool of loans, you should think about sticking your toes in sooner rather than later. The good news is you have some time to school yourself on the unique properties of manufactured home loans and to tighten the logistics within your processing department. According to Daniel Mooney

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(Underwriter HECM Coordinator Processing & Underwriting Division Santa Ana Homeownership Center, Federal Housing Administration) “while the new statute allows for FHA to promulgate regulatory changes and policy revisions that will enable us to insure loans secured by manufactured homes located in condominiums, said new policies have not been enacted/promulgated. I would anticipate a period of several months (as in six to nine) before FHA is actually able to institute policies and procedures relevant to the issue at hand”. Knowing you have a window of time before all the gears are running, you can acclimate yourself to the water conditions. In my book, this is the best time to get your feet wet and set up some in house policies. One of the reasons many brokers and processors bemoan the manufactured home loan is that it comes with its own set of obstacles. Lack of proper information and a disorganized processing strategy often creates dissention between the borrower and the lender and the lender comes out the loser, looking unprofessional and unknowledgeable. If you follow a few ground rules and recognize that the community camaraderie can provide the service –oriented loan oﬃcer with a wealth of referral leads, it may be worth the extra time to troubleshoot some of the idiosyncrasies of the manufactured home.

“

Successful Companies Rely On ReverseVision

The point is if you haven’t dipped your feet in the manufactured home Reverse Mortgage pool of loans, you should think about sticking your toes in sooner rather than later.

”

When you go to research a piece of real estate, you can usually access it by address, assessor’s parcel number, legal description or all of the above. However, even if a manufactured home sits on a piece of realty and shares the features of the real property, it is still distinguished by its HUD label (an aﬃxed HUD Seal (tag/label) located on the outside of the home. Many people ask, if the home is on real property and is being assessed as real property, then why would a HUD tag be of continuing importance? Even when a manufactured home is converted to real property, it doesn’t remove the fact that the home is still a manufactured home. The provenance of any HUD home and its factory design and engineering requirements are traceable through the individual HUD label. For appraisal and lending purposes, code should follow code so appraisers and engineers certifying a home for a manufactured home loan need to specifically identify the HUD numbers in their reports. Additionally, building departments utilize the HUD label as the format for the permit process because it allows the home to preempt the local building codes. If for any reason the labels are missing, appraisers will often reject the property and refuse to proceed until documentation is

August 2008

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provided, building departments will refuse to issue certain and in some states a manufactured home may not be re-sold if missing a label and an engineer should not proceed with a HUD foundation without being able to prove that the home itself is in fact a HUD home. Certain criteria are absolutes to follow for an FHA-insured loan on a manufactured home loan. These are: 1. The manufactured must be a HUD home, which means it must be manufactured after June 15, 1976. If there are metal plates at the rear of the home that begin with a three Alpha letters like CAL, ARZ, ORE, that’s usually a good sign. If the HUD label is missing, usually a label verification letter from the Institute for Building Technology and Safety (IBTS) www.ibts.com Which will give the provenance of the home will suffice. 2. The manufactured home must be classified and taxed as real estate. A long-term lease may also be acceptable in certain instances. States vary on how the real estate classification is accomplished so this is another important aspect to understand. 3. The axles and tongues must be removed from the chassis. 4. The manufactured home must have an adequate perimeter enclosure with appropriate ventilation. 5. Must have a floor area of not less than 400 square feet 6. Built and remains on a permanent chassis. 7. The finished grade elevation beneath the manufactured home shall be at or above the 100-year return frequency flood elevation. 8. The home must sit on a permanent foundation and must have a professional engineer certify that the foundation meets the PERMANENT FOUNDATION GUIDE TO MANUFACTURED HOMES (PFGMH) HUD-7584, dated September 1996. If the loan officer or processor has never previously expedited a manufactured home transaction, this last requirement can upset the whole apple cart. By not anticipating this, the 11th hour underwriting condition will give a processor fits trying to find a qualified engineer that understands manufactured housing. Potentially there is an even worse scenario. Occasionally the engineer makes the determination that the foundation will not meet the HUD guidelines and a repair or retrofit will be required. If the loan officer or borrower is unprepared for this possibility, angst and ill will often occur between he/she and the borrower. “Why didn’t anyone tell me? They’re supposed to be the experts!” is a recurring outcry. For the manufactured home processing newbie, don’t be fooled by the appraisal report, which nine times out of ten stipulates that the home is on a permanent foundation. Unfortunately, the appraiser often makes a determination about

August 2008

“permanence” strictly on the basis that the tires and axles have been removed or some other vague set of standards, not on the basis of the foundation attachment. The reason for the engineering certification requirement is to establish a national standard of uniformity amidst inconsistent state installation standards. While manufactured homes enjoy the benefit of the HUD standardized preemptive structural, plumbing, and electrical standards that need to be met before leaving the factory, installation standards vary from county to county, state to state. So the home can be designed for stringent seismic, wind and roof load expectations, but the home may be set up just like the old trailers of yester year, depending on area designation. Foundation systems are typically subject for review by the local code authorities and are often tailored to the site, soil, wind, flood, seismic and snow conditions of the individual county or state. Additionally, manufactured homes are unique in that they are the only type of residential dwelling that can be classified as either person (chattel) or real property. In some states, the type of foundation supporting the manufactured home determines the distinction between personal and real property. Since the individual jurisdictional requirements vary significantly, the Engineer Certification Letter helps to provide an oversight standard. This is generally an underwriting requirement for all FHA insured loans, which also include Reverse Mortgages.

for the retrofit contractor that may satisfy the engineer’s requirements. However, even though proprietary systems almost always carry engineering approvals, approvals vary state by state and some building departments may not approve their design concepts. Therefore finding the right combination of an engineer and contracting team that understands the FHA lending process, the building permit process and the available proprietary retrofit systems AND that can work within the timeline of your loan lock timeline can be a bit of a balancing act. There’s no time like the present to take a plunge! The manufactured housing industry may just be the next great niche market. About Janis Arendsen: Janis Arendsen is owner of On The Level, a contracting company specializing in the inspection, servicing and retrofitting of manufactured housing foundations and works in conjunction with Pacific Consulting Engineers that provides engineer’s certifications on foundations. Refer to www.onthelevelcontractors.com for more information.

If an existing home is already on a foundation, an engineer can provide a certification attesting to the fact that the home meets the guidelines. If it does not meet the HUD guidelines, there are a variety of proprietary or approved engineered foundation systems that can be retrofitted in combination with the existing structural components. As in any industry, one size does not fit all in the engineering landscape and engineers that specialize in the manufactured home industry and the HUD inspection specifications are a rare breed. Because there are a vast array of proprietary products that have been introduced into the national

“

There’s no time like the present to take a plunge! The manufactured housing industry may just be the next great niche market.

”

marketplace, an engineer’s knowledge about these patented systems is also an additional benefit since these have all been pre-engineered and stamped delineating all of the system specifications.

This also means if the foundation does not meet the FHA-insured criteria for a permanent foundation, the engineer does not need to re-invent the wheel with a repair recommendation---there are a plethora of products available

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ReverseVision ReverseVision Suite is the leading reverse mortgage origination solution for mid to large sized organizations. It covers all aspects of the origination process from prospect to closing and shipping.

Graphs

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Proprietary loans

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Com p swit anies chin g Rev erse to Vi expe rien sion c imm edia e an te incr ea prod se in th e uctiv ity. ir

Over the past 12 months more than 100 companies with over 2000 users switched to ReverseVision.

www.reversevision.com z (919) 834 0070 z info@reversevision.com ReverseVision Inc. z 3310 Pollock Place z Raleigh, NC 27607-7006

Recognizing LOME risks in reverse mortgage origination Atare E. Agbamu

Brenda McBride of Lake Hekmo, Minnesota got what she wanted: a government-insured reverse mortgage with a fixed interest rate at 6.125 percent. At closing, the 72-year-old grandmother of six and mother of three was ecstatic. She hugged her beaming loan officer, Sherry Mojah, three times. The experience reaffirmed Mojah’s decision to quit her CPA firm to serve seniors via reverse mortgages five years ago. So happy was McBride with her reverse-mortgage cash, her loan officer, the process, and her lender, Tru-Reverse Financial, Inc. (TRF), that she took the unusual step of writing a fan letter to the Big Man in Washington, thanking the government for authorizing fixed-rate HECMs and praising the outstanding ethics, customer service, and professionalism of the folks at TRF. The full text of her letter is posted on TRF’s Web site for maximum marketing impact. The hard copy is included in the company’s marketing kit.

August 2008

The scrupulous former CPA, Mojah, was upfront with all disclosures. Nothing was held back. Nothing was glossed over. And nothing was misrepresented. McBride knew that the fixed-rate option is available to customers who want a lump-sum payout. Her oldest daughter, Carolyn Kumbata, a lawyer and forensic accountant, was a part of the process from start to finish. Even she was impressed by Mojah’s thoroughness. Because she wanted lots of tax-free cash to fix her kitchen and bathrooms and take her winsome grandchildren on a Caribbean cruise, McBride took her net principal limit of $100,000.

“

Reverse mortgage lenders like fully-funded lump-sums because Wall Street investors pay more for them. Investors love them because they don’t carry future funding obligations and costs such as the term, tenure, modified term, and modified tenure options. The McBride deal was a win-win for all – borrower, lender, and investor, or so it seemed.

to her and to her family’s finances. The children wisely concluded that their mother would have to go on Medicaid. They applied for Medicaid, but her application was denied. The reasons: countable assets of $24, 500 (the CD and cash in her savings/checking account) and “transfer of assets” issues (gifting $5,000 each to her grandchildren). The children were stunned beyond words. They were furious. The other two, Glenn McBride and Susan Poko, blamed the reverse mortgage lender and her loan oﬃcer for not telling their mother about loss of Medicaid eligibility (LOME) risks inherent in reverse mortgage transactions. They threatened to sue the reverse mortgage lender for incomplete disclosure.

This is the essence of LOME risks: Unsuspecting reversemortgage borrowers could pile up cash in an account and deny themselves significant health benefits.

After the repairs and the Caribbean vacation, McBride gifted $5,000 each to her grandchildren toward their college education. She deposited another $5,000 in her savings/ checking account. And she prudently locked the remaining $20,000 in a bank CD at 6.75 percent for three years.

Six months into her reverse mortgage loan and three months following the Caribbean boat trip, her grandchildren and her children began noticing the symptoms. At first they meant nothing, just the normal signs of aging. Normally a spirited woman with a ready smile, Brenda McBride became listless and withdrawn. She forgot things, places, and names. She would stare into space for hours, talking with invisible companions. She repeatedly mixed up her children’s and grandchildren’s names. Then, the test results came in. They confirmed her children’s worst fears: McBride had Alzheimer’s and some dementia. Her children held a family meeting to decide how to manage their mother’s illness. It would be a long-drawn degenerative situation. It would mean home care attendants, assisted living, or nursing home. It would come down to tests, more tests, lots of medication, doctors, nurses, and medical bills. The costs could be prohibitive and destructive

LOME Risks

But their oldest sibling, Carolyn Kumbata, who was part of the reverse mortgage process, told them to relax. She knew the Medicaid denial for their mother stemmed not from incomplete disclosure, incompetence, or fraud but from the limited understanding of the FHAapproved HECM counselors and the reverse mortgage professionals at Tru-Reverse Financial. And she told her siblings so.

”

The Brenda McBride vignette illustrates seven truths that every reverse mortgage origination professional should be mindful of: • Medicaid Eligibility is a very valuable benefit for most seniors (in the event of serious long-term illness, it could be worth millions of dollars in medical benefits); • Loss of Medicaid Eligibility (LOME) for public healthcare benefits is a risk for seniors taking reverse mortgages without broad consultation involving elder-law and financial-planning advice; • The types of payout option loan oﬃcers advise borrowers to take can increase LOME risks; • Reverse mortgage origination professionals need to understand how reverse mortgages and public healthcare benefits interact; • Failure to grasp and to plan for LOME risks could engulf reverse mortgage lenders in lender liability litigation; • Medicaid Eligibility and Medicaid estate recovery issues should be part of any curriculum for training reverse mortgage origination professionals; • The value of public health benefits is so important to most seniors’ well-being that reverse mortgage originators would be required to screen for LOME risks someday.

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A definition is in order here. So what are LOME risks in reverse mortgage origination? LOME risks are the risk of reverse-mortgage borrowers losing Medicaid Eligibility by accumulating assets over regulatory limits, and the risk of reverse-mortgage lenders attracting widespread customer displeasure and potential lawsuits. This definition begs a critical question: What is wrong with reverse mortgage borrowers accumulating assets? Answer: They may need Medicaid down the road and accumulated assets could make them ineligible for its valuable medical benefits. Medicaid 101 Medicaid is a federal-state healthcare program for the poor. To qualify an applicant must show monetary evidence of poverty. Although the program varies from state to state, federal “means-test” guidelines can help us understand it. For 2007, an individual with assets (cash in the bank and other liquid resources) of $2,000 (or $3,000 for a couple) a month is eligible. Above those numbers, the individual (or couple) is disqualified. Because of the jumble of conflicting federal and state rules, what is income, asset, or resource is anybody’s guess. Generally, a person’s home is not counted as a resource. For our purpose, reverse-mortgage cash is considered loan proceed; therefore, it is a non-countable asset. However, if it accumulates in a bank account above the $2,000/$3,000 guidelines, it becomes a countable asset, making the borrower ineligible for Medicaid benefits. This is the essence of LOME risks: Unsuspecting reversemortgage borrowers could pile up cash in an account and deny themselves significant health benefits. They would turn around and hold the clueless reverse-mortgage lender liable for ill-advising them. The life-planning ramifications of reverse mortgage funds are such that originators’ existing competencies are inadequate to the task of shielding seniors and themselves from LOME risks. Of course, in defense, originators may argue that they are not in the business of dispensing government-insured healthcare advice. It is like a doctor saying he is not a drug maker; therefore, he is not responsible for the negative side eﬀects of the medication he prescribes. If the doctor discloses and explains the drug’s side eﬀects to the patient before the patient starts taking the medicine, the doctor could be less exposed legally. Not disclosing and not explaining could land the doctor in trouble because it is his job to know the benefits and the dangers of the medicines he prescribes to patients. Similarly, the types of reverse mortgage payout options we recommend to our senior

borrowers could have consequences, positive or negative as with Brenda McBride. Underwriting any loan is about managing risks. Reverse mortgages are no exception. LOME risks for seniors and reverse mortgage lenders are real. They must first be understood; then managed. Mitigating LOME Risks Now that we have some understanding of LOME risks in reverse mortgage origination, let us look at some ways to limit or eliminate it. The following ideas could help: • • •

•

• • • • •

• • •

Become aware of LOME risks through education*; Keep the goal of enhancing seniors’ lives in mind at all times; it will help you think outside the box and recognize hazards like LOME risks; Know that all reverse mortgage payout options except the line of credit option carry significant LOME risks because they could lead to risky accumulation of countable assets; Build multi-disciplinary lending teams made up of reverse mortgage specialists, elder-law attorneys, and financial planners; alternatively, cultivate elder-law attorneys and financial planners within your markets that you can consult for the benefit of your borrowers; Know Medicaid’s Eligibility and Estate Recovery rules; Know the “transfer of assets” implications of gifting reverse mortgage cash; Know your state-specific Medicaid rules as well as the federal rules; Cultivate knowledgeable contacts within your state’s Medicaid bureaucracy, and pick their brains often on changes to the rules; Develop Reverse Mortgages and Medicaid 101 Seminars to educate seniors in your market; healthcare is a critical value; they will pay attention to what you have to say; better still, coordinate it with an oﬃcial of your city or state Medicaid oﬃce; Bone up on the Deficit Reduction Act of 2005**; Because a senior’s long-term healthcare needs are unpredictable, they should know the adverse consequences of accumulating resources; Although it is outside the scope of this article, knowing something about SSI (Supplemental Security Income) program rules could enhance your understanding of Medicaid.

Gosselin’s caution One of the nation’s leading resources in understanding and mitigating LOME risks is Massachusetts’s elder-law attorney and reverse mortgage expert, John T. Gosselin.

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During a conversation for my column last year, he shared this caution, and I believe reverse-mortgage originators ignore it at their peril: “To lose the benefit for people who are receiving the benefit [and for those who will receive it] would probably be catastrophic. They could put themselves in situations where their medical debt could consume the value of their house. If they have no other means of paying for their medical debt, they could be forced into bankruptcy for their medical debt.” Most of us were attracted to reverse mortgages because they oﬀer the twin blessings of doing good while doing well in an emerging and growing segment of the mortgagelending industry. As our industry evolves into a pillar of retirement finance for our seniors, we must be on guard to ensure that we do no harm, unintentionally or otherwise. We must avoid Brenda McBride situations. About Atare Agbamu: Atare Agbamu is the author of Think Reverse! (The Mortgage Press, coming this fall) and more than 100 articles on reverse mortgages. A reverse-mortgage specialist in Minnesota and an adviser to institutions across the country, he writes the Forward on Reverse column in The

Mortgage Press, since 2002. Atare can be reached by email at atare@thinkreverse.com Resources *A two-part article wrote for NRMLA’s Reverse Mortgage Advisor in 2007 (“Understanding the Linkage Between Reverse Mortgages, Medicaid, and SSI”) and a four-part piece for my column, Forward on Reverse, in The Mortgage Press (“Traps for the Wary: Reverse Mortgages and Healthcare Benefits …,” Sept.-Dec., 2007) are good places to begin your LOME education. **My 2005 conversation (“DRA 2005: Medicaid Rule Change and Reverse Mortgages”) with Stephen Moses, one of the nation’s leading authorities on long-term care reform and a huge fan of reverse mortgages, in Appendix 1 of my book Think Reverse! (The Mortgage Press, 2008) is a good place to start. ***NRMLA’s Guide to Medicaid and National Aging Services Network is a valuable resource that members can download for $20 at www.nrmlaonline.org Copyright © 2008, Atare E. Agbamu, CRMS All Rights Reserved.

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The Foundations of Effective Sales Strategy Monte Rose Sales productivity rests on the ability to balance two key dimensions: (a) personal strategic planning, and (b) time and energy management. The first area is all about the understanding (awareness) of one’s key strengths and leveraging these on the proper market segment. Managing consistent execution of these critical strategic steps is the second part of the equation. The effective marriage of insight and action maximizes the chance for success. You can’t have one without the other. Most people typically falter not because they don’t know what to do - it’s because they (or their managers) do not have a systematic way to consistently monitor the cause and effect relationship between daily behavior, sales activities and measurable results. The absence of a “system” means inevitably: (a) the dynamics of “motivation” is left to chance and, more importantly, (b) a learning strategy and process is not in place to ensure replicability of successful behaviors. In essence, low productivity can be traced not only to the deficiencies in strategy, or energy, i.e. execution, but also because there is no systematic linkage between these two critical dimensions. A comprehensive system prevents leaks of energy, ideas, motivation -- or all of the above. Brian Tracy talks about the inherent difficulties of the selling profession: “The cardinal rule of selling is that everything counts... Everything that affects your thinking throughout the day has an impact on your personality and performance. Whether you read an inspirational book in the morning or the newspaper, whether you listen to the radio in your car or to a learning audiocassette, whether you eat a salad at lunch or a hamburger, everything counts. Everything adds up and either helps you or hurts you.”

How do you create a system so everything adds up positively? Even small, ordinary actions, when done consistently over time, can yield extraordinary results. It is imperative to develop a system to transform marketing and sales ideas to sustainable, consistent and measurable activity. The latter is critical: too much of a good thing can be expensive, counterproductive or both. For example, failure to carefully quantify results to time and resources dedicated to promotional activity will be diﬃcult to correct, especially in a tough market environment. The productivity triangle, Skill Building, Personal Branding and Outreach, is the key to establishing eﬀective strategy. There are many activities in each silo/area. The key is to know your own strengths well, i.e. your specific learning and motivational styles, so that you can apply them to those activities that “fit” your talent profile and make a positive impact on your business. For example, if you have the “Learner” or “Input” theme (obtained from the Gallup StrengthsFinder Profile Assessment) as one of your Top Five strengths, you could easily immerse yourself in researching competitive information, becoming an expert in Senior health issues, Gerontology, or Creative Aging trends. Another example of a “Skill” strategy is to be proficient in your company or lender’s system, which then allows you to monitor the progress of your application in the pipeline. Mastery of basic loan issues (e.g., appraisals, title reports, product features etc.) are all part of the skill set component of the productivity triangle. Familiarity with basic tools such as free property valuation website (e.g. zillow.com and it’s competitors), or learning how to apply Web 2.0 tactics for creating a community base are some concrete examples of strategic leverage.

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Brand Management Brand-building activities need to flow organically from the “market persona” you should be cultivating. This, in turn, depends on an awareness of your key markets (your “brand community”) and the story/role you can effectively own. You need to develop a variety of “elevator speeches” (aka your audio logo) that are appropriate for your different market sub-segments and prospecting situations. The idea is not to compete with other producers but to own your niche and be known for your unique strengths and capabilities. Again, the most effective brand-building strategies must flow from an awareness of your talent profile. This ensures energy conservation and sustainability -- because you consistently navigate and connect on the basis of your authentic sweet spot. The more energy and motivation you have, the more likely you will be able to engage in effective branding actions over time. Tapping the Market Extending one’s reach is probably the most critical component in today’s market condition. Why? Because of the “noise level” created by the current economic environment, one can argue that most potential customers are not as motivated in exploring Reverse solutions for their financial needs. Therefore, prospecting as a foundational activity can be even more difficult.

This is how the “productivity triangle” serves as the foundation of a personal sales strategy. All three are inter-related, and the “mix” will depend on your specific experience/immersion in the reverse mortgage field, market conditions, and your business approach. In helping producers, one has to generate a discrete list of implementable actions from each silo, and coach around how to utilize each person’s unique talents and learning style to maximize traction and sustainability. The latter is key: consistent, thoughtful action is always better that inconsistent, frantic bursts of activity. Under diﬃcult market conditions, this specific ability for self-regulation, focused discipline, and endurance can be a prime diﬀerentiator between success and failure. About Monte Rose: Monte Rose has helped hundreds of seniors obtain a reverse mortgage during the past 17 years. He is an accomplished speaker and widely quoted industry expert, appearing in financial publications and nationally syndicated media. He was head of national retail sales for Financial Freedom Senior Funding Corporation. Monte is a Certified Senior Advisor and a Certified Strengths Coach with Gallup University. For more information, call 800-516-0545 or email info@monterose.biz.

Prospecting is 80% motivation and 20% skill. Closing the sale is 80% skill and 20% motivation. There are many “Kitchen Table masters” whose business is limited by prospecting reluctance or ineffective prospecting approaches. They simply don’t get to enough prospects. More often than not, however, the limitation is the level of motivation and energy that is focused on prospecting, rather than the lack of technique that becomes a hindrance to sales productivity. The first step in fixing this problem is understanding what kind of call-reluctance profile the salesperson has. The awareness of one’s call reluctance issues enables the producer to apply effective “countermeasures” and thus release the motivational energy required for sustained prospecting. Once the prospecting “brake” is released, certain tactical steps can then be more productively implemented. As an example, systematically creating a list of Senior communities, Faith-based communities, Home Health Care companies, Final Expense Professionals, Home Medical Supply companies, senior publications, debt counselors, and other aging-related professionals - and sticking to a schedule of contacting and consistent follow-up - is one tactic for effective business development. The two other parts of your “portfolio”, Skills and Brand, affect your outreach and prospecting activities. Skill builds the “content” of your value proposition, while effective personal brand management builds the “perception” of your value in your market.

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Selling the Numbers

John Lunde

After a one month break, this article continues a multi-part series about the most important measures of reverse mortgage success. Each article will walk through a specific area of the business, focusing on the key risks and opportunities to growing your reverse mortgage business. For years, the most important tool in the reverse mortgage originator’s tool kit has been the product comparison worksheet of your point of sale software. Historically, this has been provided by wholesale lenders as a complimentary benefit of the broker/correspondent relationship, but we’ve recently seen a number of new vendors oﬀering these tools as part of lead management or customer relationship management (CRM) software at a fee to the originator. This new activity raises a few interesting questions. First, why should you consider paying for software that you currently receive for free from your lender? Second, what should you look for in evaluating these tools? Another question you might be asking by this point is why I’m writing about software when I’m in the market intelligence and numbers business?

Independent Future As the reverse mortgage business has expanded over the past few years, the number of companies originating loans has grown suﬃciently to attract vendors providing specialized tools for the industry. As an originator, it’s important to consider what this means for you and the success of your business. For any company originating reverse mortgages today, you have a variety of lender calculators available to you that price a lender’s products and usually provide associated consumer disclosures as well. The new breed of vendor

calculators include this functionality, but also include more sophisticated lead tracking and follow-up tools to help automate simple sales activities and guide sales staff toward more productive activities. Aside from the increased functionality (which we’ll talk about in a second), the first and most obvious benefit to using a vendor calculator is that you achieve flexibility to switch lenders or use multiple lenders without changing the calculator tool your sales force is comfortable using, or worse, having to use multiple calculator tools. This benefit cannot be over-stated as we see lenders dramatically repricing product LTVs and moving to a more fluid pricing environment where originators may receive very different economics on a loan from competing lenders in the space of weeks. Originators can’t afford to limit their consumer appeal by locking themselves into a single lender’s (latest) LTV curves, nor compromise their own margins by being unable to capture the best price for their loans.

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Identify the key steps in your sales process and make sure the software you’re considering captures critical information in a way that educates the sales rep and manager.

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The second benefit is an extension of the first and is generally not widely available yet, although many signs point to it developing in the near future. While today’s vendor tools typically export a loan submission file to a lender’s LOS, tomorrow’s tools will offer side-by-side comparisons of multiple lender offerings within a single platform, then track those loans through to funding and sale. At this point, brokers and correspondents will be able to offer their

August 2008

customers multiple loan options based on current LTV and economic variables, ensuring continuity for the sales staﬀ, benefit to the customer and value for the originator.

Evolving Capabilities Once you’ve set your course as an independent originator, a big decision still remains in choosing which vendor software to use. This article isn’t solely about vendor software selection (which would take a much longer space to adequately cover) but we can hit the high points relatively quickly. There are at least two major areas for functional improvements in reverse mortgage CRM systems: automating repetitive processes and encouraging or reminding users of desired activities. Automation is relatively straight-forward. For example, if you decide as a company that it will help your conversion rates to send a birthday card to all active leads each year, this is easily automated through your CRM if you’ve captured birth date in your lead information and either integrated a mail fulfillment vendor or assigned someone in your company to run a quick extract periodically to mail or send to a vendor. There are plenty of similar examples that will make everyone’s life easier by letting computers do the repetition (it’s what they’re best at!) and your people do the thinking. The subject of reminders is a bit more involved since it

necessarily requires your sales reps to perform some action. Typically these steps involve judgment that only a human can provide, but just as often in the sales process you have simply decided that the human touch is more suitable to sales success. Taking the birthday card example above, you might have decided that it was more likely to lead to a sale if your rep called the active leads on their birthdays. Simply cue up a reminder, let them check a box after they call and you’re all set. The examples above are basic, but hopefully illustrative of the power of expanded functionality in CRM software as opposed to more elementary product pricing calculators historically used in the reverse world.

Raw Material For Management So why am I writing about software? The basic reason is that the data you create and store in software tools like your product calculator and more importantly, your CRM tool, forms the foundation for management decision-making information. The raw material your data represents can tell you which of your sales reps are struggling, and even give you clues as to why. The data will never be the whole story simply because it would be mind-numbing to track everything that actually happens in the sales process, but it’s a very important piece of the story - particularly so when you’ve predefined the important sales activities you expect from your reps. So how do you make best use of your systems for management?

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First, identify the key steps in your sales process and make sure the software youâ&#x20AC;&#x2122;re considering captures critical information in a way that educates the sales rep and manager. A good example is tracking a particular sales repâ&#x20AC;&#x2122;s lead to application conversion ratio: a great statistic to capture but you might think about whether the system youâ&#x20AC;&#x2122;re considering understands the diďŹ&#x20AC;erence between transferred leads that converted due to another sales repâ&#x20AC;&#x2122;s eďŹ&#x20AC;orts and â&#x20AC;&#x2DC;deadâ&#x20AC;&#x2122; leads that havenâ&#x20AC;&#x2122;t converted at all. Iâ&#x20AC;&#x2122;m not suggesting that thereâ&#x20AC;&#x2122;s a particular right answer to this typical, confusing situation (that has the benefit of happening all the time in the real world), just that you should be thinking about what your companyâ&#x20AC;&#x2122;s answer to this question is (who gets credit) and whether your system tracks it eďŹ&#x20AC;ectively. Secondly, recognize that there are many such pitfalls when it comes to evaluating performance using data from your CRM, LOS or any other system. A good system will provide both the flexibility to track your processes the way youâ&#x20AC;&#x2122;ve defined them as a company, but also let you use a reverse (not forward) mortgage template as a starting point so that it doesnâ&#x20AC;&#x2122;t cost you exorbitant amounts to custom fit for your needs.

In Closing The evolution currently underway in software tools in the reverse mortgage space is exciting to watch and holds out the promise of an eďŹ&#x192;cient industry delivering products to a mass market of senior customers that will depend on these solutions going forward. While the sales function is certainly not the only beneficiary of new development, it is without a doubt one of the most important as the face of the industry to consumers. Next month, weâ&#x20AC;&#x2122;ll discuss the sales metrics that prioritize eďŹ&#x20AC;ective sales managersâ&#x20AC;&#x2122; time in critical areas like sales territory sizing, setting performance expectations and establishing compensation plans with positive incentives. Until then, enjoy the summer! About John Lunde: John Lunde is President and founder of Reverse Market Insight, the premier source for market intelligence and analytics services in the reverse mortgage industry. RMI clients include five of the top ten reverse mortgage originators, both lender and independent servicers, as well as some of the largest financial services firms in the world. Find out more at www.rminsight.net or call 949-2816470.

August 2008

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Are You Listening to Me? Sam Collins

My wife often asks me, “Did you hear what I said?” I always say, “Of course.” Admittedly, I am not always the best listener and she knows it. So, I’d like to share with you how important it is to be a good listener and how with just a little more attention, you too can become a better listener and a better senior advisor. Working with seniors requires you to be a good listener. This skill is diﬃcult for most of us, and is something we take for granted. Hardly would we ever ask ourselves “are we good listeners”. However, when it comes to building relationships and working with seniors you must learn to become a good listener. In reverse mortgage communications, listening is a skill you must not only perfect, but you are expected to be the best listener possible for your senior prospects. Being a good listener is a skill that will help you solve more problems for your senior prospects and help you avoid conflicts or misunderstandings in your relationship building process. When you are in the home of a senior, remember their home is their castle. It is the place where they have raised their children, had many good times of which they have fond memories and attachments. When you listen to your senior, you must be 26

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perceptive in order to build your rapport and relationship, which in turn builds the trust of your senior client. It doesn’t take a rocket scientist to call a senior, take the application, and then leave. However, if you failed to listen and communicate with your senior perceptively, you become nothing more than an order taker. Your goal is to leave them with a lasting impression of yourself and have them think of you as the person who listened and had empathy for their particular situation. Your perceptive listening will set you apart from all others. In today’s fast paced world, listening is seldom easy. Sometimes we must be selective in our listening, just to survive the day. We often erect survival barriers, including that of others talking. So when we are placed in a setting where we are counted on to listen, often we fail the listening test. However, once we understand the barriers and how to deal them, we can become better listeners for others and also understand while others fail to listen to us. Have you ever been in a situation where you were in a conversation, only to say something to the other person and have them look at you like you were a little crazy?...... What happened?...... Most likely you were not listening, rather you were thinking about what you wanted to say or what you wanted to do. Yes, we have all failed the perceptive listening test. We know in order to become better listeners, we must overcome the barriers. Here are the five most important barriers that aﬀect our listening: #1 Preconceived notions. Yes, we all have them, and often express them to others without even knowing. Many of these preconceived notions are only that, notions. These notions can be biased and allow us to block out other messages that allow new opinions and information to seep into our minds. Often we think we know what people are going to say, so we simply don’t listen. We do this a lot with our spouses, because we think we’ve heard it all before. In meetings we simply don’t listen because we think the person doesn’t know what they are talking about or we simply don’t like them. When we have preconceived notions, we deprive ourselves of the opportunity to learn a world of knowledge.

Time is our most valuable asset. When we take time to listen to, we are projecting that we really care, because we are sharing our most valuable asset. Giving up your time to listen to your senior clients shows you value their relationship and puts you into a special category. #3 Barrier three is the agenda barrier. This barrier is when we feel what we have to say to our listener is more important than what they have to say to us. Many of us are self-involved and care little about what others have to say. Don’t blame yourself; our society has caused these changes. However, once you are aware of this trend, you can position yourself to change. Put your own problems and concerns on the shelf when you enter your senior’s home, and concentrate on internalizing what you can do to help them, by listening perceptively about their agenda, not yours. #4 Stress is the fourth common barrier in listening. The world we live in today is full of stress. Each of us has our own set of problems. The last thing we want is to settle down and listen to the problems of others. We must learn to control our stress and allow ourselves to become involved in productive dialog with our senior clients. Often your visit to the senior is the light of their day. They need to unload their stress and they need you to listen. #5 Barrier 5 is the speed of our brain. Did you know that we listen at the speed of about 500-600 words per minute, but only speak at the speed of 150-200 words per minute? This speed of listening lessens our ability to listen perceptively, because the speed of our mind is going faster. Yes, your brain has time to think of other things, rather than listen. We must force our brains to slow down to listen enough to hear each word our senior prospects are saying. To become an eﬀective listener here are some techniques you can use: First; clear your mind of all negative thoughts. Drop preconceived notions and listen openly.

What can you do about preconceived notions? Simple, all we have to do is to remind ourselves to have an open mind and let new thoughts and ideas filter in. #2 Our second barrier is haste. Often we do not allow ourselves enough time to invest in getting in touch with our senior prospects. We are often in a hurry because we have too many things to do and so little time to get them all done. August 2008

Secondly; start listening with a fresh thought or a fresh choice of words. Allow yourself to tune into what the person is saying. When you listen, you then can add fresh thoughts and open the line of communications with your senior clients. Third; concentrate on what is being said. I really mean it, concentrate. Pretending to listen to someone is worse than not listening at all. Start today, concentrate and really do it. When you concentrate on what is being said, you will put yourself in a position many of your competitors will envy. Yes, you will be the one who captures your business and some of theirs.

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Ninth; use facial expressions and body movements that project positive thoughts into the minds of your senior clients. A smile or look of aﬃrmation that you understand is important. A blank look or smile at the wrong time indicates you are not listening. A good listener can say more than words, just through the use of improper facial expressions and body movements. I recall the story of a friend who sat by the side of an ill friend all night. The friend never said a word, but his ill friend said he felt the most comfort and secure because his friend was just there.

Fourth; look for the meaning behind what is being said. If listening to two borrowers discussing their financial situation, you should be looking for clues that will determine their true need or financial pain. When you look for the meaning behind the words, you are now empowered to become a true and trusted advisor to your senior clients. Fifth; do not interrupt. Interrupting is a cardinal sin and most often may not be forgiven. Interrupting is considered by seniors to be rude and disrespectful. Neither of these is good for you, since most times, you only have one chance to make an impression. You must work hard and be conscious of the temptation to interrupt. This is one of the most diﬃcult techniques to perfect. Why, because we want to make our opinions known, rather than listen perceptively to what our senior client wants to say. You can do it, but you must work hard to perfect the technique, not to interrupt.

Tenth; do not over react to highly emotional words. Effective listeners respond after contemplation and react in a positive nonemotional manner. Good listeners avoid being trapped by emotional tones and innuendoes. Listening to the entire story will allow you to reach a common ground and react positively. Good listening skills are something you must have in order to be effective in your communications. Good listening is learned and requires you to be willing to break through the barrier and use effective techniques. Being a good listener is easier said than done. I have to work on my perceptive listening on a daily basis, and admittedly, I am getting better, but I am still working hard to take my listening to the next level.

Sixth; become a good questioner. You must be prepared to ask questions to get to the bottom of what it is that will help your clients. If you don’t know the questions to ask, take time before your next appointment to have them written down, and don’t forget to ask them. You may even say, “That sounds interesting, can you tell me more?” When you ask questions it shows you are genuinely interested in the other person. Remember; don’t forget to listen to the answers to your questions.

I have a challenge for you. On your next appointment, take five minutes to read this article again. Challenge yourself to become the best possible listener. Now, imagine what you would expect from someone who is listening to you to solve your particular situation or problem. When you hear through the ears of the other person you will elevate your listening and be able to oﬀer the best possible service for your senior clients and this will position you to become the best senior advisor in your marketplace and bring you enormous satisfaction of a job well done.

Seventh; write the answers down or file the points of a discussion into your memory bank. Keep these available for yourself when you reach the processing portion of the reverse mortgage is taking place. I want to be able to refer to small things I learned during our visit and use these to build my trusting relationship even further. Eighth; make sure our clients have our undivided attention. We must block out anything that might distract us from listening attentively. For example, I never take my cell phone into an appointment. I know if the cell phone rings, it will not only distract me but my senior client. I also ask my senior client to refrain from phone calls, and stress that the information we discuss is very important to their future and I do not want them to miss anything vital to their situation. Most agree and respect you even more. This also elevates your status and value.

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About Sam Collins: Sam Collins is the President of Sam Collins Reverse Marketing, LLC and Founder of REMALO, the Reverse Mortgage Association for Loan Oﬃcers. REMALO is a web based National sales, marketing, training, and full service center, created exclusively for Reverse Mortgage Loan Oﬃcers, Correspondents, Branch Managers, and key executives, and brokers. www.remalo.org