The Reverse Review July 2008

July 2008

THE

REVERSE “Forward Thinking in Reverse”

review Volume I, Number 4

Implementing Ethical Training Practices into Your Reverse Mortgage Business Become successful in the reverse mortgage industry by implementing these necessary components into your daily business practices.

Paul Fiore Can You Hear Me Now? Three Keys to Sales Productivity Learn how to increase your sales performance and productivity by adding these three dimensions to your arsenal.

Monte Rose Prospect and Referral Illuminative Marketing Strategy If perception is everything and the first impression is the most lasting one, learn how to capture the attention of your audience and keep it.

Valerie VanBooven

Borrower Protection Systems: Defense Against Our Natural Predators John LaRose PAGE

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Anyone involved in our industry has a responsibility to protect our senior clientele from fraud and other predatory acts. Let this article serve as a guide as you select the right borrower protection system for your company.

ALSO IN THIS ISSUE

• How to Recession Proof Your Business • Overcoming Common Sales Objections • Helping Those Who Need Assistance the Most

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Table of Contents

12 Can You Hear Me Now? Three Keys to Sales Productivity Develop a strong sales performance and become more productive by enhancing these three aspects of yourself and your business.

by Monte Rose

20 “Prospect and Referral Illuminative Marketing Strategy™” A Fancy Name for the Best Way to Dominate Your Local Market Read and learn about the crucial formula to your success in marketing to seniors and their adult children.

by Valerie VanBooven

Borrower Protection Systems: Defense Against Our Natural Predators

by John LaRose

16 22 Implementing Ethical Training Practices into Your Reverse Mortgage Business Learn about four essential practices, which will help increase your success in Reverse Mortgages.

by Paul Fiore

24 How to Recession Proof Your Business With the “R” word on the tip of everyone’s tongue, read about how you can insure your success in this down economy.

by Sam Collins

27 Overcoming Common Sales Objections When Trying to Sell Mortgages as a Loan Officer Objections are the roadblock to making any sale; read these nine most common objections and simple ways to overcome them.

The Basics 5 6 10 29 30

Cover Story

Note From the Editor

by Rob Lawrence

Ask the Underwriter Industry Snapshot

If you would like to contribute an article for a future issue, please email your article for review to editors@reversereview.com

Directory The Last Word: Helping Those Who Need Assistance the Most

by David Cesario July 2008

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Co-Editors Aman Makkar & Erica English Copy & Design Editor Harpreet Makkar Production Manager Jason Westbrook Printer The Ovid Bell Press, Inc. Contributing Authors Ralph Rosynek Monte Rose John LaRose Valerie VanBooven Paul Fiore Sam Collins Rob Lawrence David Cesario

Advertising Information Rates, specifications, and deadline information available. phone : 858-217-5332 email : advertising@reversereview.com

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

THE

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 Editors It’s hard to believe that more than half the year has flown by. It seems as if yesterday was mid-January and we were excited to be in the new year, setting new goals and making it a year to remember. Given our current industry and economic crisis, the recent collapse of IndyMac Bank, and the scares of Fannie Mae and Freddie Mac, most of us don’t know how our industry might change tomorrow (or by the time this issue goes to print).

What we need to do now, more than ever, is educate and create awareness amongst our senior clientele.

People are scared right now. Many have lost much of their savings through troubled mutual funds or other investment vehicles. For seniors, a reverse mortgage could be their saving grace, although may be overshadowed by the plight of the industry. Anyone with direct consumer contact must make an extra effort to comfort their clients. Now is not only the time to ramp up the advertising and hold more seminars, but to further educate our own sales staff on how to effectively communicate to our borrowers given the tumultuous market.

As we enter the last half of the year I would like to take the opportunity to introduce you to Erica English, our new Co-editor at the magazine. Prior to joining our team, Erica was involved in the foreclosure/REO world and also ran her own fashion, dining, and nightlife publication in San Diego. Erica brings not only her experiences from the mortgage lending and publishing industries, but also her passion to succeed in creating a first class publication. We’re truly delighted to have her working with us and look forward to making The Reverse Review an even better magazine in the coming months!

Aman Makkar, Co-Editor OPPORTUNITY KNOCKS….As the saying goes. This month I look back and see so much opportunity within the reverse mortgage industry. I really appreciate everyone’s help, and I’m now definitely in a “forward thinking in reverse” mode.

Through The Reverse Review, I hope to communicate fresh and innovative ideas. Additionally, I look forward to showing my expertise in publishing and extensive background in marketing to the reverse mortgage audience.

Thanks again for all the support!

Erica English, Co-Editor

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Ask the Underwriter

by Ralph Rosynek

Q A

How do repairs effect property final values and can repairs be completed after the reverse mortgage loan closes?

Many loan originators and borrowers continue to be frustrated by the effect of declining market values on their principal limit calculation.

The underwriting responsibility and task to determine the final property value, factoring into the equation current issues of loan “saleability” and loan “insurability”, must consider the overall condition of the property with respect to repairs as well.

Determining the property applicability to HUD and/or Investor minimum property standards requires the collaborative efforts of both the appraiser and the underwriter. While “conservative” underwriting is a concern for many originators, the preparation and analysis guidelines for determining needed or required repairs have not changed due to the declining values in the marketplace.

Providing the borrower with the best upfront prequalification information based upon estimated property value in a declining market adds additional research and skills to current origination activities.

A “walk thru” or at home origination adds considerable value to the loan originator’s assistance to determine an initial property value. In the absence of this access, a thorough discussion of property condition should be undertaken in the initial discussions with the borrower before coming to a preliminary property value estimate to be used with a loan calculator.

The following comments and information are a summary of different underwriting perspectives and are offered for consideration. Some of the items indicated may differ from lender to lender, however, in general, a working knowledge of repairs and appraisal repair comments will provide an excellent foundation to conduct property condition discussions with the borrower.

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Required repairs are usually only those necessary to protect the health and safety of the occupants and protect the security of the property.

Generally, examples of repairs (others may be added or removed from time to time) that are typically required: • •

•

•

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Inadequate exits from bedrooms to the exterior of home (fire safety issues) Leaking or worn out roofs (typically should 3 or more layers of shingles exist on a leaking or worn out roof, all existing shingles must be removed before re-roofing) Evidence of structural problems (such as foundation damage caused by excessive settlement). “Jacking” and similar repair techniques present additional issues in some cases.

Defective paint surfaces in homes constructed pre-1978.

• If the damage to the paint is minor, repairs are not required unless there is a child under the age of seven years residing in the property.

• To determine whether there is a child living in the home, lenders may require the use the application form #433-3w, Lead Based Paint Certification.

Defective exterior paint surfaces in any home, regardless of the age of the home, where the finish is otherwise unprotected. This is somewhat common to older frame homes and generally results in an appraiser notation of “scrape and paint”.

Generally, examples of repairs that may be waived or are no longer required include (others may be added or removed from time to time): • Missing handrails • Cracked or damaged exit doors that are otherwise operable • Cracked window glass • Defective paint surfaces in homes constructed post 1978 unless the surface is completely unprotected (remember the unprotected paint issue raised above) • Minor plumbing leaks (such as leaky faucets, not inoperable showers, tubs, toilets, sinks, sewers or drains) • Defective floor finish or covering (worn through the finish, badly soiled carpeting – ripped carpeting which could cause harm or danger is not included)

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• • • • •

• •

Evidence of previous (non-active) termite damage where there is no evidence of unrepaired structural damage Rotten or worn out counter tops – the kitchen must be functional Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post 1978 Poor workmanship Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting) Crawl space filled with debris and trash – depending upon the type of trash and debris which cause a health hazard Lack of an all weather driveway surface Pet issues unless they present a health and safety issue or the property and structure may be classified as animal shelter not zoned or licensed for

“Determining the property applicability to HUD and/ or Investor minimum property standards requires the collaborative efforts of both the appraiser and the underwriter.”

It is key to remember that the underwriter is responsible for the final determination of value and the safety and soundness of the property. However, the use of an appraiser familiar with current guidelines and experience in converting overall property condition to a reasonable value greatly assists in this process.

The term “cosmetic” repairs is generally misunderstood by the borrower and the loan originator. Many appraisers include interior photos of the property with little or no comment, leaving the final assessment to the underwriter.

Significant cosmetic repairs or deferred maintenance may be a contributing factor to the final value determination by the underwriter and should not be considered lightly.

When repairs are needed, the Appraisal is issued one of three ways: Subject to Completion per Plans and Specs Proposed construction where construction has not started (not acceptable for reverse mortgage lending) Under construction but less than 90% complete (not acceptable for reverse mortgage lending) Subject to Repairs or Alterations Repair or alteration conditions noted by appraiser Under construction more than 90% complete with only minor finish work remaining (i.e. floor coverings, appliances, fixtures, landscaping, etc) Subject to required inspection and/or repairs Required inspection noted by the appraiser

You must address all “subject to” conditions and required repairs before approval, either by planning to establish a repair escrow, submitting required inspection or test reports indicating a satisfactory status, or by showing that repairs are complete and have been re-inspected.

To escrow for repairs, a contractor’s bid or estimate of cost to cure determined by the appraiser must be reviewed by the underwriter.

The bid or appraiser estimate is used to determine the amount of repair escrow set aside. Included in the overall calculation of the repair escrow is the collection of an administration fee noted on the HUD-1 at closing (this may be added to the loan balance). The administration fee is the greater of $50 or 1.5% of the funds calculated for repairs.

Subsequent to funding the lender servicing department will administer the repair escrow and disburse funds.

Lender servicing procedures may vary so it is important to understand the entire process in order to adequately and clearly explain to the borrower the resolution process for repairs.

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In some cases, a repair escrow is not permissible. This is usually due to the urgent nature of the repairs, the high cost of the repairs or conditions present that are unable to be addressed by a repair escrow. Additionally, the underwriter may determine in some situations where health and safetyrelated repairs are required, that the degree of hazard or impact may cause additional or unknown secondary repairs or the need to complete the repairs prior to closing is necessary to preserve the integrity of the property and immediate safety of the borrower. Examples of some of these types of repair are: • Broken or inoperable exterior windows or doors • Inadequate exits in case of fire, including window and door bars • Roof leaks • House must be jacked up to repair foundation • Well and septic don’t meet FHA requirements • Sparking, smoking, unconnected, frayed electrical wiring • Evidence of sink holes or slush pits • Easements for “high-pressure” gas or oil lines • Evidence of soil contamination • Property cannot be legally accessed by road or right-ofway • Nearby hazards such as: • Oil or gas drilling (proposed, in progress, or abandoned) • Slush pits • Traffic, fumes, or noise to a hazardous degree • High-voltage (“high test”) powerlines in falling distance • Radio towers in falling distance • Landfills or other hazardous material

•

Generally, a property should not be rejected or determined ineligible by an appraiser for the amount of repairs noted. The appraiser comments and notations reviewed by the underwriter may result in a suggested course of action for the property which could result in approving the property.

As stated previously, it is important that the appraisal report reflects the property in form and content that the underwriter can assist the borrower in meeting their needs.

The final determination of property condition and the use of a repair escrow process may not be the sole solution to property issues and appraisal content failures.

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.

In some cases the overall cost of repairs may be the limiting factor with no one repair causing issue. A general rule for determining if the total of eligible repairs required can be accommodated by escrow is : • If the bid is less than 15% of the maximum claim amount (MCA), then you may escrow for repairs.

• Example: MCA is $100,000, and the repair bid is $14,000 (14% of $100,000), you may escrow for repairs.

• If the bid is more than 15% of the MCA, then some repairs must be completed prior to closing. (Complete at least enough repairs to reduce the bid to less than 15% of the maximum claim amount based upon appraiser reinspection. Then you may escrow for the rest).

• Example: MCA is $100,000, and the repair bid is $19,000 (19% of $100,000). $4,000 in repairs are completed and re-inspected. This brings the bid down to $15,000 (15% of $100,000) and you may escrow for the remaining repairs.

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HECM loans only: If required repairs are estimated to cost more than 30% of the maximum claim amount, the Valuation Branch of the local HUD office should review the property to determine if it is acceptable.

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Commentary by First American eAppraiseIT

“Forward Thinking in Reverse”

REVERSE

MORTGAGES A GROWTH OPPORTUNITY WORTH INVESTIGATING

Over the last 20 years, 345,000 reverse mortgages have been originated. Last year, originations hit a new high: $20 billion. As the US population ages, the market has responded with new and innovative products and services geared towards keeping seniors in their homes for longer periods of time.

National lenders in need of market diversification have migrated to reverse mortgages in an attempt to make up for lost business in other markets.

Recently Michael Fosser, senior vice president of First American eAppraiseIT, offered his perspective on this market and the opportunities and challenges that it presents to lenders.

Why are so many lenders including reverse mortgages in their product mix?

Today many market segments continue to be depressed and markets like sub prime and Alt-A are almost nonexistent. Reverse mortgages tend to be more “need driven” and less tied to market conditions. In the US today, more than 38 million eligible reverse mortgage customers own their homes outright. That’s $4 trillion in untapped equity. This offers a great opportunity for lenders to grow their portfolio of business in a market that is less sensitive to fluctuations in the real estate market.

Are some appraisers more qualified than others to service this market?

Over 90% of today’s reverse mortgage originations are insured by FHA. Not every appraiser or appraisal management company is qualified to complete these assignments. At eAppraiseIT we have a nationwide network of more than 8,000 appraisers who are FHA certified – one of the largest panels of FHA appraisers available in the industry today. To ensure a successful reverse mortgage offering, lenders need to work with an appraisal management company that can provide national coverage and still maintain reasonable turn times. In our case, that is five to seven days.

What challenges does a lender face servicing this market?

AARP recently conducted a survey of reverse mortgage customers and one of its findings was that their properties frequently need repairs. This of course can complicate the underwriting process and salability of a loan. To reduce lender concern, eAppraiseIT has created a new product specifically geared for the reverse mortgage market called “Value View”. It helps lenders assess the condition and value of a property while the loan is in the lender’s portfolio. This low cost inspection report includes a current photo of the subject property, an automated valuation using two comprehensive AVM’s, and an inspection report that answers questions regarding a property’s condition, marketability, and neighborhood. Value View is a great peace of mind option for any lender interested in originating reverse mortgage loans.

Contact Michael Fosser 800.281.6200 www.firstam.com

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Reverse Mortgage Industry Snapshot As Of June 2008

Statistics Provided by Reverse Market Insight

Top 10 Rankings by Region

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 227 451 293 83 29 19 67 1,233

YTD MIC 26,638 12,447 4,276 738 538 5,625 8,973

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

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 HUD’s Monthly HECM MIC reports 2) Loans are in unit volume, based on HUD reported mortgage insurance certificate issuance 3) Lenders are aggregated using HUD’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 Arkansas North Dakota New York Alabama South Dakota New Jersey Florida Louisiana Georgia New Mexico Utah Oklahoma Wyoming Kentucky Texas Mississippi North Carolina Puerto Rico South Carolina Tennessee U.S. Virgin Islands July 2008

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

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Can You Hear Me Now? Three Keys to Sales Productivity

by Monte Rose

What distinguishes top producers from struggling players?

salesperson’s ability to create and effectively exploit market opportunities in an efficient manner.

Top Producing salespersons broadcast a strong Signal, and minimize the interference or Noise. Thus, they come in “loud and clear.” Simply stated, their message is “heard.”

“Noise” affects new sales organizations that do not have effective learning feedback loops or have no “infrastructures” that lead to replicable success. In some cases, mature organizations which over-emphasize punitive compliance can cause significant “noise” issues.

The idea of “signal-to-noise” illustrates what I’ve observed among the hundreds of producers and managers.

Sales effectiveness is a matter of reaching the prospect, providing value, and creating a mutually beneficial relationship with the customer.

The signal, which represents the content or value one is delivering, must be clear, credible, and consistent. It must be a “strong signal.” The salesperson must broadcast an effective and compelling personal brand that the market recognizes and values.

Then, they must minimize and manage the “noise” in their system. Noise can either be: (a) psychological, (b) organizational, or in most cases (c) a combination of both.

Salespersons may under-perform due to motivational (psychological) and/or goal (organizational) deficiencies.

Low energy or not having the “right voltage” to create sustainable energy for the challenges of a sales job is motivational noise that will limit achievement. Organizational noise stems from goal deficiencies. These may run the gamut from a) Goal Starved, unclear professional goals that sustain effective sales behavior, to b) Goal Gluttons, where too many goals distract one’s focus from the main game.

This applies, not only to individuals, but to teams.

Dysfunctional organizational cultures breed apathy or lack of focus. Frequently managers or executives may inadvertently inoculate their teams with problematic attitudes and behaviors that are not observable on the surface, but nevertheless sabotage the sales effort. This includes callreluctance behaviors that are easily amplified and passed on with deadly results. Organizational noise interferes with the

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For “system-challenged” individuals, the coaching/ learning objective is to facilitate awareness of the necessary steps needed to improve one’s game, and to create a structure that supports and sustains effective behaviors.

Typically, this translates to identifying one’s strengths, choosing the set of sustainable actions based on this talent profile (i.e., the right strategy), and, most critically, ensuring effective tactical implementation. While all of these three stages are crucial, it is the third step where most organizations falter.

Why? Corporate cultures that are not “strengths-aware” typically respond to non-performance with reactive, punitive and fear-based corrections. Managers will instinctively react by “hammering harder” rather than figuring out the underlying root issues (e.g., wrong fit, goal diffusion, skill deficiencies, call reluctance behaviors, etc.). It is ironic that these noise issues are relatively easy to fix when compared to “signal issues.” Once the basic causes are identified and quantified, practical countermeasures can be employed to provide systems assistance or behavior adjustment.

Without proper assessment (i.e., using valid and reliable tools), the capability to coach and train around these issues will be hampered. In the sales environment, one is always optimizing signal strength versus individual or system noise.

As a general rule, the bigger the organization, the more “noise management” becomes the issue. Less experienced producers or sales organizations are usually preoccupied with establishing clear, and hopefully recognizable, signal transmission. In all cases, it’s about balancing time, effort and resources to optimize the “SN ratio” in your particular environment.

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How do you translate these ideas into a coherent, practical strategy that is: (a) teachable, (b) simple to use, and (c) cost-effective?

In an earlier article, I wrote about uniting insight and action. “Insight” has two foci: 1) understanding your “strengths-wiring,” and 2) connecting strategically with your target market (segmentation knowledge and application).

“Action” is all about determining the proper steps and sequence to successful closing and referral generation.

Successful “top dog” producers differentiate themselves by constantly exploiting the synergistic interaction of these two dimensions. Insight is used to make the action more effective and efficient. Knowledge of results (from critical observation of steps taken) enhances the learning loop. Awareness of one’s sweet spot, “what you do best”, the efficacy of marketing/selling skills used, and customer segmentation insight are deepened and refined in a continuous and consistent manner increasing your achievement horsepower.

Successful Companies Rely On ReverseVision

Let’s face it: marketing and selling “ain’t rocket science.”

What are the foundations of sales productivity?

To operationalize these general principles, I have found that the producer and manager need to focus on three distinct but interrelated agendas. Think of these items as the points of your “productivity triangle.”

The first guideline is to Build Your Brand. Create a strong and clear signal about your unique value proposition.

It includes understanding and exploiting your “value archetype” and ensuring that it reflects and embodies your talent wiring, experience and skills. Personal branding effectiveness is a set of systematic steps that results in what I call the “Five C’s” of Signal Strength”: Clarity, Credibility, Consistency, Constancy, Community. If any of these steps are missing, e.g., a weak understanding of your “brand community”, success will ultimately be compromised. This strategic area covers not only a coherent “visual identity” and persona, but also a well honed “story” that positions you and your product as the ultimate solution to the client’s problem.

The second guideline is Perfect Your Skills. This includes the craft of “Getting to the Kitchen Table,” the art of inquiry and conversation or “Kitchen Table Sales Skills”, and the most neglected portion of business acceleration, leveraging customer engagement by requesting referrals. Newcomers to the business, such as former forward mortgage producers, have difficulty in this domain. Because of the unique

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Complete integration from origination to processing, underwriting, closing, and shipping.

Highly scalable - for small entities to enterprises with correspondents and branches.

Sales oriented graphical interface that integrates directly with Microsoft Word and Outlook.

Direct export to Celink, RMS, Fannie Mae, UBS, Goldman Sachs, ReverseDocuments and others.

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

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characteristics of the mature market, conventional sales methods focusing on product features/benefits or price advantages don’t prove effective. Segmentation knowledge and insight to the unique needs and motivations of the senior market are necessary starting points to managing the Kitchen Table conversation. Suffice it to say, that over the thousands of hours I have spent with prospects and clients, I have discovered that there are proven principles, approaches, and techniques that work with a high degree of success and are teachable. In today’s market there is very little leeway for trial and error – hence the need for systematic, evidence-based training.

The third guideline is Extend Your Reach. This is as much psychological as it is logistical. Let’s face it: marketing and selling “ain’t rocket science.” The primary obstacle in this area is a combination of motivational or systemic “speed bumps.” Whether it’s a system for tracking prospects and clients (via a CRM), or a system that tests the efficacy of marketing approaches, or an organizational and time management system – integration determines effectiveness.

The system must be functionally integrated with the two previous dimensions to derive maximum benefit.

Sophisticated systems don’t necessarily translate to success. I know ultra-productive sales people who manage

their business with simple index cards, but they know their strengths and market extremely well. Feedback and reinforcement are key instruments in the craft of coaching. In managing a sales team, it’s not “knowing what to do” that’s a problem. Doing the right things repeatedly -- “simple” things such as consistent, sustained prospecting in a viable market segment separates the successful from the struggling producers.

In coaching producers towards breakthrough performance, these dynamic components (brand, skills, reach) form the infrastructure of success. Performance is a function of: (a) projecting a clear and strong brand signal, (b) the understanding and facility to hold and manage attention, and (c) well-timed and consistent implementation of replicable actions to economically reach and influence clients.

Depending on the experience level and capability of the producer, these three “dials” can be deliberately modulated for certain end results. For example, a new player’s portfolio will be very different from a veteran, high-end producer.

Whereas a newbie might have to be coached on spending the initial part of her career primarily on basic product or table skills, a successful veteran may have to be coached on installing customer engagement automated “drip” systems

Tradition Title Agency Serving New York State with Knowledge, Experience and Trust

We Help You Grow Your Business Providing Reverse Mortgage Services for Over 12 Years CALL OUR TEAM FOR MORE INFORMATION AT (631)328-4410 WWW.TRADITIONTA.COM AN APPROVED VENDOR WITH THE LEADING REVERSE MORTGAGE LENDERS

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to leverage customer engagement and mine their current book of business. In some cases, the most effective coaching intervention is teaching the producer how to minimize and manage his own psychological or personal system noise.

In other cases, the manager may have to function as a “noise sink,” running interference against organizational bureaucracy, back-office inefficiency, or chronic corporate “static.” In helping our corporate and individual clients, we start by assessing the foundational soundness in each of these three areas. Whether the client’s solution turns out to be a consulting, training, or coaching need, understanding the dynamics of these interrelated “lenses” is paramount.

ReverseVision Makes Companies Successful

The weakest link in the productivity triangle determines one’s level of achievement. In this business, sales productivity, or lack thereof, is not a simple “linear problem,” it is a multi-dimensional situation that ultimately can be deconstructed, (re)synthesized, and ultimately transformed.

The key point to all this is that successful performance demands a focused and orchestrated effort in all three dimensions. Build your Brand, Perfect your Skills, and Extend your Reach … and you’ll get to the top.

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.

Like what you have read?

Share your thoughts with the editor!

ReverseVision puts all the pieces into place.

Successfully used by medium and large lenders, ReverseVision is the most complete software in the reverse mortgage industry.

Thanks to the graphical POS, loan officers convert more leads. Loans are easily underwritten with the semi-automatic underwriting engine, closed with MERS-compatible documents, automatically transferred to Fannie Mae, and reported in compliance with HMDA. Companies switching to ReverseVision experience an immediate increase in their productivity.

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

email us at editors@reversereview.com July 2008

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Borrower Protection Systems: At a recent staff meeting, one of our managers recounted this experience: a senior homeowner had contacted our Borrower Care department to confirm we had received his draw request for $10,000. Our company’s borrower protection program calls for the borrower care associate, in that situation, to politely ask about the draw. Excitedly, the borrower said he’d just won the “Canadian lottery,” and officials had instructed him to send $10,000; then, they would send him the winnings. “Isn’t that great?” the homeowner gushed.

was averted. Instead of one man “losing the winnings,” the real winnings were widespread: his assets and future were protected; our client’s investment and reputation were preserved; and the mortgage industry withstood another assault from wolves at the door.

What was great was our borrower care associate, trained in and committed to anti-fraud protection and detection, recognizing the makings of a scam in-progress. Disaster

Depending on your position—as lender or investor, correspondent or government entity—your motivation for protecting borrowers may vary. From where we sit, and that

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What’s not so great is the wolves are breeding largely unchecked. Consider: the FBI reported $1 billion lost in mortgage fraud in 2005. By year’s end (2008), that number is expected to top $2.5 billion.

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Defense Against Our Natural Predators

by John LaRose being a seat padded with reverse mortgage experience, there’s no denying the ties (thus, motivations) that bind us to one another: obligations, money, risk and reputation. In other words, there are lots of reasons all of us should care about borrower protection, a lot at stake if and when we don’t.

The impact on each of us Say you’re a reverse mortgage company which typically sells loans to Fannie Mae, or to any of the other wholesale lenders or investors. On one level, you may say, “My obligation is to my shareholders, so why should I care if a loan I’ve already sold ends up going south for the borrower?”

Your rationale is—rational … on that level. After all, your institution has its money and your company’s income statement has improved. So what’s the problem? In your case the answer is fundamentally important because long after you’ve sold that reverse mortgage, the senior homeowner still identifies you with that transaction. While you can update your balance sheet to reflect the loan’s sale, you can’t update your reputation as literally being where the borrower’s problems “originated.”

If you’re an investor, simply correspond your reasons for caring about borrowers to the sub-prime meltdown. That “winner” of the Canadian Lottery isn’t so much an account number as a megaphone for whether you should be more

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regulated and whether the reverse mortgage punchbowl is being poisoned.

Boomers retire, it’s estimated the total home equity held by Americans 62 and older will top $37 trillion.

“Well, let’s just ride this out,” some might be inclined to say.

“After all, we know consumers’ and politicians’ attention spans are notoriously short. So isn’t it likely that as the reverse mortgage product becomes more understood in the market place, borrowers will become more able to protect themselves?”

“There is one guarantee, though: at first blood, the sharks will come, and they’ll come in number.

They won’t stop chewing on our borrowers and polluting our industry until their hunts stop being successful.”

You could be dead-on right. Or, your investments—and borrowers (the entire reverse mortgage industry, in fact)— could become dead in the water. Just because a senior knows “something” or learns more about the risks in the reverse mortgage industry, there is no guarantee that his assets are safe. A somewhat more glib response is to ask whether we expect to improve our chance of survival in a pool of sharks if we improve our swimming skills!

Try to imagine the coming decades—if reverse mortgages come to be viewed as a herd migration where the weakest or oldest get killed along the way or—best-case scenario, merely left behind to survive on their own. Well, overcoming that perception is likely to require really large increases in advertising budgets and attorneys’ fees. Consequently, the illogic of waiting for this to happen is obvious.

And what if more and more sharks start chasing the blood—make that money? Case in point: Baby Boomers represent the reverse mortgage industry’s greatest potential growth sector, with more than 8,000 Boomers (76 million strong) becoming eligible for a reverse mortgage every day of the next 18 to 20 years. By 2011, when the youngest Baby

HUD Foundation Specialists

There is one guarantee, though: at first blood, the sharks will come, and they’ll come in number. They won’t stop chewing on our borrowers and polluting our industry until their hunts stop being successful. That’s not likely to happen if borrowers’ safety depends upon individuals monitoring fraud in our industry. It takes a comprehensive, sophisticated, and integrated Borrower Protection system from each lender and servicer.

So how do you tell a real Borrower Protection system—from the hyperbole of a marketing department?

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For starters, Borrower Protection cannot be summed up in a sales brochure. A well-conceived Borrower Protection system is complex and integrated; if someone tells you otherwise, they may not know enough to know enough.

Second, look at how much of a company’s resources are invested in Borrower Protection. If the company is truly committed to aiding borrowers and clients, there will be obvious signs. If the company’s borrower protection resources are going to advertising, technology and/or sales—look deeper.

Third, ask for evidence of both an established, defined Borrower Protection system, and evidence that it works. Your reverse mortgage servicer should be as detailed in describing its borrower protection system— more so, in fact—than it is in describing the bells and whistles of its other functions—such as information technology or investor reporting. The company should be able to define and demonstrate how its personnel are trained, monitored, evaluated. There should be evidence

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of borrower care surveys and metrics, borrower response times, anti-fraud detection (systems and successes) already on record. And more …

What to look for in a Borrower Protection system

Lastly, compare the Borrower Protection system of one provider / servicer to another. Look for a system that is integrated and doesn’t overly depend upon any one component. Experienced professionals know that no matter how much money is spent on technology, you simply cannot automate the “human touch” so critical to the proper servicing of reverse mortgages. Ask how long the company’s Borrower Protection system has formally been in effect. Compare that to how old the company is.

If formally “caring” about borrowers is a recent addition, this may tell you where the company’s priorities really reside.

“The result is the ability to chase off the sharks … to protect every member of the herd. By doing so, it’s not just the borrower we protect, but an entire industry.”

Investing in Borrower Protection Within our company, we’ve developed a proprietary Borrower Protection Program (BPP) grounded in almost four decades of experience. The process is formalized and based upon four cornerstones: highly trained people, comprehensive systems, broad-based communications, and innovative technologies. Remove any one, and the integrity of borrower protection is compromised; ignore one for the sake of another, and vulnerabilities become apparent.

True commitment to the borrower—and, in turn, to the lender and investor—requires just as much attention to staff training as to systems integration, to continuous refinement of SOPs as to technology enhancements.

The result is the ability to chase off the sharks … to protect every member of the herd. By doing so, it’s not just the borrower we protect, but an entire industry.

About John LaRose: John LaRose has worked tirelessly for more than 20 years to promote the obligation and need for ethics in the mortgage industry.

Recognized throughout the reverse mortgage industry as a niche-marketing specialist, he is also frequently called upon for his advice and counsel.

Highly trained people, comprehensive systems, broadbased communications, and integrated technologies. One without the other, and the Borrower Protection system is inadequate.

As an example, the best technology in the world could not have prevented the fraudulent payment of $10,000 to “Canadian lottery officials” (see related article: Borrower Protection Systems: Defense Against Our Natural Predators). But people highly-trained in soft skills, antifraud detection, and borrower care protection can … and did.

Make certain the Borrower Protection system is formalized and is broad-based, multi-level, and interactive … and one that can’t be explained away with a wave of the hand or in a “got-it-covered” summary. For example, at Celink, our SOPs include step-by-step definitions of how borrowers are to be protected—and every employee has to learn and understand those borrower protection procedures just as well as they know how to log in on their terminals.

So what should you ask?

Consider asking for evidence of borrower protection systems related to the following: • Unauthorized account access and multi-level account verification: What are your steps, processes and built-in systems?

• Identity theft: What is your third-party verification process?

What surveillance training does staff undergo?

• Technology hacking and fraud: What are your e-mail, electronic payment, and electronic funds transfer preverification processes and security measures?

• Mail fraud: What internal controls and verifications are you using?

• Telephone fraud: What multi-level call monitoring processes are in place? What triggers automatic call monitoring?

• Account manipulation and decision-making: When do multilevel communications occur with the borrower?

• Third party intimidation or coercion: What interaction, communication and verification occur with home improvement contractors and borrowers?

• Time and memory lapses: Does your record-keeping address the possibility of misunderstandings on the part of the borrower as what otherwise would appear to be attempted fraud by a third party?

• Identifiable sources of fraud: Describe your pattern and behavior analyses used; pre-fund disbursement and draw review procedures; and communications with government agencies.

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“Prospect and Referral Illuminative Marketing Strategy™” A Fancy Name for the Best Way to Dominate Your Local Market

by Valerie VanBooven

By definition, the word illuminative means to enlighten, educate or clarify.

Because we currently operate in an environment of misinformation, negative Reverse Mortgage articles, ads, and nightly news specials that bash loan officers and the industry itself, it’s more important than ever to use a strategy like this to dominate your local marketplace. I give this presentation regularly to elder care and senior service providers, but it applies to anyone serving the senior market, especially Reverse Mortgage Loan Officers.

When it comes to marketing to seniors and their adult children about Reverse Mortgages, there are dozens of ways to use the “Prospect and Referral Illuminative Marketing Strategy™” to gain trust, credibility, and customer loyalty.

Translation: •

Interrupt your prospects thought process with a GREAT HEADLINE.

•

(Do this with Frequency) – meaning run your ad many times, not just 3 times.

•

Engage your prospect with fantastic copy in your ad.

Educate your prospect while keeping them engaged.

Make an Offer that is interesting to your prospect.

• •

This does NOT include a FREE CONSULTATION or FREE IN-HOME Evaluation. Offer something of substance.

Free audio CD, free report, free radio show CD, free personalized report, etc.

Simply put, education is the key. How you educate your clients and referral sources is the more interesting and creative part. Are you using old tired strategies or something new, innovative, and different from all of your competitors?

This formula applies to marketing pieces, public relations pieces, and “illuminative marketing opportunities” like senior fairs, exhibiting, seminars and speaking engagements. Rules for these “illuminative marketing opportunities” include: 1. Get noticed 2. Be memorable 3. Drive traffic to your booth or back of the room table 4. GET LEAD INFO.

There are lots of big promises out there of instant leads, prospects, and an increased bottom line for you. The real deal, however, requires commitment, consistency, real effort, follow-up, and the ability to have a little fun. The days of stuffed shirt marketing are over. The days of professionalism and expertise are still here (and more important than ever).

Contrary to popular belief, you are not going to sell a Reverse Mortgage at a senior fair. Your number one goal is to capture as much lead information as possible! There are tons of tactics that can make an event like this completely worth your time and money. If you don’t know what they are, email me.

If perception is everything, then it’s ultimately important that your marketing pieces and your message make your prospects believe that they would be absolutely crazy to do business with anyone other than YOU. To do that, you need to be perceived as the industry expert, not just the salesperson of your service! Great headlines, great copy, and great market data (in layman’s terms) are essential.

Finally, here are the rules of marketing on the internet and specifically related to your complicated website that needs a make-over…

Here’s my formula for a great ad:

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1.

2.

3.

4.

5.

6.

Keep it Simple….(I could go on and on about this one!)

Capture leads (this should be #1) Networking/Relationship Building Interaction Webinars and Videos Convert leads into sales

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Your landing page should equal one request, one action, one option. No confusion.

Prospects should have zero access to anything else until you capture their information. Keep it simple! A side note here- getting the prospect to ENTER their information on your website requires a really great FREE OFFER (see above!), not “a salesman will call youâ€? kind of stu. Get rid of it.

If you want to see a really great landing page go to www.

MySeniorService.com.

Obviously there is a lot more to the “Prospect and Illuminative Marketing Strategy™â€? including the step-by-step “ideal clientâ€? strategy and more. I’ll elaborate more in future articles. Just remember that education is the key, and HOW you educate is even more important in today’s competitive and misinformed environment.

About Valerie VanBooven: Valerie VanBooven RN BSN is the National Marketing Director for Next Generation Financial Services, a Division of 1st Mariner Bank. She is a professional speaker and the author of the books “Aging Answers� (2003) and “The Senior Solution� (2007). Her websites are www. ngfs.net and www.MySeniorService.com . Valerie can be reached at valerie@nextgenfinser.com.

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Implementing Ethical Training Practices into Your Reverse Mortgage Business

by Paul Fiore

In recent years, the reverse mortgage industry has grown in popularity for both senior consumers and mortgage originators looking to expand their forward mortgage business.

The differences in this unique product offering when compared to a traditional mortgage are numerous. While reverse mortgages have been around for some time now, there is still much confusion as to how they actually work. Because the senior marketplace has grown continuously due to Baby Boomers reaching age 62, it is necessary for mortgage professionals to become more educated on the product and also create awareness for consumers.

In some cases, the appeal of a growing marketplace and seemingly simple sales process has many mortgage executives moving into the reverse mortgage business for the wrong reasons. It is important to realize that reverse mortgage lending practices must be viewed as an opportunity to assist seniors in staying in their home through their retirement years while easing financial concerns.

Mortgage professionals should understand the differences between forward and reverse mortgage products and develop a solid plan for educating and leading the industry in ethical practices.

Training Process Training your originators on the reverse mortgage product requires helping them first understand the sales process. Because senior borrowers are often skeptical, the process should not be viewed as merely a sales process, but a cycle of educating and providing resources to help familiarize seniors with the options available to them.

While a loan originator in the forward mortgage market may have been tremendously successful for having an aggressive approach, the case is different when moving into reverse mortgages. This is because many borrowers in this marketplace respond better to originators who are patient and understanding throughout the process, while listening to their questions and empathizing with them. During the training process, originators should be prepared for a longer application process and foresee that a prospective borrower may take a while to make a decision.

Organizing Your Sales Structure

Developing Your Business Plan When considering moving into reverse mortgage lending, you should train yourself to view it as a separate business and not just a new product offering. The process is different in regards to the customer demographic, product features and requirements needed from the borrower. The reverse mortgage product itself may not be hard to describe or explain upfront. However, it is important to note that there are significant differences from a traditional mortgage loan.

It is necessary to view the product as a new business when developing a plan for adding reverse mortgages to your product offering.

Mortgage executives who have educated themselves on reverse mortgage business practices are aware that the selling process is a comprehensive and careful one. Beyond

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training your originators on the application process, there must be an understanding of how the market operates including knowing the needs and concerns of senior borrowers and their family members. Because the reverse mortgage industry is based upon educating consumers on the best options available to them, it is important to train your originators who are skilled and knowledgeable in establishing a bond to create customer engagement.

When organizing the structure of your reverse mortgage business, you should first develop short and long term goals. Once you have begun to gain insight into the reverse mortgage marketplace, you can set realistic goals for your business growth over a period of time. Setting these goals in the beginning will provide your originators with a clear focus for succeeding in this business. Decide on the systems and tools you will use to compensate originators and to improve sales success. You should also integrate a sustainable system for the selling process for your originators to track results of their daily interactions with prospective borrowers. A metric system for sales ensures a way to identify and measure steps in the process, while also motivating staff and improving productivity.

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The Importance of Ethical Practices

Conclusion

Because sub-prime lending practices have taken a major hit over recent years, you would be wise to heed the warnings of higher ethical standards in lending. Once an established reverse mortgage business plan has been developed, you should adopt a code of ethics for originators to follow. A code of ethics provides your company with a statement to the industry that you value your partners and require your employees to uphold their integrity when conducting business with senior borrowers. The reverse mortgage industry has taken the steps to protect and preserve the industry with the National Reverse Mortgage Lending Association’s (NRMLA) recent introduction of a Code of Ethics. Because it is likely many of the sub-prime mortgage originators who have fallen on hard times are now seeking business within the reverse mortgage industry, this could not have come at a better time. Requiring originators to follow an ethical code is not only the right thing to do, but it will give your company a solid reputation within the industry.

By making ethical business standards a “must” within your company, you are setting yourself apart and encouraging high standards.

Building a successful reverse mortgage business can be very rewarding for originators who are willing to take their time educating themselves on the differences of reverse mortgages and building lasting relationships with senior consumers. Mortgage executives who are seeking to expand their business into this industry must first realize the importance of providing originators with informative training courses designed for each individual’s unique skill sets. Implementing these programs in conjunction with a code of ethics that promotes the needs of seniors above all else should be the primary goal for your reverse mortgage business to move forward.

About Paul Fiore: Paul joined World Alliance Financial (WAF) in 2005 and currently serves as Chief Learning Officer. Mr. Fiore’s focus is on educating partners on all aspects of the reverse mortgage industry and positioning the company as a leading institution for training in the industry. He recently held the position as Vice President of Sales for WAF’s national retail division. Paul Fiore earned his Bachelors degree in Marketing from New York Institute of Technology.

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How to Recession Proof Your Business

by Sam Collins

In uncertain financial times many people cut back on discretionary spending, especially seniors. While the cycle of uncertainty persists, reverse mortgage brokers and originators need to focus their attention more on the "essentials".

The recent housing situation has people saying the "R" word again, and the state of the economy is a subject on the nightly news and the news doesn't sound very good. It’s impossible to pick up a paper or listen to the talking heads on television without a story about soaring fuel prices, food, foreclosures or another lender going out of business.

So what are you supposed to do to withstand your reverse mortgage business and make it recession proof? If you have the will there is a way!

First, you must have the discipline to re-focus your businesses quickly. We need to understand what essentials our senior clients are experiencing and then base our marketing efforts around them.

It might be useful to look at the essential needs of humans and to get an idea of what motivates us to act, to change, or to buy products and ultimately consider doing a reverse mortgage. Psychologist Abraham Maslow suggested that we each have a "needs hierarchy" which essentially tracks our life cycle from birth to maturity.

A good analogy is to consider your needs as it relates to a ladder. To picture this hierarchy, we're not usually motivated by the "higher" needs until the basic ones have been filled.

On the other hand, all of the needs are recurring and in our daily lives, so we're up and down the ladder quite a bit.

Here is where you have an opportunity to relate the major benefits of your reverse mortgage products to one or more of these essential human needs. Then re-focus your marketing - your wording, your look, your positioning statement - your overall message so that it is clear about just how you can help a person have his or her needs met. Next,

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ask yourself what psychological "button" does your message push to get the attention of those you can help?

Survival is the first basic need – we all have the need for food, water, clothing and shelter. Reverse mortgage originators don’t just refinance houses, we provide shelter for families and help provide the ability for our seniors to pay for the essentials such as food, and clothing.

Comfort and security sit on the second rung of the needs ladder. After the basic requirements of survival are met, we naturally want to preserve and enhance what we have. Seniors who have been retired for a while are now seeing that comfort and security leaving and more difficult to maintain. Here's where home security issues begin.

How can you offer security and protection from physical and emotional harm to people who are concerned about terrorism, job loss and the future in general?

Think about specific personal security issues that you can solve and build your marketing around your senior clientele. You as a reverse mortgage loan officer can provide peace of mind for families who might have lost a breadwinner or may just be relying on entitlements such as social security or SSI. After people have had their survival and safety needs more or less met, they are ready to give and receive love, to make friends, and to belong to a group or community. This is especially important to seniors who like to gather in large groups to socialize because they have many of the same needs, wants and issues.

If we've climbed this far up our needs ladder, we find ourselves wanting to be respected - we are building not only self-respect but our reputation and status in the family circle.

This is very true for seniors who may sense they are giving up their self respect and status within the family, by having to resort to doing a reverse mortgage. Our job is to reassure them this is only natural and it is OK.

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What do you do that can add to a senior clients "approval rating" in his or her community & family circle?

Moving further up the ladder to the fifth rung. Once we have made it to the fifth rung, we are ready to "live our real lives." The need for self-actualization and inner meaning is not always recognized until we have endured a period of discontentment. We are here for a purpose and, try as we might, we won't achieve real self-fulfillment until we recognize and activate our purpose.

Next, you need to ask yourself the following questions: • What do you do that can help individuals picture and fulfill their dreams, relieve financial stress?

• How might you re-focus your reverse mortgage business to direct your seniors to their own solution?

Offer Outstanding Customer Service Once you've started attracting senior clients, you'll have to worry about retaining them, and in a stagnating economy that may be even more difficult. You must provide not only a high quality product, but also exceptional customer service.

When money's tight, clients expect more for their dollar. If you want to keep their business, you must keep them happy.

Refine your senior client service strategy to insure that every step from calling to closing the reverse mortgage is clientfocused and effective. You may want to conduct a customer

satisfaction survey or two in order to make sure your senior client’s needs are being met. Now you have the opportunity to get the real story. A focus group can also be helpful.

Contact Past Clients and Leads Go through your database, card file, address books or cancelled appointments. Next, phone or send a letter to your former clients to let them know of any new products or changes in interest rates, or property values. Inform your seniors of your workshops, tele-courses, website, blog or monthly newsletter. You never know when someone might need your specific product or service and it's up to you to keep your senior prospects, leads, former and present clients updated on the ways you can help them. A disciplined marketing approach helps people in need find you when they need you, not when you need them.

Add New Components to Your Marketing Plan Intensify Marketing One of the biggest mistakes most loan originators make during periods of economic slowdown is to cut back on marketing and advertising, doing this could be most detrimental to your reverse mortgage business. Instead, you’re marketing needs to be more aggressive and more comprehensive than ever. Start by contacting past clients and simply touching base. Chances are a good number of them

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will have projects for home repairs or other needs for which your services may be required.

Adopt Cutting Edge Technologies One of the best ways to stay ahead of your competitors is by keeping up with current technology. So if you aren’t familiar with customer relationship management software or even e-mail marketing, now is the time to do so. You can put your business online, advertise with well-placed banner ads, send out information to potential senior clients via e-mail, and outsource some of your administrative duties, such as payroll. Current technology can help your company run more efficiently and more cost effectively, plus it can open access to clients in the next city, or in another state. You'll have the potential to contact millions of people who would otherwise have never heard of you or your product and in a slow economy you need all the exposure you can get.

Stay Focused Nothing will damage your reverse mortgage more than having business short sightedness. In order for you to stay successful, you must always keep an eye on your long term goals and objectives. You will hit rough spots but do not get bogged down in the present. Do not make this mistake. Instead keep your eyes on your target. Stay focused. Every decision, every cutback, every improvement you make now must be beneficial not only in the present but more importantly in the future. Think about this before you slash prices, fire employees, cut overhead, or lower your standards.

Accommodate a Variety of Budgets Sometimes you may find it necessary to give a little back, if for some reason you have a tight deal that just won’t go otherwise. Offer to do a free evaluation of the home value and mail the client an evaluation report, then follow up with a phone call to go over the results. You may even offer to take the report personally to their home for review.

Keep the advertisements and marketing you know are already working, but also find new media for inexpensive advertising, such as: o o o o o o o o o

FREE DIRECTORIES CLASSIFIED ADS MAKE USE OF TECHNOLOGY VIRTUAL NETWORKING WEBSITES BLOGS LOCAL BREAKFAST/LUNCHEON NETWORKING SENIOR CENTERS LOCAL SENIOR CHARITIES BECOME A PUBLISHED AUTHOR

It's also time to really learn how to sell your reverse mortgage products and services more effectively.

Most senior clients need to see your name and information at least seven times before they'll be persuaded to purchase your products or services. If you carefully pinpoint your specific senior group who will most likely need you and if you market frequently and consistently to this group, you should see improved results from your marketing efforts.

There are tens of thousands of businesses across the country headed for extinction. Use these recession-proof strategies immediately and you are guaranteed to see assets where others see liabilities, opportunity where others see failure, and extra profits where others see financial losses.

About Sam Collins: Sam Collins is the President of Sam Collins Marketing, LLC and Founder of REMALO, the Reverse Mortgage Association for Loan Officers. REMALO is a web based national sales, marketing, training, and full resource center created exclusively for Reverse Mortgage Loan Officers. Not a REMALO member yet? Go to www.remalo.org to join today!

Seek New Ways to Improve If you are like most people, you are content with the status quo until something disturbs it. You should be constantly re-evaluating not just your marketing plan, but all of your business strategies including policies, pricing, and even your own performance. The idea is to eventually be as efficient and effective as possible so your company runs smoothly and profitably. Look closely at your competitors.

Talk to others in the business you respect. Read business management books. Experiment. Solicit feedback from your associates and clients. By doing several of these things you will accumulate a wealth of knowledge and experience crucial to the survival of your reverse mortgage business.

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Overcoming Common Sales Objections When Trying To Sell Mortgages As A Loan Officer

by Rob Lawrence

In any sales position, objections are the roadblock to making the sale. And, in order to succeed, you must find a way to overcome and satisfy the prospect. In the mortgage industry, we face a unique challenge - getting the customer to “believe” us, and not the other loan officer/broker (who may just be stretching the truth to get a sale, and may never deliver as promised). Gaining commitment early-on is what I teach.

But, getting the customer to trust you over somebody else, is not an easy task. Here are some of the most common objections I hear, the reasons behind them, and what I say to put the borrower at ease. Even when I think I’ve heard them all, people surprise me!

1

Not ready to do anything yet.

This could mean the prospect doesn’t fully trust you, or that you haven’t fully uncovered what their true motivations are. Creating urgency is an absolute must. Here are some things I say: When do you think you will be ready to make a decision? What day this week can I expect to hear back from you? As you know the interest rates change everyday, this is the best deal that I see as of today. If I see anything else, I will let you know, but remember we could lose this rate. What other information do you need before you can decide?

2

Interest rate not low enough.

A statement like this could mean the prospect doesn’t see the value of the transaction or that they are simply wanting a rate that isn’t available given their situation. Here are some things that I say: What rate are you looking for?

How much more would you like to save per month? What is your motivation for doing the transaction? I understand that you don’t think the rate is low enough, but if I could show you a way that you would still benefit, would that be of interest to you?

3

Still want to look around.

4

Don’t want to go through all the hassle.

5

I have to talk to my (husband or wife) or my (husband or wife) doesn’t want to do it or hasn’t made a decision.

This could mean that the prospect isn’t satisfied that they are getting the best deal available in the marketplace.

Here are some things that I say: How many other lenders or brokers have you spoken to? What rates/closing costs did they offer you? I want you as a client, what would it take to make you satisfied to do business with me? If I spend some more time, and can get you a better deal, would you be willing to give me a day or two before you make a final decision? There are many thousands of lenders and rates available, we deal with about 300 of them, this was the best deal I saw we can offer you as of today.

The prospect still may not see the benefit. Here are some things that I say: Don’t worry; we handle all of the paperwork and the loan process. All you have to do is gather a few documents that prove your income and assets and we will do the rest. The process is quick, easy, and pain-free.

At closing, you simply have to sign your name, and you will (save X amount per month, or in interest over the life of the loan, or etc.). When do you think you can get these papers to us by? O.K., I will be sure to look for them on that day and will call you if I don’t see them.

The prospect may not be the decision-maker or is simply trying to pass the buck. Here are some things that I say: Would you prefer it if I spoke to your (husband or wife) for you and explained what it is you are considering? When do you think you can speak to them by? Please give them my phone number and have them call me if they have any questions. How long will it take for you both to make a decision?

»

July 2008

27

THEREVERSE

6

review

I can’t find all the paperwork or why do you need all this?

This statement could mean the prospect doesn’t have everything in one place, or they may have misplaced their financial statements. Here are some things that I say: We only ask for documents required to close your loan. The underwriter is asking for it, so when do you think you can get these documents to us by? Here is my fax number. If you don’t have or can’t find your statements, go back to your financial institution or bank and have them simply print one out for you.

7

I found a better deal elsewhere.

8

I‘m not saving enough or I don’t see the benefit of this.

9

Closing costs are too high.

This could be construed as the prospect is still “shopping” you. This is the most common objection I hear.

Here are some things I say: Mr. (prospect), I know you may think you have found a better deal elsewhere, but did you review carefully what they offered? Are you sure you will able to get that rate (given your financial situation)? Mr. (prospect), did you know that if you are buying a house, and you switch lenders when too far into the process, you risk losing the whole deal? You don’t want to do that. Do you have a lock-in confirmation or a GFE (Good Faith Estimate) you can send me, I may be able to beat their offer? I want to make sure you get the best deal possible.

mean and are comprised of? How much did you pay on your last refinance or home purchase transaction? What part of the closing costs do you feel are too high? We showed you some ways of saving on closing costs, was that of value to you? If we could offer you reduced closing costs, or even no closing costs, and still offer you a competitive rate, would you reconsider our offer?

The important thing to remember about objections is that they signal that a prospect hasn’t fully been sold, or that a borrower isn’t completely on board. By uncovering objections early, eliminating them, and continuing to build trust, you will close more loans in less time and make more money. Use my examples above and you will get more loans to the closing table with a lot less fall-out.

About Rob Lawrence: Rob Lawrence is ranked one of top national trainers in the mortgage industry. He is the currently the CEO of Battlecall.com, coaching, tools and resources to turn mortgage professionals into mortgage warriors. Visit www.battlecall.com for his free “Sink Or Swim” weekly newsletter, mortgage training, marketing advice and more.

This could mean the prospect doesn’t think that $50 or $100 or more saved per month is worth the trouble. Here are some things that I say: Your monthly savings of X, is a night out with your family, money saved, a potential vacation fund, etc. In addition to the monthly savings, you are also saving X thousands of dollars over the life of the loan and X amount in additional interest payments. Although you aren’t saving a whole lot, remember you are cutting X years off the life of your loan and the savings to you will be X.

The prospect may not be fully educated on what closing costs are comprised of or wants a no-closing-cost loan. Here are some things that I say: Did you know that if you pay the closing costs on your loan, you may be able to get a lower rate? Do you know what all of the closing costs

28

reversereview.com

Directory

David Cesario 1st Reverse Financial Services, LLC 410 Quail Ridge Drive Westmont, Illinois 60559 (877) 574 - 1000 info@1streverse.com

America’s Recommended Mailers, Inc. 1680 S. Hwy 121, Bldg. B Lewisville, TX 75067 (800) 992 - 2722 armleads.com

10801 Thornmint Rd Suite 250 San Diego, CA 92127 (877) 229 - 7799 appraiserloft.com information@appraiserloft.com

Rob Lawrence BattleCall.com 28 Bayley Street, Suite 104 Pawtucket, RI 02860 (401) 316 - 4670 battlecall.com roblawrence@battlecall.com

Celink Reverse Mortgage Servicer 3900 Capital City Blvd Lansing, MI 48906 www.celink.com

“Forward Thinking in Reverse”

FirstAmerican/eAppraiseIT 5 Cherry Hill Dr Suite 200 Danvers, MA 01923 eappraiseit.com (800) 281 - 6200

Ibis Capital, LLC 2101 Pacific Avenue PH 701 San Francisco, CA 94115 (800) 566 - 5077 reversemortgagehomepage.com info@ibisrmo.com

Monte Rose 17100 Gillette Ave Irvine, CA 92614 (800) 516 - 0545 monterose.biz info@monterose.biz

Reverse Mortgage Association for Loan Officers 22 Polly Drummond Hill Rd. Newark, DE 19711 (877) 2NARMLO (877) 262 - 7656 remalo.org

Valerie VanBooven Next Generation Financial Services Reverse Mortgage Nation 3301 Boston Street Baltimore, MD 21224 (888) 973 - 8377 ngfs.net

July 2008

OnTheLevel 2982 Ora Avo Terrace Vista, CA 92084 (800) 909 - 1110 onthelevel@mac.com

John Lunde Reverse Market Insight, Inc. Aliso Viejo, CA (949) 429 - 0452 rminsight.net info@rminsight.net

Reverse Vision 3310 Pollock Place Raleigh, NC 27607 (919) 834 - 0070 reversevision.com info@reversevision.com

Tradition Title Agency 1991 Union Boulevard Suite C Bay Shore, NY 11706 (631) 328 - 4410 traditionta.com info@traditionta.com

Paul Fiore World Alliance Financial Corp 3 Huntington Quadrangle Melville, NY 11747 (800) 562 - 6755 worldalliancefinancial.com info@worldalliancefinancial.com

29

The Last Word review

THEREVERSE

Helping Those Who Need Assistance the Most

by David Cesario One of the true privileges of working in the reverse mortgage industry is the fact that reverse mortgage loans truly assists seniors who find themselves in financial need. Nothing in mortgage lending can compare to the gratification that is obtained when you assist a senior to eliminate financial stress in their lives.

Many of the seniors that have been helped by reverse mortgage loans faced difficult, and sometimes heartbreaking financial decisions. Reverse mortgage lenders have helped seniors out of foreclosure, have provided access to funds to pay for medical expenses, ever escalating real estate taxes and the cost of upkeep of their homes (along with a myriad of other items). Without the reverse mortgage program, some of these seniors had to choose between very difficult choices. The reverse mortgage product truly has been a great assistance to thousands of seniors.

But for every senior that has been able to realize the benefits of a reverse mortgage loan, there are many more that would like a reverse mortgage, but simply cannot financially qualify. Some of the barriers to those unable to qualify for a reverse mortgage loan include: 1. Declining market values 2. Owing more on an existing mortgage than the proceeds a reverse mortgage can provide 3. The cost required repairs to make the home meet FHA or Investor guidelines in addition to outstanding mortgage balances 4. Lack of funds to address minor shortfalls There have been some attempts to improve access to reverse mortgage loans for this group, but there are still thousands of borrowers that cannot qualify. The calculation of proceeds leaves them just short of obtaining sufficient funds to retire their existing mortgage debt, and they have no additional resources to pay down the outstanding balance.

Other borrowers who do qualify are finding that they are not realizing the amount of proceeds they anticipated. While the reverse mortgage provides some relief to their financial situations, they continue to face additional financial hardships.

According to a recent informal poll of reverse mortgage lenders, as many as 10% to 15% of interested reverse mortgage prospects fall into the hardship or “just missed” category.

30

So what can be done?

Lenders are working to find new ways to address this issue and provide additional access to funds for borrowers. HUD continues to work on passage of the FHA Modernization bill that may provide reduced costs and enhanced program features for HECM’s. But our nation’s political leaders still have not come to consensus and the beneficial reforms to the HECM program contained within this legislation continue to be some time off in the future.

Some lenders are reducing their upfront originations fees to assist these hardship cases while other lenders have been working to create new and innovative loan programs. One such program that has been created to address this underserved class of borrowers is the HECM Pathway Reverse Mortgage Loan. The HECM Pathway is an FHA insured reverse mortgage that provides borrowers with enhanced funding opportunities in hardship situations.

A recent sample showed that a 66 year old borrower with a $200,000 valued home was able to access over $4,500.00 in additional available proceeds under the HECM Pathway program compared to a HECM 150 CMT program. The program is available on a case-by-case basis for borrowers who fit the description of financial “hardship”. Financial hardship, as applied to the HECM Pathway program, is defined as a borrower who would need to bring funds to closing or who is receiving less than $7,500.00 in available proceeds at loan funding. If a borrower met this definition of financial hardship, then they may be eligible for this special program.

Many lenders are working to address this underserved group of seniors. There appear to be new products in development by lenders, but the HECM Pathway appears to be the first one released to address this group of seniors who truly need assistance the most.

Be sure to ask your reverse mortgage wholesaler about additional products they may have available to assist more of your borrower prospects to qualify for a reverse mortgage loan. These loan products can provide beneficial outcomes for everyone involved!

About David Cesario: David J. Cesario is the Executive Vice President of 1st Reverse Financial Services, LLC, a subsidiary of Wilmington Savings Fund Society, FSB. The author can be reached for additional information or questions at dcesario@1streverse.com or via telephone at 877-574-1000.

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