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CLASSIFYING TWO-UNIT PROPERTIES PG. 31 THE RELATIONSHIP BETWEEN LENDER AND TPO PG. 34 + PETE ENGELKEN SITS DOWN IN OUR HOT SEAT PG. 14
w
THE
REVERSE february 2013
{ the }
review
underwr ter’s experience
How the DEMANDING ROLe OF HECM UNDERWRITER makes this job the profession’s gold standard
The Reverse Review February 2013
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CLIENT FOCUS
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TEAMWORK
INNOVATION
RESPONSIBLE CITIZENSHIP
At our core, each of us finds what truly matters. At Urban Financial Group, our path to success boils down to six unwavering principles: Client Focus, Integrity, Teamwork, Respect for Each Individual, Innovation and Responsible Citizenship. These values are woven into the DNA of our entire staff and embedded in our culture. These six principles guide our behavior and set the bar higher for each of us every day. So in a world where people and businesses are faced with and tempted by shortcuts, we at Urban resolve to take the right path – every time. It’s this determination to do the right thing that has made us a leader in Reverse Mortgage lending. When you let your values guide you, the right path becomes clear. Goals are reached. Business grows. Find out how we can partner with you. Email us today.
info@reverseit.com
* According to RMI measuring number of endorsed wholesale units January – December 2011
reversereview.com
8 TRR
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The Reverse Review February 2013
From the Editor Standard and what impact this will have on the HECM market down the road. In the face of pending regulation and inevitable change, the theme of these articles makes one thing clear: To survive in this field, you need to stay ahead of the curve.
A note from jessica guerin
As we began to piece together
February’s issue, I noticed an inadvertent theme cropping up in our pages. It seems that in nearly every single article, in one form or another, our contributors are speculating about the future of the HECM. In his Originating column, Home Chex’s Mark Browning talks about the need to reset the future course of our industry, moving away from the mindset that this product is just another type of transactional mortgage and refocusing on the real needs of the senior consumer. Mehran Aram contemplates how reverse professionals can plan for the future and make a comfortable living in an everevolving, highly regulated industry. Scott Norman of Sente Mortgage discusses forthcoming legislation in the state of Texas that would make the Purchase product available to Texans in the future. And in our Spotlight section, John K. Lunde of Reverse Market Insight writes about the elimination of the fixed-rate
This fact reaffirms the need for consistent dialogue among professionals from all sectors of the reverse space. Maintaining an ongoing discussion about the future of this business is essential to preparing for what lies ahead. Whether it’s adjusting your marketing agenda, examining your compliance process or assessing your tech solutions, there is always something to be done to enhance your efficiency and increase your bottom line, even as the rules that guide us continue to shift. Our hope is that The Reverse Review addresses this need, serving as a forum for members of the reverse community to discuss how this industry can continue to grow and evolve to better serve the senior demographic. We’re grateful for our dedicated contributors, whose willingness to put their ideas on paper is helping advance the discussion about the future of our product. We’d like to invite more readers to join in the conversation. If you have insight or ideas to share, reach out to me about getting involved. Rather than being a passive spectator on the sidelines, help instigate change and play an active role in this industry’s evolution. Editor-in-Chief
{ Jessica Guerin }
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| TRR
Meet the Team Senior Publisher Reza Jahangiri
Publisher
Erik Richard
Editor-in-Chief Jessica Guerin
Creative Director Traci Knight
Copy Editor
Kersten Wehde
Marketing Director alycia colacion
Advertising Sales Rep. Brianna Conlon Printer The Ovid Bell Press Advertising Information phone : 949.269.1600 email : brie@reversereview.com Subscriptions email : information@reversereview.com Editorial Content email : jessica@reversereview.com © 2013 Reverse Publishing, LLC. All rights reserved. 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, Reverse Publishing, 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, 3800 West Chapman Ave., Orange, CA 92868
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Table of Contents
TRR 2.13
24 | marketing
The Amazing Referral Power of Newsletter Marketing How to build a profitable referral network Kevin DelGaudio
In this issue... 16 steve mcclellan Originating
29 | tech Housing Markets and Compliance Are on the Rise in 2013 Why tech solutions are essential to handling today’s demand Dan Green
08 | movers & shakers
The latest developments at companies across the reverse space
09 | Industry Update Headlining stories of the past month
Reverse Mortgage Daily
11 | Roundup
31 | appraising
14 | Hot Seat Pete Engelken
What Is This Two-Unit Property?
President and CEO of Liberty Home Equity Solutions
Tips for properly classifying an accessory dwelling unit
18 | Originating The Leadership Imperative Why we need to reset the course of the reverse mortgage industry Mark Browning
A collection of recent facts and surveys affecting the reverse market
12 | NRMLA News
22 | Originating A Future in the Reverse Mortgage Industry
Read about the association’s current initiatives.
Changes to the program are imminent, but the future still looks bright.
Marty Bell
Mehran Aram
21 scott norman
Originating
Bill Waltenbaugh
39 | secondary market What’s in Store for 2013? How the departure of the fixed-rate Standard will impact HMBS darren stumberger
40 | spotlight Farewell to the Fixed-Rate
34 john levonick Legal
How the industry will fare without its most popular product john k. lunde
50 | last word With a Little Help From My Friends john larose
44 | The Underwriter’s Experience
How the demanding role of HECM underwriting makes this job the profession’s gold standard
@
Want the online version? reversereview.com/magazine
Ralph Rosynek jessica guerin
february 2013 W IE
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FAREWELL TO THE
this issue
R SE
EVIE
RE
INSIDE
TH E
VE
E RS
Fixed-Rate ER EV
THE
CLASSIFYING TWO-UNIT PROPERTIES PG. 31 THE RELATIONSHIP BETWEEN LENDER AND TPO PG. 34
+ PETE ENGELKEN SITS DOWN IN OUR HOT SEAT PG. 14
W THE RE REVIE VE
RS E
RE V
cover WT VIE RE
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A look at the challenging job of a DE underwriter
SE
“While any kind of underwriting can be a taxing pursuit, the job of a HECM underwriter is a particularly challenging one, requiring acute knowledge of stringent FHA standards and adherence to a specific methodology unique to the reverse mortgage loan process. HECM underwriters are specially trained to handle these kinds of governmentinsured loans, and a substantial amount of experience is required to develop a true command of the process.
R
FEATURE
THE
REVERSE FEBRUARY 2013
{ the }
review
underwr ter’s experience
HOW THE DEMANDING ROLL OF HECM UNDERWRITER MAKES THIS JOB THE PROFESSION’S GOLD STANDARD
reversereview.com
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The Reverse Review February 2013
Contributors
Marty Bell
Pete Engelken
Steve McClellan
Mark Browning
Scott Norman
Mehran Aram
Kevin DelGaudio
Dan Green
Bill Waltenbaugh
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M A rt y B e l l
p e te e n ge lk e n
s te ve m c clellan
12 | NRMLA News g Marty Bell is NRMLA’s senior vice president of communications and marketing. This is Bell’s professional Act III after careers in books, journalism and the Broadway theater. Bell is the author of two novels and four nonfiction books, and his writing has appeared in publications including Playboy and New York magazine. Bell wrote and produced the awardwinning documentary film The Boys of Summer and produced 15 Broadway shows (including Ragtime, Fosse and Dirty Rotten Scoundrels) that won 27 Tony Awards.
14 | Hot Seat g Pete Engelken has served as president and CEO for Genworth Financial Home Equity Access, Inc. and its predecessor, Liberty Home Equity Solutions, since 2005. Engelken has more than 20 years of management experience. He earned a master’s degree in business administration and a B.S. in finance and economics from California State University, Sacramento. Engelken is a certified public accountant and he currently serves on NRMLA’s Board of Directors, holds the office of co-vice chair and chairs the Government Relations Committee.
16 | Embracing Change in 2013 g Steve McClellan is the managing director and CEO of Urban Financial Group. He has more than 30 years of finance and financial services experience, and has served at the executive level at Bank of America, Wells Fargo, TRC, HomeBanc and Generation Mortgage. His experience includes leading financial services organizations and being a public company CFO. McClellan holds a B.S. from the University of Houston and an MBA from the University of Texas.
ma r k b r ow nin g
Sc ott n or man
Me h r an aram
18 | The Leadership Imperative g Mark Browning is the founder and president of HomeChex, a firm exclusively devoted to managing housing wealth and reverse mortgages for 15 years and based in Rochester, New York. He has a background in structured mortgage finance. Prior to becoming an entrepreneur, Browning was CEO for the U.S. Mortgage Banking platform of a multinational bank. He has been a NRMLA Board Member since 2005. mbrowning@homechex.com
21 | The HECM for Purchase in Texas? g Scott Norman is the presidentelect of the Texas Mortgage Bankers Association. In 1999, Norman founded the Texas Association of Reverse Mortgage Lenders, where he managed three successful campaigns to amend the Texas Constitution in order to enhance reverse mortgage lending. Norman served on the NRMLA Board of Directors from 2005 until 2009. 512.423.4545 texasmba.org
22 | A Future in the Reverse Mortgage Industry g Mehran Aram is president and CEO of The Aramco Group. A 1984 graduate of the University of San Diego School of Business, he founded Aramco Mortgage in 1998 after five years in the industry. Aram is a Certified Reverse Mortgage Professional with more than 20 years of industry experience and serves as a mortgage analyst for several San Diego radio stations.
k ev i n d e l g a ud i o
d an gr e e n
bi ll waltenbaugh
24 | The Amazing Referral Power of Newsletter Marketing g Kevin DelGaudio is marketing director at the Senior Reverse Network, division of Jet Direct Mortgage, based in Long Island, New York. He is a graduate of Long Island University with a degree in marketing. DelGaudio started his mortgage career in 2002 and is still an active MLO, licensed in New York and New Jersey. DelGaudio is working on his first book, a consumer’s guide to reverse mortgages.
29 | Housing Markets and Compliance Are on the Rise in 2013 g Dan Green is the EVP of marketing at Mortgage Cadence. Previously, Green served as Prime Alliance Solutions’ COO and chief marketing officer following an eight-year career with CUNA Mutual Mortgage, where he was responsible for origination, servicing, lending technologies, process re-engineering and education. With almost 30 years of credit union mortgage experience, he is an expert in credit union mortgage lending and is a frequent presenter at industry forums.
31 | What Is This Two-Unit Property? g Bill Waltenbaugh is the chief appraiser at Kirchmeyer & Associates, Inc., a national appraisal and valuation company. As a certified appraiser with more than 20 years of appraisal experience, Waltenbaugh has experienced firsthand the many changes that have significantly reshaped the appraisal landscape, from the advent of licensing to the implementation of HVCC. Waltenbaugh also holds the SRA designation with the Appraisal Institute and is active in both regional and national professional organizations.
Contributors
Dennis Gassoway
John Levonick
denni s g a s s oway
joh n le von i c k
33 | Tax Tip g As the national sales executive for ICG Inc., the nation’s most diverse and customizable real estate tax service, Gassoway is responsible for business development at all levels of the loan servicing field. Prior to joining ICG Inc. in 2007, Gassoway held business development positions at Transamerica, Lereta and LandAmerica. In addition to being the recipient of many achievement awards, Gassoway is an honors graduate with a B.A. in marketing and finance.
34 | TPOs Crave Efficiency, Lenders Demand Compliance and Control g John Levonick is the chief legal and compliance officer at Mortgage Cadence. He is responsible for identifying and managing compliance risk. He has focused on working with creditors, servicers, secondary market participants and technology vendors in providing guidance on consumer finance laws. His experience in the mortgage lending industry has given him the ability to provide the guidance and direction necessary to navigate the challenges of a constantly changing regulatory environment.
Darren Stumberger
John K. Lunde
Ralph Rosynek
39 | What’s in Store for 2013? g Darren Stumberger, managing director at Knight Capital Group, heads Agency MBS trading and is responsible for HMBS/ HREMIC trading, distribution and risk management. Prior to Knight, Stumberger held mortgage trading and finance positions at Goldman Sachs, Morgan Stanley, Merrill Lynch, Standard & Poor’s and KBC Group NV. dstumberger@knight.com
j ohn k . l unde
r alp h r os y n e k
je s s i c a gu erin
40 | Farewell to the FixedRate g John K. Lunde is president and founder of Reverse Market Insight, Inc., a performance data analysis and consulting firm specializing in the reverse mortgage industry. RMI clients include eight of the top 10 reverse mortgage lenders, plus investors, servicers and vendors to the industry. 949.429.0452 rminsight.net
44 | The Underwriter’s Experience g Ralph Rosynek is the vice president for National Correspondent Production at Reverse Mortgage Solutions. RMS is a premier provider of reverse mortgage servicing, a Ginnie Mae seller/servicer and offers mortgage banking support to the reverse mortgage industry. Rosynek is currently a member of the NRMLA board, co-chair of the Professional Development Committee and holds HUD HECM Direct Endorsement credentials. 708.774.1092 rrosynek@rmsnav.com
44 | The Underwriter’s Experience g Jessica Guerin is the editor-inchief of The Reverse Review. She has worked on the editorial teams of Chicago Home & Garden, Chicago magazine and Time Out Chicago. Prior to joining the magazine, Guerin managed the marketing efforts for a commodity brokerage firm in the Chicago Board of Trade. She has a master’s degree in magazine publishing from Northwestern University and a B.S. in journalism from Boston University.
Jessica Guerin
.
John LaRose
d ar r e n s tu mbe r ger
j ohn l a r os e 50 | With a Little Help From My Friends g John LaRose is the chief executive officer of Celink, the nation’s largest reverse mortgage subservicer. LaRose also serves on the board of directors of the National Reverse Mortgage Lenders Association and is the co-chair of its Compliance Subcommittee.
Be a part of the conversation.
Write for us!
Do y hav ou it tae what kes?
We are looking for new contributors.
Share your thoughtful commentary with our readership today.
Email jessica@reversereview.com to learn more. reversereview.com
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The Reverse Review February 2013
Movers & Shakers Read about the latest developments in companies across the reverse space.
Hav e a c o mpan y u p dat e y o u w ou ld lik e t o s e e p u b l i s h e d?
Kimberly Smith Joins AAG’s Wholesale Team AAG has hired Kimberly Smith to oversee its wholesale operations. As senior vice president of wholesale lending, Smith will work with AAG’s dedicated team to advance the company’s growing wholesale channel. Smith served previously as executive vice president of sales at Generation Mortgage Company, where she was instrumental in advancing the company’s wholesale operations to a leader in the space.
Generation Mortgage Company Introduces New Wholesale Processing Division, Adds New Training Classes Generation Mortgage Company launched a new wholesale processing division that will provide the company’s partners with tools to streamline loan processing. GMC also enhanced its training division with new and updated classes that focus on the LIBOR and HECM for Purchase products. The company is actively working to provide up-to-date training on various industry changes to help keep its wholesale partners informed. Finally, GMC would like to welcome the newest member of its team. Liane Cornelius joined the company in December as vice president of human resources.
Put your business on the map.
TRR wants your company news!
Send us your company’s latest initiatives, programs, hires, acquisitions and more, and be a part of our Movers & Shakers column. Email jessica@reversereview.com
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Email it to Jessica@reversereview.com.
Urban Financial Group Expands Field Retail Division, Hires Local Originators Urban Financial Group is growing its field retail division, hiring four new reverse mortgage consultants. New team members include Greg Manion, who will be covering the New Orleans market and reporting to William Cavanaugh, AVP of the Central Division; Suzanne Bozek, who will be covering the Dallas/Fort Worth area and also reporting to Cavanaugh; Tim Ryan, who will be covering the Phoenix area and reporting to Geoffrey Wallace, AVP of the West Division; and Laura Bopp, who will be covering the Denver area and also reporting to Wallace.
ReverseVision Hires Jeff Birdsell as Product Manager
reversevision ReverseVision, Inc., a leading vendor of reverse mortgage technology, has hired Jeff Birdsell as the company’s lead product manager. Birdsell has more than 20 years of reverse mortgage lending experience and an extensive history in software design and development. Most recently, he served as an expert consultant to highvolume reverse mortgage lenders, advising them on the design and implementation of technology solutions to improve their lending efficiency.
Open Mortgage Celebrates Its 10-Year Anniversary Texas-based Open Mortgage marked its 10-year anniversary on January 5. Founded by Scott Gordon, Open Mortgage prides itself on being a service-oriented lender providing conventional FHA, VA, USDA and reverse mortgages across 27 states. During 2012, the company added 44 new branches throughout the country and increased its staff by 15 percent.
Landmark Network Acquires Coast 2 Coast Appraisal Group AMC Landmark Network has announced its acquisition of regional appraisal management company Coast 2 Coast Appraisal Group. This is the second such acquisition completed by Landmark Network, Inc. within the last 60 days. Landmark plans to absorb Coast 2 Coast’s operations and will process all existing and new orders from its Sherman Oaks, California, office; it will also retain Coast 2 Coast’s Orange County office as a sales location.
Mortgage Cadence Announces Support of Qualified Mortgage Rules Mortgage Cadence LLC, a leading provider of Enterprise Lending Solutions, document services, compliance and default servicing technology for the financial services industry, announced its readiness to meet the new Qualified Mortgage rules released in January by the CFPB. MC’s chief legal and compliance officer, John Levonick, said the company’s two lending solutions, Symphony and Orchestrator, are designed to help customers meet these new requirements seamlessly.
Industry Update
February Edition
Brought to you by:
an update of this past month’s breaking news
News direct to you: The industry’s headlining stories at your fingertips Want even more up-to-the-minute news? Visit reversemortgagedaily.com.
headlining news 1. Walter Investment
Management Buys Security One Lending for up to $31 Million
Walter Investment Management has signed an agreement to acquire all of Security One Lending’s stock in a deal valued as high as $31 million in cash. The deal includes $20 million in cash to be paid at the time of signing and up to $11 million to be paid when Security One meets future performance benchmarks over the course of a year. Walter will acquire the company’s strong retail brand and a sales force of more than 400 originators. The deal is the second reverse mortgage acquisition for Walter, which acquired Reverse Mortgage Solutions for $122 million in November 2012. // January 2, 2013
2. NON-BORROWING SPOUSE LAWSUIT REINSTATED BY APPEALS COURT
A lawsuit concerning the non-borrowing spouses of reverse mortgage borrowers was reinstated by a court of appeals after it was originally dismissed by a Washington, D.C., district court. The suit, which was brought to the court by two non-borrowing spouses, challenges HUD’s regulations regarding the rights of a non-borrowing spouse to assume ownership of the home, even if his or her name is not on the title. The issue was first raised by AARP on behalf of three plaintiffs in March 2011. HUD revised its guidance following the suit to clarify that a surviving heir of a reverse mortgage borrower is entitled to repay the loan for the appraised value of the home at the time of sale, but the court of appeals determined that the case still had standing. The opinion leaves HUD
to decide whether to use its authority to further revise the regulations regarding non-borrowing spouses. // January 4, 2013
3. CFPB Issues New
Mortgage Compensation Rule
The CFPB announced a rule regarding compensation for loan originators and mortgage brokers that is designed to prevent steering and dual compensation. Under the new rule, originators cannot receive additional payment if the consumer chooses a loan with a higher interest rate, a prepayment penalty or higher fees. They are also banned from receiving higher compensation if consumers agree to buy title insurance from the lender’s affiliate. Finally, the rule also prohibits dual compensation, meaning that the originator cannot be paid by both the borrower and the creditor. The new rule is set to take effect January 2014. // January 18, 2013
4. CFPB Proposes Long-
Awaited Ability-to-Repay and Qualified Mortgage Rules
The CFPB has finally issued proposed definitions for what constitutes a “Qualified Mortgage” and a borrower’s ability to repay his or her loan. The Ability-to-Repay rule requires a financial history check of prospective borrowers, employment status, credit history and other obligations to gauge how much debt borrowers can take on. The bureau also stated that financial information must be verified and teaser rates can no longer mask the true cost of a loan. Lenders that comply with the stipulations of the new Ability-to-Repay rule will be issuing “Qualified Mortgages,” as they are meeting certain requirements that limit risk. These loans will generally be offered to borrowers who have a debtincome ratio of 43 percent or less. The
rule is slated to take effect January 2014; FHA-insured mortgages are exempt. // January 10, 2013
5. Senate Confirms Carol Galante as New FHA Chief
The U.S. Senate confirmed Carol Galante as the new FHA commissioner and assistant secretary for housing. Galante served previously as acting commissioner, and during her tenure in that role she said she was in favor of changes to FHA’s reverse mortgage program, including a moratorium on the fixed-rate, full-draw HECM. In a letter to Sen. Bob Corker (R-Tenn.), Galante said she is committed to making changes to the program to shore up the FHA’s mortgage insurance fund, which revealed a $16 billion-plus deficit in late 2012. According to the letter, the changes will take place January 31. // December 30, 2012
6. CFPB Targets
Foreclosures With New Mortgage Servicing Rules
The CFPB outlined plans to ramp up protections by implementing new rules for mortgage servicing companies, aiming to simplify the process for borrowers and hold servicers more accountable. The new rules restrict the servicer’s ability to begin foreclosure proceedings while it is still working with the borrower on foreclosure avoidance, requiring a 120-day loan delinquency period before foreclosure proceedings can begin. Additionally, servicers are required to notify borrowers of foreclosure alternatives; provide direct access to servicing personnel; offer a fair review process; and consider all other alternatives before foreclosure. The rules are set to take effect in January 2014. // January 17, 2013
reversereview.com
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The Reverse Review February 2013
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To learn more on how you can join, visit us at apply.reverseandrelax.com or call 855-822-3289 today! 10
| TRR
Roundup Here’s a look MARKET TRENDS
at the latest
Home Price Expectations Positive for 2013
n e w s a nd s t a t s affecting the market.
EQUITY JUMP
Senior Home Equity Highest in Three Years American seniors saw their collective home equity rise 2.4 percent in the third quarter of 2012, reaching its highest level since 2005, according to the NRMLA/RiskSpan Mortgage Market Index. The jump amounted to a $74 billion increase in equity and was driven by an estimated $66 billion increase in the aggregate value of senior housing and an $8 billion decline in senior mortgage debt.
The housing market is likely to continue its
upward trajectory in 2013,
according to Zillow’s Home Price Expectations Survey
THE CONSENSUS
released in December. A
It’s a Guessing Game
panel of 105 experts project
Three-quarters of Americans said their retirement plans are based on some sort of guess, according to a recent survey by Wells Fargo. Of the 1,000 middleclass Americans ages 25 to 75 surveyed, only 22 percent said their planning efforts are detailed and calculation-based. The survey also revealed that 50 percent of respondents said they are not confident that they have saved enough for retirement. Nearly a third said they’ll need to work until at least 80 in order to live comfortably.
home prices will rise 3.1
percent in 2013, up from previous expectations
released in September
that indicated a rise of just 2.4 percent. “An organic recovery in the housing market really took hold
in the latter half of 2012,
and this improvement is
echoed in some of the most optimistic price projections we’ve seen in years from
DEMOGRAPHICS
this group,” said Zillow’s
Baby Boomers in Charge According to recent data released from the U.S. Census Bureau, baby boomers now head 40 percent of American households. The report also indicated that the number of householders age 75 and older has increased 10 percent since 1960.
40% Number Here are some interesting facts
about aging in America
AARP STATS
Aging in Place Is a Top Concern
70 percent of AARP members said they were concerned about aging in place.
chief economist. Analysts also predicted that home prices will continue to
increase by more than 3 percent annually through 2017.
g78.2 years The average life expectancy in the United States according to data from World Bank Institute (WBI)
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The Reverse Review February 2013
NRMLA News
On the Docket
Just when we thought it was the time of year to finish the books and turn our full attention to family for the holidays, mayhem broke out in Washington and, as a result, in the press. At a Senate hearing addressing the 2012 audit of the HUD Mortgage Mutual Insurance (MMI) fund showing a $2.79 billion shortfall, Sen. Bob Corker (R-TN) suggested a two-year moratorium on the HECM program for the fund to recover. HUD Secretary Shaun Donovan responded that there were more effective ways to ensure the fund remains net neutral, as required by law. On Saturday, December 17, the Wall Street Journal published a harsh editorial stating that “the government has no business subsidizing senior homeowners so they can blow through their life savings before they die.” The piece also reiterated Corker’s moratorium idea. At that point we swung into action, sticking by our approach that you can accomplish the most by focusing on a narrow group and going to see the right person at the right time, usually the committee chair or their staff that will influence decisions. By Monday morning, NRMLA staff and our political consulting team were meeting with Corker’s staff, attempting to persuade them that getting HUD the legislative authority to make changes proposed by Donovan would take care of the fund. That afternoon we were on the other side of the aisle, in the office of Sen. Robert Menendez (D-NJ), asking for the assistance HUD was seeking. On the same day, we submitted a letter to the editor of The Wall Street Journal, arguing that its editorial was misguided. (We await word of publication.) We also spoke with the producer of a segment on World News With Diane Sawyer that criticized reverse mortgages and requested more balanced coverage. We seemed to be on a good path here. That is, until Acting FHA Commissioner Carol Galante sent a letter to Sen. Corker stating that HUD would be moving expeditiously to make reforms that included “a cessation of the use of the standard fixed-rate HECM product,” but would not implement a moratorium on the entire HECM program. The result may not be the first choice for many of us. We understand there will be concern among members about the impact of this action on consumer demand for HECMs. But, for the moment, the threat of moratorium is off the table and instead the focus is on stabilizing the program’s future. 12
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Where Can You Get Your
CRMP Continuing Education Credits? Continuing Education is the core of the Certified Reverse Mortgage Professional program. It’s your signal to borrowers you are a dedicated reverse mortgage professional intent on staying current as the world and the business change. Though we offer CE credits at every conference, you don’t have to be dependent upon NRMLA to meet your annual 12-credit requirement. The following courses have all been approved for credit. (You can also submit another course you have taken for approval.)
Generation Mortgage
Premier Reverse Closings
Reverse Mortgage 101 (1 credit)
Trusts, POAs, Conservatorships and Life Estates (1 credit)
Company
Reverse Mortgage 201 (1 credit) Reverse Mortgage Products (1 credit) Contact Dan Hultquist dan.hultquist@ generationmortgage.com
Contact Alissa Scott-Prieto aprieto@prclosings.com
Reverse Focus Reverse Basics (2 credits)
Contact Shannon Hicks shannon@reversefortunes.com
Liberty Home Equity Solutions Understanding Financial Advisors (1 credit) Contact Jud Lyman
judson.lyman@libertyhomeequity.com
Tradition Title Agency, Inc. (Credits are only available to loan originators licensed in New York.) Power of Attorney and Life Estate Basics for the Reverse Mortgage Transaction (1 credit) Trust Basics for the Reverse Mortgage Transaction (1 credit) Understanding a Title Report (1 credit) Contact Karen Keating kkeating@traditionta.com
Security One Lending HECM for Purchase (1 credit)
Reverse Mortgage Fundamentals (1 credit) HECM to HECM Refinances (1 credit) Assessing the Needs of Your Borrower (1 credit) Contact Craig Barnes cbarnes@s1l.com
Other Professional Designations Pending review and approval, up to three hours of credits taken in pursuit of another designation or license may be submitted toward the CRMP. The three-day certification class that individuals must sit through to obtain the Certified Senior Advisor (CSA) designation has been approved for three credits.
NRMLA News As a result of thoughtful effort from the Risk & Compliance Committee, NRMLA submitted proposed reverse mortgage disclosures to the CFPB early in December. 8 NRMLA coordinated guidance
with the Department of Housing Counseling regarding the requirements of the California state bill AB-2010, which takes effect January 1, 2013. The guidance was published on December 19, 2012, and can be found at nrmlaonline.org. It instructs counselors to continue using the current HECM Counseling Certificate (HUD92902), which verifies whether the session was conducted in person or over the phone. Included with the guidance is an addendum
designed by NRMLA that a mortgagee may request from the counselor that will indicate that the client was fully advised of the available counseling options and chose the one indicated on the counseling certificate in accordance with California law. The Counseling Addendum was created to facilitate consistency in the reverse mortgage marketplace. 8 On December 13, 2012,
NRMLA convened a meeting of members doing business in Massachusetts. The 20 attendees discussed the next steps regarding that state’s face-to-face counseling efforts, the implementation of which is now postponed until August 2014. 8 NRMLA’s HUD Issues
Committee is starting to draft a document concerned with nonborrowing spouse best practices.
And one more thing…
Upcoming Events: The Big Apple and the Big Easy - Plans are in place for two of our 2013 events: NRMLA in New York Eastern Regional Meeting & Finance and Investment Forum Intercontinental New York Times Square Hotel
NEWS FROM NRMLA
In Committees
brought to you BY MARTY BELL : national reverse mortgage lenders association
The reverse mortgage industry and Wall Street come together for a look at the future. // March 19-20 NRMLA in NOLA Annual Meeting & Expo Roosevelt Hotel // November 4-6 We are also planning a Western Regional Conference in Southern California in the spring. Check back here for details and registration information or visit nrmlaonline.org.
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The Reverse Review February 2013
THE HOT SEAT
things you need to know or may have been wondering february 2013
the hot seat From his first job and his first car to his optimism about the reverse mortgage market, we get the personal and professional facts from Pete Engelken, president and CEO of Liberty Home Equity Solutions, in our monthly edition of The Hot Seat.
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Pete P E RSO N AL >
You can’t always be right, but you can always do the right thing.
>
Ten years from now I’ll hopefully still be working some (because I enjoy it) and
liberty home equity solutions (formerly Genworth Financial Home Equity Access) president / ceo
spending a lot more time exercising, golfing and relaxing on warm beaches. >
If I were a professional athlete I would be a PGA golfer. There are very few professional sports careers that can continue to an age where one could also have a reverse mortgage.
>
My first car was a 1969 Chevy pickup… loud, fast and seemingly indestructible.
>
The craziest thing I’ve ever done was climb to the top of a very high river bridge and jump into the American River… 17 and stupid.
>
If I could meet anyone, past or present, it would be Ronald Reagan—he was an incredible leader who helped change the world.
>
I never miss an episode of CNBC’s Fast Money.
>
When I was younger I wanted to first be an architect, then a lawyer, and never a CPA.
>
Every morning I immediately check the financial markets.
>
My first job was at a Shell gas station when I was 16, filling gas tanks, changing oil, repairing flat tires, doing engine tune-ups and frequently unclogging restroom toilets.
>
I always try to be optimistic and constructive.
>
The most memorable moments in my life were my two boys’ births.
>
The worst purchase I’ve ever made was WorldCom’s common stock in the late 1990s.
>
The best purchase I’ve ever made was my wife’s wedding ring.
Professional >
I am optimistic about the reverse mortgage industry because so many people are (and will be) entering their retirement years, living longer and healthier lives than ever before, and they will need access to financial resources, including reverse
if i were a professional athlete I would be a PGA golfer. There are very few professional sports careers that can continue to an age where one could also have a reverse mortgage.
mortgages, to help maximize their standard of living throughout retirement. >
If I could change one thing about the reverse mortgage industry it would be to share more of our client success stories with the mainstream media so people can better understand the true benefits of the product and the role that reverse
I never miss an episode of CNBC’s Fast Money.
mortgages can play in helping seniors live a more comfortable, financially secure retirement. We can do a lot more as an industry to share these success stories with the world.
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The Reverse Review February 2013
adjust
originating Embracing Change in 2013 Ste v e M cC l e l la n
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or me, the new year is a time of reflection—a time to contemplate goals for the year ahead. While life is filled with change, it’s essential to focus on what we can control. This year begins with a sense of uncertainty related to the HECM product and regulatory changes wait in the wings. While it’s tempting to worry about the unknown, I am choosing to focus on the opportunities that lie ahead. Our industry is still a boutique business, yet it has the potential to become a prominent, mainstream financial solution. With more than 32 million baby boomers who own homes, utilizing home equity will be an essential ingredient for providing retirement income. If we can scale in a responsible and ethical fashion, we’ll have the great privilege of helping millions of Americans retire more comfortably. I am invigorated about our possibilities but know we need to
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work prudently to preserve the health of the HECM program in the year ahead. And that is my goal. Controlling Our Destiny Last year ended with HUD’s announcement of a pending moratorium on the full-draw, fixedrate HECM (as of press time, the final details have not been released). This announcement does not come as a surprise; in fact, the writing has been on the wall for some time. Home prices continued to decline; our borrowers are living longer; taxes and insurance defaults continue to be an issue; and the secondary market demand for the fixed-rate HECM has spiked. These combined factors created the “perfect
storm,” which is continuing to cause havoc on the financial stability of FHA’s Mutual Mortgage Insurance (MMI) Fund. Without private sector involvement, our only liquidity execution is with the loan program rules promulgated by FHA and GNMA. As an industry, we need to carefully examine our actions and business practices in order to sustain the HECM program for the future. Jack Welch once said, “Change before you have to.” I think that’s wise advice. We cannot simply sit around waiting for policymakers to make changes that will safeguard our industry—we need to be proactive.
According to steve: “Without private sector involvement, our only liquidity execution is with the loan program rules promulgated by FHA and GNMA. As an industry, we need to carefully examine our actions and business practices in order to sustain the HECM program for the future.
originating Change Before We Have To
Proactively Address CFPB Concerns
3 Proactively address the CFPB’s concerns
Protect the MMI Fund
Recently, the reverse mortgage product and the ethics of our industry have been challenged by certain mainstream media
Banding Together By deploying a more proactive and prudent business strategy, we can all improve the financial health of the HECM program and create a solid foundation for growth. While the pending product changes are still unclear, the good news is that consumer demand remains strong. Let 2013 be a year of reinvention, innovation, teamwork and forward thinking. Working together, we can ensure a successful future. I’ll end with another quote, this time from Henry Ford: “Coming together is a beginning; keeping together is progress; working together is success.” Here’s to a successful 2013. x reversereview.com
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spotlight
Reduce Reputational Risk
secondary market
Transitioning away from the full-draw, fixed-rate HECM could be a challenge financially, but it needs to be done to restore the health of the HECM. To those in management, it’s a good time to revisit originator compensation plans to aid in the shift. Paying salespeople based on maximum claim amount will remove any bias related to the product selection process and will better protect your business and the consumer.
Foreclosures 8 Foreclosing on a senior’s home is a huge headline risk. While we continue to wait on HUD to unveil guidelines for financial assessment (that can minimize foreclosures related to T&I defaults), we need to be mindful of the prospect’s financial picture. The HECM is not for everyone and sometimes it makes sense for a consumer to downsize or sell the home. Training your sales team on the best ways to discuss product selection, suitability and loan obligations will ultimately benefit the consumer and the industry at large.
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In response to declining home values, the MMI Fund required “rebalancing” back in 2010. FHA imposed an increase in the monthly MIP from .5 to 1.25 percent and introduced the HECM Saver. Two years later, we find ourselves in a similar position—home values deteriorated further and the number of T&I defaults remains consistent. As we wait patiently to see what the FHA’s final product adjustments will be, shouldn’t we just take immediate action? We should refocus our businesses on products that make the most sense to the borrower and have the greatest impact on the MMI fund: HECM Standard ARMs and the HECM Saver.
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Deceptive marketing: Misleading and inaccurate marketing continues to be an issue. Better “self-policing” of violators is essential. If you are in possession of a marketing piece that has questionable content, I strongly urge you to contact NRMLA’s Ethics Committee and they will conduct a review. Together, we can help protect our industry’s reputation.
2 Reduce reputational risk
*
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Borrowers taking lump-sum proceeds: The fact that 70 percent of borrowers are taking the full amount of loan proceeds at closing is a concern, especially if the borrower is younger. Changing the product mix to HECM Standard ARMs and HECM Savers will alleviate these issues.
FHA’s MMI Fund
Non-borrowing spouse issues 8 The concept of taking a younger spouse off title in order to increase eligibility initially made sense when there was an opportunity to pay off significant forward mortgage debt. However, even with the proper protections in place (education, counseling and disclosures), the non-borrowing spouse is put in a compromising position and does not want to leave their home. In my opinion, taking a spouse off title has serious repercussions and should be a practice that is highly scrutinized.
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Younger borrowers: With the average age close to 69 years old, the CFPB is worried that younger borrowers will have fewer resources to pay for everyday and major expenses later in life and may find themselves in a position where they cannot finance a future move (either due to health reasons or to downsize). As we know, the HECM is not for everyone and an initial suitability review can help disclose an applicant’s ability to fund life events.
1 Ensuring the financial stability of
Today, there are two major HECM topics that fuel negative media:
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In July 2012, the CFPB released a reverse mortgage study. Under the Dodd-Frank Act, the CFPB has the authority to issue regulations it determines necessary or appropriate based on the findings of the study. According to the research report, some of its focus will be on:
Now, I am not suggesting that we try to take on counseling reform or consumer disclosures—leave that to the CFPB. Let’s control what can be controlled and make responsible changes to our businesses without waiting for the regulators. In my view, there are three main issues that we need to be mindful of:
outlets. It’s difficult to witness reporters inaccurately describe our business or publish half-truths.
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The Reverse Review February 2013
originating
The Leadership Imperative: Resetting the Course of the Reverse Mortgage Industry Ma rk Bro w n i ng
W
hen I was in business school in Florida, we reviewed a case about an Eastern Airlines flight that crashed at night into the Florida Everglades, killing the majority on board. At the time it was the deadliest domestic airline crash in U.S. history. There was nothing wrong with the airplane; it was only 4 months old. It happened because all of the crew’s attention was given to one small problem, at the expense of flying the aircraft. Flight 401 was on a routine nighttime approach to Miami International Airport when the pilots realized the landing gear lock indicator light failed to illuminate. The pilots asked to abort the landing and be assigned a circling pattern while they sorted out the problem. Air traffic control assigned a pattern at 2,000 feet over the Everglades. The pilots put the plane on autopilot and set about determining whether a bulb had burned out or the landing gear failed to extend. The cockpit voice recorder clearly revealed that the crew was having difficulty changing the bulb and was frustrated because of a jammed cover. As this was going on, one of the pilots inadvertently knocked the autopilot and the plane began to descend so gradually that the pilots failed to perceive what was happening. The plane descended slowly for several minutes as the pilots worked on the bulb and examined the landing gear. 18
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An altitude warning alarm went off but the crew was too distracted to notice. Three other indicators were also showing that the plane was on a slow descent into the swamp. All went unnoticed because the pilots lost track of their primary mission: flying the plane. With its left wing dipping, the perfectly fit plane crashed into the darkness of the Everglades and became history. Ten years later, across the continent at an executive development program through McGill University Management Institute in Montreal, Quebec, Canada, case studies were an educational tool again. Only two students were U.S.-based and all all case studies were European or Canadian, except two: Mary Kay, a business school classic at the time, and the Eastern Airlines Everglades crash. After a decade working in banking organizations where regulatory and reporting distractions can be epic, this time I better understood the concept. The urgency of near-term issues can cause an otherwise competent team to lose sight of the core mission and allow a perfectly fit business to drift into the ground. Attending to ancillary matters can be crucial and time-sensitive, but in all cases the core mission must receive first priority‌ or risk losing the entire enterprise. What does this have to do with reverse mortgages? A lot. It has to do with
the state of the reverse mortgage industry. Washington has garnered unprecedented influence. Reporting and re-reporting have become critical priorities. The CFPB is reporting that consumers are confused by our product without speaking to a single consumer. Regulations are changing daily. New laws have been passed but not codified. Disclosures are being changed, revamped, gutted and revamped again. New reverse mortgage examination guidelines are being finalized. Human and capital resource allocations for managing regulatory compliance are enormous. Regulatory uncertainty has become the norm. Responding to the innuendo, hearsay and undocumented accusations in the press are routine duties. Big banking and insurance companies are dropping out. Big nonbanking companies are dropping in. The SEC isn’t sure about Ginnie Mae sale treatment rules. The FHA says it will be making more changes to the program, but what? Politicians want a piece of the action. The distractions are endless and nearly all time-sensitive. However, little of this has to do with improving the outlook for millions of households whose retirement plans are dependent on reliable access to their own accumulated housing wealth in retirement. Meanwhile, the reverse mortgage industry altimeter as measured by households served has been gradually
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the tool as part of a comprehensive retirement strategy. The collective attention of the industry is focused elsewhere.
we are bogged down and distracted by administrative and legacy issues, such as resurrecting the fixed-rate standard product at the expense of adding bureaucracy and administrative overlays to all products (initial draw restrictions); continuing a 10-year debate about non-borrowing spouses; and debating whether assumptions regarding pre-crash losses will turn out to be accurate. We need to move forward with progressive, consumeroriented product enhancements to facilitate use of the tool in the ways that it was originally designed: as a retirement tool, not a transactional mortgage.
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spotlight
It is time for intense focus on product design and delivery systems to best serve the consumers that can greatly benefit from the tool: the people building a comprehensive financial plan for retirement... We need to move forward with progressive, consumer-oriented product enhancements to facilitate use of the tool in the ways that it was originally designed: as a retirement tool, not a transactional mortgage.
secondary market
While we must attend and respond to the concerns of regulators, politicians and the FHA, the industry must, at the same time, return to a consumerdriven focus and product innovation based upon consumer requirements. What is the highest and best use for this product? Where does it best fit in the retirement planning process? How can the product be better designed for this purpose? How can this product be better positioned to improve the risk profile for the FHA and investors? Are the processes appropriate for the targeted user? If we focus on the consumer and get that equation 8
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These are overwhelmingly compelling statistics about the future role of housing wealth in retirement planning! It is time for intense focus on product design and delivery systems to best serve the consumers that can greatly benefit from the tool: the people building a comprehensive financial plan for retirement. Yet, as an industry
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Pew Research estimates 10,000 people turn 65 every day, and this is expected to continue for 20 years. Moreover, the Center for Retirement Research at Boston College estimates 53 percent of households are “at risk of not having enough to maintain their living standards” in retirement. At the same time, according to the census, the homeownership rate for 65- to 69-year-olds is 82 percent. Pew Research estimates that 65 percent of older homeowners have no mortgage. Further, contrary to popular belief, median housing equity increased 57 percent in the 15-year period between 1984 and 2009. It now accounts for 44 percent of total wealth of the retirement age group, versus 39 percent in 1984.
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going to the source
140k 120k 100k 80k 60k 40k 20k 0
“The reverse mortgage industry altimeter as measured by households served has been gradually declining for three years. As it drifts downward, changes in the production mix are occurring.”
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Through policy, regulation and industry trends, the HECM is being recast as an alternative product to a traditional transactional mortgage product. It is not. This transactional mindset is destructive to the long-term viability of the tool. The home equity conversion industry was built on the open-ended line-of-credit product. The three highest production years for the HECM product were fiscal 2007 to 2009. The full-draw product existed for less than half of that period. Little or almost nothing has occurred to enhance the open-ended product to draw consumers who wish to use
hecm “altitude”
originating
declining for three years. As it drifts downward, changes in the production mix are occurring. Some simplistically interpret the shift to lump-sum, closed-end products as motivated entirely by self-interested providers. The reality is that open-ended line-ofcredit production is simply declining at a faster rate than closed-end lump sum. There is much more to it. Banks with traditional line-of-credit businesses have been driven away by regulation. Consumers are badly battered by the “great recession.” Boomers are entering retirement with greater housing debt and other debt. Consumers wish to lock in the lowest level of interest rates in decades; only the lump-sum product can do that. The government tells consumers that variable rate mortgages are bad. No product innovation has occurred to update or enhance the relative competitiveness of the open-ended product following the introduction of a fixed-rate alternative in 2008. New businesses focused on retirement planning and housing wealth have been slow to develop under the current regulatory cloud. Both types of HECM loans are declining, but open-ended products are falling faster. The left wing is dipping.
The Reverse Review February 2013
originating right, it will lead and guide the path for all industry decision-making and benefit all stakeholders, including regulators. Observations and opportunities for the long term:
- This might lead to a hybrid product
that provides an initial draw with a fixed interest rate and market rate draws thereafter. The circumstance of consumers demands this product.
- Ease of access: Streamline the
process for low-utilization (lowrisk) users versus the one-size-fitsall approach. Low-risk, mainstream consumers are being discouraged from using the product by the growing complexities.
* A HECM is not a transactional
mortgage banking product. It is a financial management product. The more the industry and its regulators drive to pigeonhole the product in the context of the transactional mortgage marketplace, the less consumer value the industry has and the closer to the swamp the industry becomes.
* A focus on progressive retirement solutions wins. The singular focus on short-term issues risks driving the industry into the swamp.
- Create FHA mortgage insurance
cost advantage for low- versus higher-risk products. The present model provides the opposite incentives.
- Evaluate price advantaged open-
ended product without automatic credit line growth feature.
* Open-ended product
enhancements that serve all constituencies and reflect current market conditions are needed:
* Closed-end product enhancements that serve all constituencies and reflect current conditions are also needed:
- Develop closed-end products that
don’t mandate that the consumer take the maximum proceeds— whether they want it or not. Enable a more flexible, risk-balanced use of the tool while providing the consumer advantage of choice.
The reverse mortgage industry has clearly arrived at an intersection in its future and, potentially, its viability as an FHA program at all. Moving forward, there is no question that housing wealth will remain an essential element of the retirement planning equation for a large proportion of households. The question is whether the current reverse mortgage industry is able to move beyond preserving the status quo, recapture its focus on the consumer and attain meaningful changes in the product design. Concurrently, it must also address the immediate Washington-based issues. To me, that defines a leadership imperative. x
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The HECM for Purchase in Texas?
Want to see more stories like this? Visit reversereview.com.
Sc ot t N o rm a n
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The voters of Texas finally approved reverse mortgage lending in 1999. Since then, more than 50,000 senior homeowners have obtained a reverse mortgage. Texas now ranks second in the United States in total reverse mortgages originated.
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spotlight
Going to the source
But Texas’ overall population, like the nation’s, is growing older. This aging is a result of the maturing of the baby boomer generation, which makes up the largest segment of our population.
secondary market
The HECM for Purchase is an FHAinsured loan that will afford many of the state’s senior homeowners the ability to enhance the quality of their
Now, with a new legislative session upon us, Texas, once again, has the opportunity to champion the cause of protecting senior homeowners. The prospects are positive and the options are real. When the time comes, I urge all Texans to vote for the HECM for Purchase. Perhaps soon, Texas seniors will have the same financial options as the rest of the country. x
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Today, the reverse mortgage industry is looking to amend the Texas Constitution to allow senior homeowners the ability to purchase a home with a reverse mortgage. Texas, already home to one of the most consumer-friendly reverse mortgages in the country, is also the only state in the nation that does not authorize such a financial transaction, which is known as the HECM for Purchase.
Simply looking at the state’s aging demographics shows that we must act now to help provide liquidity and safety to the burgeoning senior housing market. Already the second largest state in the country with a current population of 25.14 million, the state projects that Texas’ population by 2030 will add between 9 million to 18 million people, expanding to a total of 32 million to 41 million. When averaging those numbers, you see a projected population of 36.4 million people, an increase of 59 percent. That is the equivalent population of another Dallas, Fort Worth, Houston, San Antonio and Corpus Christi combined.
What does the future hold for the housing industry as Texas’ population changes over the next quarter-century? One thing is certain: The ability to purchase appropriate senior housing with a reverse mortgage will be a boost to the real estate industry and to the senior homeowners who may be purchasing a new wave of seniorfriendly homes. Residential real estate firms, homebuilders and title companies, for the foreseeable future, will undoubtedly be working with an increasingly mature population. The aging of the overall population will certainly impact the housing industry in Texas and significantly increase the demand for senior housing.
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According to the Texas Department of Savings and Mortgage Lending, the state’s chief mortgage regulator, in the last six years their office has not issued a single enforcement action based on complaints involving reverse mortgages.
Baby boomers are exploding the size of the senior demographic and will continue to do so until 2020, when there will be more than 3.5 million seniors in Texas. As they retire, the baby boomers will put large demand on government programs for the state. In addition, boomers will drive housing demand toward move-up or second homes, as well as houses more popular with older adults or combined families.
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The voters of Texas finally approved reverse mortgage lending in 1999. Since then, more than 50,000 senior homeowners have obtained a reverse mortgage. Texas now ranks second in the United States in total reverse mortgages originated.
lives with a new home purchase. If authorized by the Texas legislature and by voters, senior homeowners age 62 or older will be able to use a HECM for Purchase to downsize their existing home by using the proceeds to make a down payment on a smaller residence and to finance their new mortgage. Like a traditional reverse mortgage, there are no credit or income requirements and participants never make another mortgage payment as long as they continue to live in the home. (Of the 5.68 million owneroccupied housing units in Texas, 1,307,210 are owned by Texans age 65 and over, according to the U.S. Census Bureau.)
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ince the days of the Republic of Texas, the Texas Constitution has prohibited the forced sale of homesteads with the exception of cases in which the mortgage, property taxes or home improvement loans went unpaid, or for property settlements in certain divorce and probate proceedings.
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The Reverse Review February 2013
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A Future in the Reverse Mortgage Industry Meh ra n Ara m
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hy can’t I convince my 22-year-old son to trade his aspirations of becoming a doctor for a life in the mortgage industry? Let’s see, he won’t have to take the MCAT, he can avoid four years of tough schooling and another four of training, he can probably make more money and make that money faster, and there’s no need to wake up at 2 a.m.; 9 to 5 will do just fine. Yes, the mortgage industry can be lucrative and rewarding, but as we have seen over the last couple of weeks, the government can tweak something tomorrow that changes your business forever. And yet, how are we, as lifelong industry professionals, supposed to plan for the future when the visibility ahead resembles a drive along San Francisco’s coast on a foggy day? If I were a 22-year-old man, I’m not sure I would sign up for such instability, unpredictability and an industry weighed heavier each day with regulation. But for those of us who find leaving the industry and applying to medical school a ridiculous proposition, we must
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hone our abilities of adaptation and constantly change our lives and business plans to accommodate our work environment. I think it is safe to say that the biggest change in 2013 will be the suspension of the full-draw, fixed-rate reverse mortgage. Some might say this is an unnecessary move that was an overreaction to an analysis of a book of business that occurred in the midst of the Great Recession. But perhaps arguing whether or not it was a smart move is now a moot point. The full-draw, fixed-rate HECM has been the most popular product since it was introduced in 2008 and its absence is no small matter for the reverse mortgage industry. I don’t believe it is necessarily all bad news though; I’m sure that, like our business in San Diego, reverse mortgage volume spiked for many of you whose clients realized the urgency and decided to proceed with their HECM before the changes took place. This unusually large pipeline will carry many originators well into 2013, but long-term changes seem destined to increase the popularity of the HECM Saver, which is the only fixed-rate option now available. Also, whenever a buzz such as this surrounds the reverse mortgage (and isn’t associated
with bad press), exposure will increase. Any marketing agency will tell you that is a good thing for your product. Another interesting change in store for the HECM product is the introduction of a ban on non-borrowing spouses. While not all lenders have issued a ban on these borrowers, it does seem like the industry is trending in this direction in reaction to a lawsuit by AARP. At first it seems quite easy to deduce that this could be detrimental to the 5 to 10 percent of clients that fit this category, but in the long run it’s safe to say that this move should only help the reverse mortgage product. Today, one of the most common arguments against reverse mortgages revolves around unethical lenders that do not inform clients about the situation facing a non-borrowing spouse should the borrowing spouse pass. These horror stories should be completely eliminated with this ban, thus making the HECM product appear much safer to the average American. Doctors make the big bucks because they dedicate the majority of their youth to education and they constantly work long hours; laborers make their money by sweating it out every day; and loan originators make their living by subjecting themselves to a lifestyle of ever-changing regulations, interest rates and programs. Change is simply a major part of this industry and those who accept this and can quickly adapt, evolve and improve will be the most successful at the end of the day. Whether this suspension of the fulldraw, fixed-rate reverse mortgage is permanent or just a short-term change isn’t known to anyone yet, but I don’t believe HECM volume should drop significantly due to these changes. HECM production peaked back in 2009 with more than 114,000 HECMs closed that year. Since then, volume has decreased, largely due to the housing market and the lack of equity among seniors. But with the
originating net principal amount of $298,595 on that same home.” So, what does this all mean?
With an increase in senior equity by more than $74 billion and expectations of further home appreciation, I believe the arrow is actually pointed up for HECM volume. Yes, the full-draw, fixed-rate HECM is no longer an option, but the newer HECM Saver is an extremely viable replacement.
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Bottom line: We are heavily invested in an extremely volatile industry, an industry dictated by rates, regulation and legislation. And while I’m excited for my son’s future career in medicine, I would have much rather groomed him to be the next FHA commissioner. x
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NRMLA concluded its December bulletin with a comparison of the principal amount of a full-draw, fixedrate HECM back in 2009 and a HECM Saver today. Because of today’s low interest rates, considering fees and MIP, there are actually cases in which a HECM Saver fixed-rate today would net a higher principal amount than a full-draw, fixed-rate back in 2009. “For a home with a $550,000 value, a HECM Standard adjustable rate would have yielded a net principal amount of $282,700 in October of 2009. A HECM Saver fixed-rate today would yield a
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If the principal limit isn’t changing much at all (and might even be going up in some situations) compared to 2009, there is no reason why we cannot attain and even surpass the production levels we saw during the peak of the HECM. I believe a combination of instability within the U.S. economy, a slowly improving housing market, low interest rates and increasing positive exposure of the reverse mortgage can all add up to a very busy 2013.
with less equity who wished they could get the standard full-draw, fixedrate HECM will most likely be glad to take the adjustable-rate option if that is the only remaining program.
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housing market’s slow traction it seems as though equity issues will only improve in the upcoming years. In fact, according to the Reverse Mortgage Market Index, there has already been a 2.4 percent rise in senior home equity, with senior equity at its highest levels since 2009. With an increase in senior equity by more than $74 billion and expectations of further home appreciation, I believe the arrow is actually pointed up for HECM volume. Yes, the full-draw, fixed-rate HECM is no longer an option, but the newer HECM Saver is an extremely viable replacement. And let’s not forget that for those seniors who don’t have enough equity, the adjustable-rate standard Libor is still available. Since the HECM product is still primarily a needs-based product, many seniors
There’s no need to apply to medical school.
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The Reverse Review February 2013
promote
marketing Jim is a very astute businessman who understands both the lifetime value and the referral value of a client. According to Jim, a newsletter is a smart tool that can help bring in new clientele. “Each 1 percent increase in customer retention is equivalent to a 7 percent increase in profit in just about every business,” he said. “One of the reasons why is that it takes five to 10 times more effort to acquire a new client than it does to retain one. It’s more expensive, it takes longer and it’s harder to go find new customers. A friendly customer newsletter is the strongest client retention tool you can use [to help] you develop, grow and enhance the relationship.” I instantly knew that I was talking with the right man. I mean, it’s all about the profit, isn’t it? I jumped at the chance to find out for myself, and our readers, what we need to do and how we need to do it to produce a newsletter that we can all use as a referral magnet.
The Amazing Referral Power of a Custom Newsletter kev i n d e l ga u d i o
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here is no marketing tool, skill or service available today that has the referral power of a printed monthly newsletter. This may seem a little “old school” with the advent of the Internet and email, but please read on and you’ll quickly see why it isn’t. A printed monthly newsletter with the right mix of content should bring you a minimum of one to two referral clients for every 100 newsletters mailed. So it quickly becomes a matter of how and what you do to get these results. While doing research for this article, I came across a gentleman named Jim Palmer, the self-proclaimed Newsletter Guru and the author of the book The Magic of Newsletter Marketing: The Secret to More Profits and Customers for Life. I was so impressed with the book’s content that I reached out to him for an interview for this article. After several attempts and a great deal of juggling around Jim’s hectic schedule, we were able to spend about an hour together on the phone to discuss his perspective on the benefits of newsletter marketing.
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Jim’s very first client was a mortgage broker who told him that every month he sends out a newsletter and gets a minimum of one new client by way of referral. “I give great service, but if I don’t stay in front of my customers, they forget about me because it’s out of sight, out of mind,” his client said. “I don’t need to think about my mortgage guy. Yet friends and neighbors will ask who did your mortgage for you and if I don’t keep my name in front of them every month, they forget about me.” Q&A
w Jim Paith lmer
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KD // Why are newsletters so important for growing your business?
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Just about the time you become bored with your marketing message is just about the time your average client is fully understanding it and comprehending it. So don’t be bored with what you look at all the time. It takes a long time to build brand awareness, so keep it consistent. 8
the least expensive yet most effective referral strategy out there. For a small investment of a couple hundred dollars a month, you can quickly begin a recurring stream of referrals, and if you grow your list, you’ll increase your referrals even more.
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If you send out a two-page black and white newsletter every month you will do infinitely more referral business than someone who sends out an eight-page color newsletter quarterly or a few times a year. Consistency also refers to design and type of content. You want to come up with your design and stay with it. Not every customer is going to read your newsletter front to back; realistically most will only read one or two articles, or skim it and put it down. Not that that should dissuade you from producing a monthly newsletter; it’s actually a very good thing. You’re creating top-of-mind awareness, keeping your name in front of your customers and producing a steady source for referrals.
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Newsletters can be
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KD // Too many companies look at a reverse mortgage as a single sale cycle and don’t realize the value of retaining the client relationship that took so much time, effort and money to establish. A pleased customer is an absolute goldmine for referral
JP // It’s very, very important that you mail every month. The businesses that have the most success with newsletter marketing are those that do one simple thing: They make sure the newsletter arrives during the same two- to three-day period every month. Things that arrive on a consistent basis, every month, are perceived as important, as opposed to things that arrive sporadically and are perceived as junk mail—and you don’t want your newsletter to be regarded as junk mail. By simply mailing on a consistent basis, you will instantly stand above the crowd and your newsletter will be considered a valuable piece of mail.
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JP // There are a couple of reasons why newsletters are so effective. Customers read them with their guard down, as opposed to reading a sales letter or postcard. When anyone feels a sales offer is coming they put their defenses up. But newsletters tend to be read as informational and people are conditioned to be less resistant to reading information as opposed to advertising. That’s why it’s so much better than other types of marketing. The big advantage is that you have a properly written newsletter—newsletters that are informational, friendly in tone and conversational—so the information gets through. Newsletters are also very good at increasing name-brand awareness, since your name, picture and company info are getting into their mailbox every month. They’re very good at building your reputation as an industry expert, introducing new products and services. Newsletters also tend to get read by multiple readers, making them an excellent source of referral business.
KD // Please discuss the importance of consistency in producing a newsletter.
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KD // Why are newsletters such an effective marketing tool?
JP // Yes, I agree wholeheartedly!
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JP // Newsletters are an essential part of a strategy for client retention and are a very effective tool. The overall marketing concept is one of “keeping up.” Because we know that customers who stay engaged with businesses longer, end up spending and buying more of the products and services and they also end up referring much more.
business that way too many people overlook.
You should have the majority of your content be non-sales, fun and informative—you want people to read it. You should have a monthly success story and an article or two about the business you’re in; the rest needs to be light and desirable to read by anyone. reversereview.com
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The Reverse Review February 2013
Opportunity is knocking.
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For more information contact: Laura Troy Wholesale Division Coordinator Toll-Free 866-790-6151 laura.troy@generationmortgage.com
Proud member of: © 2013 Generation Mortgage Company, 3565 Piedmont Road NE, 3 Piedmont Center, Suite 300, Atlanta, GA 30305 — 866-733-6090. NMLS #1319. For our state(s) legalese, visit: www.generationmortgage.com/statelegalese. 26
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Marketing
KD // You spoke about two types of newsletter content. Please explain.
JP // It’s about the demographic your readers are dealing with. They are much more community-based, have longer friendships and are much more likely to talk about things like their reverse mortgage. They’ll probably have a stack of your newsletters sitting on a bookshelf somewhere to give away to a friend and make a referral.
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You can also find a service to provide you with content, like mine, but be careful not to just copy articles you find on the Internet; there are copyright issues.
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The Newsletter Guru’s test for readability: If your newsletter comes out of the mailbox and your reader looks at it and can quickly determine that they can read it in 10 minutes or less, chances are very good that they’ll read it. If not, it gets put into the “to be read later” pile, which almost always turns into the round file!
JP // Past clients have stated, “We never know what to put in our newsletters and it takes so long to write copy, find articles and find someone to get it designed. We tried before and started and stopped so many times.” One strategy is to realize that you don’t have to write an entire book each month, but you do want to focus on both types of content: the work stuff and the fun stuff.
KD // Why is the newsletter so important for referrals?
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JP // You want it to look “professionally homemade” and like it came from you. The design should be light and airy; you don’t want it to look like a science textbook. You want to have at least one picture per page and preferably one picture per article. Typically, I do probably two or three articles per page, maybe one main article and two smaller ones, or three smaller articles.
KD // What are the major obstacles people face when deciding to produce a newsletter?
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JP // One of the things you need to remember is that the main purpose of producing a consistent newsletter is to build top-of-mind awareness, give people some fun information and basically just get them to remember your business. The ideal ratio of “irrelevant” to “relevant” info should be 80 to 20 percent. Many businesses owners are thrown by this; they think newsletters should be more sales-focused. But newsletters are not there to do the heavy lifting of sales. You should have the majority of your content be non-sales, fun and informative—you want people to read it. You should have a monthly success story and an article or two about the business you’re in; the rest needs to be light and desirable to read by anyone.
KD // Please talk about the design elements.
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My interview with Jim made me realize that the No. 1 priority is to be consistent, every month, without fail. Secondly, I learned that it’s important to make it fun, informative and easy to read. Newsletters can be the least expensive yet most effective referral strategy out there. For a small investment of a couple hundred dollars a month, you can quickly begin a recurring stream of referrals, and if you grow your list, you’ll increase your referrals even more. The main problem, as Jim stated, is that people don’t have the time or resources to put this together every month. That’s why the use of a service, for a very nominal fee, is your best solution. You’ll know that it will be done every month, on time, and you’ll appear consistent, which is so important when it comes to newsletter marketing. Good luck and good marketing! x
@
Have a marketing question or a product you’d like us to investigate? Please email your comments and suggestions to Kevin at marketing@reversereview.com.
I was able to coerce Jim into giving our readers a substantial discount off of his normal monthly fees, and a special program was set up just for Reverse Review readers. Visit 1clicknewsletters. com/rr to learn more. reversereview.com
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The Reverse Review February 2013
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Housing Markets and Compliance Are on the Rise in 2013
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Da n G re e n
according to dan Think about it: less than 20 years ago documents were drawn by hand, plunked out one loss of efficiency comes frightful inconsistency and, therefore, risk.
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spotlight
The housing market is on the rise, a welcome change for everyone in the industry and for homeowners too. Lending regulation is on the rise as well. Now is the time to review the solutions and technologies you are using to make sure they’re easing the compliance burden and helping produce quality loans that are good for both you and your borrower. x
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Fortunately, a great deal has changed for the better in the housing and mortgage markets. But one thing that has not changed—and is unlikely to—is the regulatory environment. Never in
What to do? Regulations are rules. Following rules consistently is, unfortunately, not something human beings do very well. Try as we might, we’re just not equipped to track so many regulations. That is where technology comes in. Technology is not only very good at consistently following rules, but in today’s environment, it is absolutely essential to remain compliant. It can help throughout the reverse mortgage cycle, starting with origination. Good compliance starts with a well-taken, properly documented application. A good origination system will ensure your loan officers get the correct information and the correct amount of information on every new application and it is disclosed correctly. Even though reverse mortgages are, for the moment, excluded from “Know Before You Owe,” today’s versions of the TILA and GFE require diligence and accuracy. And, while currently exempt from the new integrated disclosure proposals, it is likely that reverse mortgage loans will have their own new set of disclosures in the coming years. It’s best to be thinking about that now.
A properly executed application eases every other step in the mortgage process, right up to closing. So much goes into closing a compliant loan, including details on how it is originated, disclosed, processed and underwritten. Closing documents, since they are likely to be the first element reviewed in any questionable loan, are absolutely essential to the creation of a compliant loan. Here, too, a technologydriven document solution is essential. Think about it: Less than 20 years ago documents were drawn by hand, plunked out one key at a time using IBM Selectrics. Try using typewriters today. Along with the tremendous loss of efficiency comes frightful inconsistency and, therefore, risk. Back to technology and rules. Since lenders have to follow rules we may as well enlist all the help, and the technology, we can get to enable us do so.
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The latter two factors are positive signs for reverse mortgage lending. Stable to rising home values make reverse loans more attractive. This will become increasingly important as large numbers of baby boomers retire and look for ways to finance the next phase of their lives. It is no secret that too many saved too little. It is also no surprise that the last five years were hard on investments; the closer to retirement, the harder it is to make up lost value. And despite all that has transpired in the housing markets, there is still equity in homes, and that will prove important to the financial security for the current generation of retirees.
the history of both forward and reverse mortgage lending have compliance requirements been as dynamic or as stringent. Frankly, it’s hard to keep up. And it’s only going to get more difficult.
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his year marks the beginning of a new era in the U.S. housing market. For the first time in nearly five years, borrowers, lenders and investors do not need to concentrate so much on delinquency and foreclosure. Rather, attention can once again turn to purchase-money lending, rising home prices and the return of the housing market as a positive economic force.
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key at a time using IBM Selectrics. Try using typewriters today. Along with the tremendous
The Reverse Review February 2013
visit our website to read about current issues in the reverse mortgage industry! The Reverse Review’s website offers complete access to all of the magazine’s content in a clean and crisp format. Read the latest issue or peruse the archives and access important stories from past editions.
Find out how you and your company can be a part of the TRR team!
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|www.reversereview.com TRR
THE
REVERSE review
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What Is This Two-Unit Property? B ill Wa lt e n ba ug h
These arrangements are often referred to as, among other things, in-law units, granny flats, mother-in-law suites and carriage houses. It isn’t uncommon for these descriptions to incorporate a reference to relatives. That’s because the occupants are often parents in need
of informal caregiving or an adult child making use of an affordable living alternative during significant or unexpected life event transitions. One well-known ADU is the oneroom efficiency located above the Cunninghams’ garage that was once occupied by Arthur Fonzarelli in the 1970s hit TV show Happy Days.
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To answer this question, we first need to define ADU. In short, ADUs are additional living quarters on singlefamily lots that are independent and smaller than the primary dwelling unit. These spaces are often selfcontained with their own entrance, cooking and bathing provisions. ADUs
can be attached or detached from the primary structure and, in some cases, even located within the interior of the main unit in areas like the basement or attic. It is also important to note that the primary units of these properties are designed with owner-occupied intentions.
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o you have a two-unit property that needs to be appraised. Simple enough, but how should it be classified and reported? Is it a small, income-producing, two-family property that needs to be reported on the Fannie Mae 1025 form, or is it better described as a single-family residential (SFR) home with an accessory dwelling unit (ADU), to be reported on the Fannie Mae 1004 form? These are questions I get weekly from both lenders and appraisers. Everyone wants to know, “What is this two-unit property?”
On the other hand, a two-family, double or duplex is typically defined as two nearly equivalent units contained within one structure. The primary purpose is to generate income, which is accomplished by renting 8
ADUs are additional living quarters on single-family lots that are independent and smaller than the primary dwelling unit. These spaces are often self-contained with their own entrance, cooking and bathing provisions. reversereview.com
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The Reverse Review February 2013
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What do the “Big Three” (Fannie, Freddie, HUD) have to say about ADUs and how they should be handled? If the subject property
meets the following criteria for each entity, it should be reported on the 1004 form as “One with Accessory Unit” under general description in the improvements section of the report.
Happy New Year and welcome to 2013! Make no mistake: More rules and regulations are headed our way, and this could potentially include set-asides for taxes and insurance. Even with these new rules pending, reverse mortgage servicers should still be diligent about tracking the payment of the homeowners’ real estate property taxes. If you have delinquent property taxes, you can safely assume there might be delinquent HOA fees as well. A sound property tax tracking system driven by severity codes can isolate those loans that require immediate attention and keep the workload focused on those seniors needing the most attention.
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Understanding the typical purchaser’s motivation is key to determining if a property is an SFR home with ADU or an income-producing, two-family residence. If the main unit is a significant factor in the typical purchaser’s decision, the property is best described as an SFR home with an ADU.
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the 8 Track Payment of Property Taxes
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According to bill
Dennis Gassoway
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It’s really that simple. It doesn’t matter how the property is currently being used and it doesn’t matter how the borrower intends to use the property. It doesn’t matter if the unit is currently rented or if the property has separate electrical meters. To a certain extent, the zoning isn’t even the deciding factor. It all comes down to how the typical market perceives the property, and the typical purchaser’s motivation is the key. x
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Understanding the typical purchaser’s motivation is key to determining if a property is an SFR home with an ADU or an income-producing, twofamily residence. If the main unit is a significant factor in the typical purchaser’s decision, the property is best described as an SFR home with an ADU. In other words, the owner intends to occupy the main unit as their primary, long-term residence and the second unit is considered an accessory or additional feature, much like a finished basement or
outbuilding; it is an extra with respect to the main purpose. However, if income potential is the main priority, a two-family classification best describes the property and should be reported on the Fannie Mae 1025 form.
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both units to separate tenants or living in one unit and renting the other at market cost to assist the owner in paying their own living expenses.
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HUD also emphasizes the subordinate nature of an ADU. They are to be smaller in size and inferior to the main unit with respect to location and appearance. In its newest FAQ, HUD also states that it is the appraiser’s responsibility to determine if a second unit is considered an ADU. The appraiser’s findings are to be addressed in the site analysis section of the report where zoning, highest and best use, and legal use are discussed.
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Freddie Mac reports that an SFR property may have an accessory unit that is incidental to the overall value and appearance of the subject property.
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Fannie Mae states in its Selling Guide that it will purchase loans on properties with illegal accessory units as well as properties with legal accessory units as long as the value of the second unit is relatively insignificant in relation to the total value of the property.
Have a question for this column? Email info@reversereview.com. reversereview.com
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The Reverse Review February 2013
ADVANCE
Legal TPOs Crave Efficiency, Lenders Demand Compliance and Control Joh n L e v o n ic k
Lenders share all of these concerns and also add: 5 Streamlining the process for l
maximum efficiency, enabling their TPOs to provide as much of the origination work as possible while reducing the risks and avoiding the need to compromise loan quality
The goal of both parties, after all, is assuring borrowers qualify for the loan program that best fits their particular needs.
8 According to the “CFPB Supervisory
Highlights: Fall 2012,” there will be considerable focus on the ability of “residential mortgage lenders to provide consumers with clear and timely disclosures regarding the nature and costs of the real estate settlement process,” as the CFPB has found “significant non-compliance with these statutes [RESPA and TILA].”
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hird-party originators (TPOs) crave access to lending technologies that make them more productive and keep them compliant. Reverse mortgage lenders are competing for the best TPOs by providing services that permit ease of use through technology that promotes quality and efficiencies, while providing compliance guidance and control throughout the origination process. While all parties to a transaction have an interest in quickly turning a prospect into a borrower, TPOs are mainly concerned with four things: 1 Getting borrower(s) the proper counseling, an essential and differentiating l
element in reverse mortgage transactions
2 Getting the loan submission approved through the proper disclosure of fees, l
including proper payees, payors, dollar values and naming conventions (although not unique to reverse lending, meeting today’s disclosure requirements takes extra diligence)
3 Collecting all of the necessary documentation, including supporting l
documentation, into a single location in a timely manner
4 Ensuring that all of the necessary federal and state disclosures have the proper l
content, rates, fees and program disclosures and have been provided to the applicant in a timely fashion
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Lenders must control more of the process because they are ultimately held responsible for not only the loan submitted by the TPOs, but all of the activities throughout the process of the TPO, as if the lender itself were providing the service. Lenders need to guarantee that the TPO is meeting all of its compliance obligations, as the lender is ultimately responsible for the quality of all loans—ones they closed, rejected or denied. Regulatory scrutiny of lenders has never been greater. Strident attention to every detail when managing TPOs and assets sourced from TPOs in not only essential, it is mandatory. The FDIC Examination Manual clearly identifies risk associated with third-party relationships and that “[e]xaminers should evaluate all applicable activities conducted through third-party relationships as though the activities were performed by the institution itself. It must be emphasized that while an institution may properly seek to mitigate the risks
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At the end of the day, TPOs crave efficiency and lenders demand control and compliance. Balancing these variables is easily accomplished when TPOs originate from within the lender’s system of record. Lenders that enable their TPOs to price, lock and disclose from within their systems yield numerous mutual benefits, including the reflection of accurate compensation in disclosures, accurate fees, the knowledge of the proper services that can and cannot be shopped for by the borrower, and the ability to continually create disclosure packages that contain compliant content (for the TPO and the lender), without having to take on the responsibility or cost of monitoring compliance changes independently.
4444Service Providers: TPOs must educate borrowers about the services they are able to shop for, as well as which services the lender requires from specific providers.
444444Access Diverse Product Offering and Education Training: To avoid steering claims, TPOs need to establish that they offered and educated applicants on various products with various program elements to permit the applicant the
The bottom line is this: Lenders must control the process, and TPOs need to work with lenders that permit them to be both “efficient and compliant.” The solution is within the technology: One system used by both TPO and lender satisfies everyone’s needs. x 8 TRR
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reversereview.com
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44444Advertisements and Marketing Materials: TPOs should expect that lenders will periodically request and review all TPO marketing materials. TPOs and lenders must work together to ensure accuracy and effectiveness of mailings, TV/radio announcements and social media efforts in order to protect all parties involved in the transaction, as the lender may face liability for flagrant TPO advertising violations.
Multiple instances of manual data entry and use of disparate systems breed opportunity for errors, plain and simple. One system, the lender’s system of record, used by both the lender and the TPO results in greater data integrity, efficiency and compliance. It also results in greater lender confidence since, when it’s all said and done, the lender is subject to significant risk and bears significant responsibility to ensure that all lending transactions are conducted in a compliant manner and result in a compliant product.
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44Accurate Reflection of Product and Compensation Model: TPOs should have access to broker disclosures, loan commitments and/or financing agreements that accurately reflect the actual compensation model
444Proper Counseling Agencies: Accurate identification of the appropriate approved counseling agencies, including the proper number of agencies required to be disclosed, is absolutely essential. This step is unique to the reverse process and vital to the education of the consumer. Creating an efficient process that streamlines the consumer’s ability to get the appropriate counseling also benefits the TPO and the lender by having the consumer make an educated determination of whether a reverse mortgage is appropriate for them, thereby reducing potential instances of borrower default.
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4Accurate Disclosures: This means not only the ability to create program and material disclosures with accurate information, but a clear understanding of the proper and acceptable fee types, amounts and permissible naming conventions. Lenders and TPOs should both be named on the relevant disclosures to reduce redundant disclosures that are traditionally provided by both the TPO and lender individually. This will ensure clear, accurate and compliant disclosure content for both the TPO and lender. TPOs need to be able to leverage the in-house legal and compliance expertise of lenders to stay ahead of the evolving regulatory landscape.
opportunity to make an informed choice as to the most suitable product for their specific circumstances.
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TPOs should expect the following six features/ services from the lenders with which they work, including:
under which the TPO is paid, and compensation elements as they apply to the specific product.
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And there’s the rub. On one hand, lenders must keep the process simple and efficient for their TPOs to maximize their prospecting time. On the other hand, creating a loan submission process that enforces all of the rules and obligations that the lender is subject to can create an overly complicated and time-consuming process for the TPO, which may eventually scare away the TPOs.
At the end of the day, TPOs crave efficiency and lenders demand control and compliance. Balancing these variables is easily accomplished when TPOs originate from within the lender’s system of record.
originating
of third-party relationships through the use of indemnity agreements with third parties, such agreements do not insulate the institution from its ultimate responsibility to conduct banking-related activities in a safe and sound manner and in compliance with applicable consumer protection laws and regulations, including fair lending laws and regulations (for example, the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act).”
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The Reverse Review February 2013
The Industry is Evolving and So Are We No matter how the industry evolves, Liberty Home Equity Solutions, Inc. is deeply rooted in the values that our company was founded upon nearly a decade ago. We have helped change the lives of over 25,000 senior clients, supported the growth of over 1,000 business partners, and grown to be one of the leading lenders of Home Equity Conversion Mortgages in the U.S. Throughout the years, we have been committed to: • Building better futures for seniors, business partners, and associates • Delivering exceptional customer service with integrity, personal care, and value • Making a difference in the lives of our clients
Let us help you reach your financial goals.
© 2013 Liberty Home Equity Solutions, Inc. 10951 White Rock Road, Suite 200, Rancho Cordova, CA 95670. NMLS # 3313, (800) 218-1415. For a complete list of licenses, visit www.LibertyHomeEquity.com Formerly Genworth Financial Home Equity Access, Inc.
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You Deserve Life, and the Pursuit of...
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To learn about LIBERTY, visit our new company sites: www.LibertyHomeEquity.com www.LibertyHomeEquity.com/partner
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The Reverse Review February 2013
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What’s in Store for 2013? originating
Da rre n S t u m b er g er
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According Another potential concern is volume dropping even further to darren by eliminating the fixed-rate Standard. However, a case can be made that this move may have a negligible effect on industry volume (as measured by number of units).
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We may see the removal of the selection bias (i.e., roughly 95 percent of these pools will comprise typical Standard borrowers), which would suggest a prepayment profile that resembles what we see today with the Standard (slow, stable, predictable).
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Historically, the prepayment profile of Savers has been more volatile than that of Standards due to pool sizes and borrower characteristics. Two themes may factor into how Saver 2.0 pools will price:
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Another potential concern is volume dropping even further by eliminating the fixed-rate Standard. However, a case can be made that this move may have a negligible effect on industry volume (as measured by number of units). Directionally, fixed-rate Standard borrowers will be shifted to the floating-rate Standard and the fixed-rate Saver. Industry reports have indicated that approximately 10 to 15 percent of borrowers claim to “need” all of their available funds upfront, and these borrowers will still be able to utilize the full-draw, floating-rate Standard option. Saver loan-to-value ratios are 15 to 20 percent lower than the Standard and you can expect the origination mix to be more balanced now between the Saver and the Standard.
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H
MBS continues to be well bid in early 2013 with spreads lingering around the tights of 2012. Fixed-rate HMBS trades in the context of 55 to swaps for corporate settle. With the recent announcement of the discontinuation of fixedrate Standard HECMs (for the time being), buy-side account interest has remained strong. Floating-rate HMBS spreads have widened several basis points but are still within striking distance of the tights set in 2012. That said, many market participants want to see how the production mix shakes out once the fixedrate Standard pipeline runs dry. There are thoughts that things will shift to a higher utilized floating-rate Standard and fixed-rate Saver marketplace. Some of the recent widening may be attributed to the prospect of increased supply coming down the road, however, the market for floaters is well defined and relatively mature as there’s been several billion structured into HREMICs since 2009. In December we saw more than $400 million in HREMICs brought to market by Knight and BAML, down from more than $800 million in November.
2
However, some say borrowers who take out a new fixed-rate Saver will be immediately contacted to refinance into the floating-rate Standard. Net-net, pools will trade at a concession to current fixedrate Standard and that level will be determined shortly. x reversereview.com
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The Reverse Review February 2013
spotlight article JOHN K. LUNDE OF REVERSE MARKET INSIGHT talks ABOUT HOW THE
ry februa
ELIMINATION OF THE FIXED-RATE STANDARD WILL IMPACT THE MARKET.
ition
ed
“Fixed rates became the solution for a borrower spooked by adjustable-rate mortgages in the housing crash and part of the answer to increase revenues as loan volume declined. But those answers from the past create more challenges for the industry as the era of fixed-rate HECM Standard ends.”
The latest change coming down the pipeline is the curtailment and potential elimination of the HECM Standard fixed-rate product. This won’t be the death of our industry, but originators will have to adjust in order to continue operating successfully and profitably. Why? The question that people keep asking: Why is the FHA so focused on curtailing or eliminating the fixed-rate HECM Standard product? While I can’t speak for the FHA, my firm does gather industry data that may shed some light on that question. We’re all well aware of this first chart on the next page, which illustrates the rise of fixed-rate reverse mortgages as overall volume declined in the past few years.
Farewell to the Fixed-Rate
Unfortunately, fixed-rate loans became more prevalent just as the industry was starting to face a big T&I default problem. As you can see from the second chart on page 41, fixed-rate loans from 2009 showed T&I default rates only slightly higher than ARM loans. But the picture changed dramatically in 2010, as fixed-rate loans started defaulting at two to four times the rate of ARM loans from the same vintage.
T
The overall default rate for the 2010 vintage rose only slightly from 2009 (and both are at unsustainable levels for the industry regardless), but it was clear that the fixed-rate was displaying significantly worse default rates as time went on.
John K. Lunde
he reverse mortgage industry has weathered many changes in the past few years, evolving from a single secondary market option on ARM loans at one margin rate (CMT 150) to a majority fixed-rate product sold into HMBS pools and then into HREMIC securitizations. Through it all, there have been countless changes to premiums, fees, principal limits, rates and regulatory requirements. New products have been introduced (Saver, Purchase) and new customer segments explored that were nice afterthoughts during the industry’s peak volume years in 2008 and 2009.
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Whether eliminating the fixed-rate product entirely is the right option depends on many factors, but it is very interesting to note that if the T&I default rate is a significant part of that decision process, the HECM for Purchase is one
spotlight article
endorsed
HECM endorsements
fixed-rate share
b y r at e t y p e %
$3,847
$4,593
$5,161
$4,644
$5,511
$6,119
$6,462
$5,283
0
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$ 7 ,6 2 1
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$ 9 ,8 2 8
$ 1 1 ,6 6 1
$ 9 ,8 5 9
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7.5k
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
originating
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appraising legal
T & I D e fa u lt R at e
d e fa u lt r at e t r e n d s %
*
spotlight
14% 12% 10% 8% 6% 4% 2% 0% 0
HECM T&I
2010-fixed 2010-arm
secondary market
2009-fixed 2009-arm
2
4
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The Reverse Review February 2013
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spotlight article category in which default performance is good enough to perhaps make an exception: Vintage
2010
-47%
-45%
With respect to loan volume, it’s very likely that with additional education and counseling to mitigate fears of “payment shock” that largely drive concern about ARM loans in a forward mortgage context, few borrowers would refuse to take an ARM HECM if that is the only option available.
Last but not least, keep in mind that more changes are soon to come through financial assessment and potential T&I set-asides. These changes are more likely to mean increased costs and reduced volumes compared with the fixed-rate changes, so keep an active effort to build HECM Purchase and HECM Saver products for the financial planning segment to stay ahead of the Darwinian curve for our industry. Remember, change is only a scary thing until you realize the alternative is becoming a fossil. x
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*
spotlight
But even if borrower interest in closing a HECM were completely unaffected by an elimination of fixed-rate product options, industry volume is still likely to go down for two other reasons. The first is a reduction in revenue to originators that will reduce marketing
If you haven’t taken advantage of new tools to optimize your marketing, like the additional scoring and filtering information provided by my firm (rminsight.net/retail), now is the time to explore your options for improving lead generation performance.
secondary market
* Fully drawn, fixed-rate HECMs accruing at higher interest rates are more likely to result in an FHA claim (assignment or REO) due to their higher LTV profile.
Now that we’ve identified the likely reasons for action, it’s natural to ask what this might mean for the industry and the other changes that are probably coming. With respect to loan volume, it’s very likely that with additional education and counseling to mitigate fears of “payment shock” that largely drive concern about ARM loans in a forward mortgage context, few borrowers would refuse to take an ARM HECM if that is the only option available.
legal
The default trends above help explain why the FHA might feel the need to curtail or even eliminate the fixed-rate HECM Standard, but there are other potential reasons as well:
What It Means for the Future
appraising
* HECM Purchase borrowers are putting substantial cash into the Purchase transaction, which suggests additional financial resources are available beyond home equity and incents the borrower to protect that initial cash investment as well.
In light of these facts, the conclusion is that the fixed-rate HECM Standard was always going to be changed to address these issues—it was just a matter of time.
For those who buy leads, there may be a silver lining of sorts: Fewer marketing dollars chasing leads could reduce lead prices somewhat as the lower average revenue per loan works its way through the origination ecosphere. I qualified the statement because it’s likely that the reduction in prices comes about only slowly through some attrition of originators who can’t convert efficiently enough at current prices in the reduced-revenueper-loan world—act now to build extra efficiency into your system and avoid being one of the casualties.
tech
* ARM borrowers are less likely to take all of their proceeds upfront at origination, which leaves them with available funds down the road to pay ongoing property charges and avoid default.
Fixed rates became the solution for a borrower spooked by adjustable-rate mortgages in the housing crash and part of the answer to increase revenues as loan volume declined. But those answers from the past create more challenges for the industry as the era of fixed-rate HECM Standard ends.
There is little to be done about a rise in interest rates (I hear the authorities are none too happy about bankers “fixing” benchmark interest rates…), so it makes sense to focus your attention on the second challenge: reducing your marketing cost per funded loan to meet the reinvigorated HECM ARM world head on.
marketing
As you can see from the chart above, seasoned fixed-rate HECM Purchase loans had 45 to 47 percent fewer T&I defaults as of September 9, 2012, than fixed-rate HECMs not identified as Purchase loans. And indeed, each of these trends fit with common sense, too:
budgets around the industry and the second is reduction in principal limits at some point in the future as longterm interest rates rise.
originating
HECM fixed Purchase default rate compared to HECM fixed not identified as Purchase
2009
* Full-draw requirement on these loans means that in many cases, borrowers are taking cash at closing that is not being used to pay closing obligations like mortgage debt—and many are rightfully nervous that this might mean loan funds sitting in a savings account earning 25 bps while accruing 6.25 percent or more in reverse mortgage interest.
The Reverse Review February 2013
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{ the }
underwr ter’s experience
HOW THE DEMANDING ROLe OF THE HECM UNDERWRITER MAKES THIS JOB THE PROFESSION’S GOLD STANDARD ral By
ph rosy nek Jessica guerin &
An astute underwriter is essential to completing any sort of successful loan transaction. These individuals are faced with the weighty task of
reviewing documents that pertain to the borrower and the property in question, and assessing the risk associated with granting a loan. Their evaluation can effectively make or break the entire transaction, which means that an underwriter’s review affects everyone involved in the process, from the borrower to the originator to the lender. 8
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The Reverse Review February 2013
acc
to ralphording & Jessica While any kind of underwriting can be a taxing pursuit, the job of a HECM underwriter is a particularly challenging one, requiring acute knowledge of stringent FHA standards and adherence to a specific methodology unique to the reverse mortgage loan process. HECM underwriters are specially trained to handle these kinds of governmentinsured loans, and a substantial amount of experience is required to develop a true command of the process. Pending and future changes to the FHA’s HECM program promise to complicate the underwriter’s task. The implementation of a financial assessment rule and the establishment of escrow reserves for taxes and insurance are immediate concerns that will certainly impact their work. As the guidelines for FHA-insured loans continue to evolve, it is essential that HECM underwriters stay abreast of shifting requirements, and as a result,
A Direct Endorsement (DE) underwriter, which is the classification required to handle HECM loans, reviews and certifies mortgage loan documents to ensure compliance with the requirements of the FHA’s mortgage insurance program.
the job demands continuous training and education for underwriters to remain compliant. Because the underwriter’s work is so impactful, it’s important that everyone involved in the reverse mortgage loan process understands this experience so that the entire team can work together efficiently to serve senior borrowers. Becoming a DE Underwriter A Direct Endorsement (DE) underwriter, which is the classification required to handle HECM loans, reviews and certifies mortgage loan documents to ensure compliance with the requirements of the FHA’s
mortgage insurance program. Nowadays, the process of certifying a DE underwriter varies by lender; the FHA no longer enforces minimum education or skill-set requirements in order for an individual to qualify for DE certification. In the past, HUD oversaw an official application and credential process, but a 1996 Mortgagee Letter put an end to this system and transferred the responsibility to the lender. Since then, lenders have been permitted to implement their own requirements for DE designation based on their concept of the proper skills
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UNDERWRITER INSIGHT
(
s.Apanay
(
AAG
Urban Financial Group “One of the best talent pools is the processors. If you can find ones who think like underwriters, then you are golden.” Apanay recommends that lead underwriters pay careful attention to their processing staff. “Good processors are your company’s future underwriters,” she says, “so evaluate them closely.”
r.perry
“Many may think that underwriting a HECM loan is a piece of cake because there are no financial documents or credit reports to review. But it is exactly for those reasons that a HECM loan is more difficult. When reviewing our collateral, it’s imperative that we are spot-on...”
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Urban Financial Group “The role of the underwriter is to be calm and evaluative, assessing risks and making riskbased decisions while providing good customer service and a smooth underwriting process for the client. The consistently changing industry requires underwriting professionals to keep up with new underwriting guidelines on an ongoing basis.”
and experience needed to meet the demands of the job. Most companies train their underwriters internally, pulling from a pool of experienced processors whose grasp of the HECM product and familiarity with its required documentation make them excellent candidates.
sector, expanding their professional expertise to include FHA loans and therefore making themselves more marketable in a challenging job environment. But industry veterans warn that this transition comes with a sharp learning curve because of the complexities involved in HECM loans.
Urban Financial Group is among several leading lenders that follow this model. According to Sherry Apanay, the company’s managing director and head of sales, cultivating talented loan processors is the most effective way to build a solid team of underwriters. “Being able to ‘home grow’ your underwriters is critical to success,” Apanay says. “One of the best talent pools is the processors. If you can find ones who think like underwriters, then you are golden.” Apanay recommends that lead underwriters pay careful attention to their processing staff. “Good processors are your company’s future underwriters,” she says, “so evaluate them closely.”
Brenda Phillips, the process and underwriting manager at RMS, says underwriters who make this transition need to acquire “an understanding of the different guidelines between a forward mortgage and a HECM, as well as an understanding of the guidelines that impact both.” Still, Phillips admits it’s a difficult transition, even if one has a grasp on both requirements. “Being able to mitigate between the two is the challenge,” she says. Because the differences between forward and reverse are so great, some lenders say they prefer to hire promising individuals without forward experience or train loan processors internally in order to avoid dealing with someone who may struggle
There are also some underwriters who have transferred from the forward
(
b.luth
r.Rosynek RMS
“Pending and future changes to the FHA’s HECM program promise to complicate the underwriter’s task. The implementation of a financial assessment rule and the establishment of escrow reserves for taxes and insurance are immediate concerns that will certainly impact their work.”
to break habits learned in forward lending. Some say the profession might have been impacted by the exit of big banks from the reverse space. Once major entities in the sector, MetLife, Wells Fargo and Bank of America pumped their substantial resources into training large pools of HECM underwriters, setting the standard for quality and education within the industry. But when these big banks closed down their reverse operations, the industry lost a major training ground. Others, however, claim that the absence of big banks isn’t a concern and that the impact of their exit was marginal, as midsized lenders continue to successfully train their own underwriting staff. For many lenders, this process of training and certifying an underwriter involves a timeline of set benchmarks and promotions. According to Robyn Perry, underwriting manager at AAG, an individual on this track must be a part of the team for a minimum of six months before he or she can be 8 reversereview.com
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The Reverse Review February 2013
by the loan’s processor, who gathers promoted, often from a loan processor information and third-party reports position, to junior underwriter. This to create a clear picture of compliance person would then move through and risk for the underwriter’s review three stages of promotions based and evaluation. If the processor’s on merit, from DE 1 to DE 2 before work is thorough, attaining the the underwriter company’s highest should merely act as a DE 3 designation. rubber stamp of sorts, Perry says her team approaching the file will grow to 17 from a compliance underwriters by next “Most companies train and risk-mitigation week, and that the their underwriters perspective. company’s system internally, pulling from has been extremely a pool of experienced Some veteran effective in managing underwriters claim processors whose grasp and training her their work can be of the HECM product team. “It’s working misunderstood by out so well,” Perry and familiarity with its loan officers and says. “We’re lucky required documentation by management, we have sufficient make them excellent who might view the staff to support such candidates.” underwriting team as a project.” the “loan prevention department.” Others, Regardless of however, maintain that it depends the lender’s specific process, once largely on where you work. Perry says an underwriter receives internal her experience at AAG is quite the certification they must submit their opposite. “Some might say, ‘We don’t personal information to the FHA’s care what you think, we want you to Underwriting Registry and undergo prove that file,’” Perry says. “But our a check for federal debt through management has the highest regard the Credit Alert Interactive Voice for my opinion and the opinion of my Response System (CAIVRS). They are underwriters.” then issued an official underwriter identification number, which remains Still, Phillips acknowledges that as proof of certification throughout underwriters are in a unique position their tenure in the profession, and that this does require some regardless of their current employer. delicacy. “No doubt there is balance between supporting sales and The Work of a HECM Underwriter mitigating any potential future risk, An underwriter’s primary goal is but it’s an underwriter’s job to find to set the value of the property in that balance.” question and assess the risk involved To be sure, the job does come with for both the lender and the fund. its own unique complexities. They This evaluation and review requires conduct what some might call “oldsubstantial documentation and is an school” underwriting, meaning that essential component of the FHA’s this particular type of assessment HECM loan insurance process. The is reflective of practices that existed ability to coordinate guidelines, prior to the creation and use of AI mortgagee letters, agency guidance, underwriting engines. Rather than industry risk resources and lender relying on advanced technology, overlays is the foundation of a wellDE underwriters must process seasoned underwriter. the file manually with only minor In effect, a large portion of the technological assistance to aid in the initial work should be completed completion of their review. 48
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Partly because of this technology factor, some point out that contrary to what many in the marketplace seem to believe, a DE underwriter who handles other types of FHA loans is not necessarily qualified to underwrite HECM loans. “Many may think that underwriting a HECM loan is a piece of cake because there are no financial documents or credit reports to review,” Perry says. “But it is exactly for those reasons that a HECM loan is more difficult. When reviewing our collateral, it’s imperative that we are spot-on. We don’t have payment history, cash saved or employment history to use as compensating factors. Our investors rely on us to be the best when it comes to appraisal review.” The Importance of Continued Education Because of the evolving nature of HECM guidelines, a major part of the underwriter’s job is continued education. Britany Luth, vice president of operations for Urban Financial Group, stressed the importance of keeping up. “The consistently changing industry requires underwriting professionals to keep up with new underwriting guidelines on an ongoing basis,” Luth says. Jennifer Wood, assistant vice president at Urban Financial Group and the underwriting team lead, agrees. “Training underwriters is an ongoing practice due to the ever-changing industry.” As a result, many lenders have developed systems for their underwriting teams to support this need, providing educational materials, hosting regular training sessions and establishing mentorships to help guide those newer to the profession. Wood says her team at Urban is given an array of tools to help them stay abreast of new rules and regulations. “This is a challenging job and it’s essential to have the team prepared for changes and trends,” she says. “As part of the ongoing training for our underwriters,
we encourage them to attend different HUD trainings, we provide educational reference materials, and one-on-one mentoring is essential. Since every file is unique, training the underwriters is not just a short-term process but something we provide throughout their career.”
“An underwriter’s primary goal is to set the value of the property in question and assess the risk involved for both the lender and the fund. This evaluation and review requires substantial documentation and is an essential component of the FHA’s HECM loan insurance process. The ability to coordinate guidelines, mortgagee letters, agency guidance, industry risk resources and lender overlays is the foundation of a well-seasoned underwriter.”
The Gold Standard DE underwriters with solid HECM experience are highly marketable. Their expertise makes them what some call the gold standard of underwriters, and this esteemed position can come with a higher salary and a bit of seniority over standard DEs. But despite this status, some industry experts, like RMS Senior Vice President Elly Johnson, point out a notable shortage in experienced personnel. “There appears to be a shortage of HECM underwriters and, I believe, of underwriters in general,” Johnson says. “It seems that when the market
turned a few years back, many underwriters decided on a career change or retirement. I have spoken to many possible candidates who just decided to exit the market.” While HECM volume has waned in recent months, industry analysts predict a significant uptick in the coming years as the boomer generation continues to age. If the marketplace were to experience a drastic increase in HECM origination, some worry that a lack of qualified underwriters would be a strain on growth. Lenders would be under pressure to quickly beef up
staff, either by hiring externally or training staff from within. With this in mind, lenders would be wise to carefully cultivate their underwriting staff and acknowledge the important work these dedicated individuals do. Their constant need to stay on top of evolving industry guidelines and portfolio trends makes their job a demanding one, and the quality of their work impacts everyone involved in the reverse mortgage loan process. x
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The Reverse Review February 2013
reflect
last word
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With a Little Help From My Friends Joh n L a R o s e
T
his column appears in February, but it’s being written while my wife and I are in the process of putting away the holiday decorations. (Tara is a master organizer and boxing up holiday decorations is a piece of cake!) While the decorations are coming down, I find myself mentally packing away the events of the past year. Figuratively packing away 2012 is proving to be a far more formidable task! The festivities of the new year tend to make me nostalgic. Please indulge a few moments of reflection. I was a young adult in the ’60s and these days I find myself regularly singing the refrain from The Beatles’ “With a Little Help From My Friends.” I am reminded daily, and especially at the holidays, how very much I rely on family and friends for my personal and professional well-being. In my role as a husband and CEO, my wife, Tara, has provided invaluable love, support and guidance. As a father, my children have blessed me with their professional and personal successes, and they have expanded my role to include being “Poppy” to their beautiful offspring, my grandchildren. As a business owner, countless people have supported my vision and efforts over the years, and they are too numerous to mention here. All of this nostalgia brings me to the present moment and the process, as CEO of Celink, of closing out 2012 and looking ahead to 2013. I came into the reverse mortgage industry at the invitation of Peter Bell to attend the NRMLA conference in April 2004. While there I was introduced to some industry founders and giants who remain friends to this day. I came away from that experience believing that this is the industry I was meant to be in and felt deeply impressed with the exceptional concern its members carried for borrowers and each other. Whenever I am a little down, I wander around our Borrower Care call center and take in the conversations of my staff helping seniors all day long. I’ve said it before and I’ll say it again: Reverse mortgage servicing has always felt less like a professional path and more like a calling.
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According to john It’s still early in the year so let’s make this resolution: Let’s come together as an industry, under our NRMLA membership, and commit to doing the right thing, at the right time and for the right reason.
For the past few years our industry has felt as volatile as nitroglycerine. This past year was especially trying. It’s a big task to sort through the many lessons learned and to discard all the broken or nonworking pieces. There’s a war on all things “mortgage” and make no mistake: Our industry has been, and will continue to be, under attack. In the final weeks of 2012, NRMLA’s political advocacy team initiated dialogue with Sen. John Corker (R-TN) and Sen. Robert Menendez (D-NJ); spoke with the producer of a story criticizing reverse mortgages on World News With Diane Sawyer; and wrote a strong industry response to a Wall Street Journal editorial questioning government support for the HECM program. All too often some in our industry engage in “friendly fire,” defined as confusing ourselves with the enemy and shooting at each other. It’s still early in the year so let’s make this resolution: Let’s come together as an industry, under our NRMLA membership, and commit to doing the right thing, at the right time and for the right reason. I came into the reverse mortgage industry through invitation from NRMLA and today, at the beginning of yet another year of uncertainty and challenge, I credit NRMLA advocacy and membership as one of the primary reasons I will optimistically stay. We will all get by with a little help from our friends. x
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The Reverse Review February 2013
REVERSEVISION
We handle more reverse mortgages than all other systems combined. Do you know why?
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