The Reverse Review February 2017 by The Reverse Review

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FEBR UARY 2 0 1 7

CONNECTION

STRATEGY

Have industry-wide efforts to reach the advisor community been successful?

H O T S EAT

ORIG INAT ING

TECH

TITLE TIP

PG. 15

PG. 16

PG. 21

PG. 23

Joshua Shein sits down in our Hot Seat

The key to learning and development

An old-school approach to new originations

Tax history requirements

review

OUTREACH

REVERSE

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INSIDE THIS ISSUE | HECMs AND THE NEW ADMINISTRATION: A WHOâ&#x20AC;&#x2122;S WHO

The Reverse Review February 2017

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8 TRR | 3

The Reverse Review February 2017

From the editor RE

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REVERSE

A NOTE FROM JESSICA GUERIN

THE

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INSIDE THIS ISSUE | HECMs AND THE NEW ADMINISTRATION: A WHO’S WHO

For the last several years, the conversation

review

FEB R UARY 2017

among reverse professionals has largely centered on how we can better connect with financial advisors to promote the HECM.

CONNECTION

Lenders have established financial planning STRATEGY

OUTREACH

channels whose sole mission is to target this demographic. NRMLA conferences have featured panel discussions and expert presentations designed to help members learn

Have industry-wide efforts to reach the advisor community been successful?

how to establish connections. And everyone,

HOT SEAT

ORIGINATING

TECH

T IT L E T IP

PG. 15

PG. 16

PG. 21

PG. 23

Joshua Shein sits down in our Hot Seat

The key to learning and development

An old-school approach to new originations

Tax history requirements

it seems, is hosting webinars on the topic. With so much energy focused in this direction, it seems wise to take a step back

Meet the Team SENIOR PUBLISHER

Reza Jahangiri PUBLISHER

Erik Richard EDITOR-IN-CHIEF

Jessica Guerin

CREATIVE DIRECTOR

Traci Knight

COPY EDITOR

Kersten Deck MARKETING DIRECTOR

Alycia Greer

and assess whether it’s made a difference. Has FEBRUARY 2017

ON THE COVER We take a look at the industry’s mission to connect with financial planners.

this collective push helped move the needle at all? In this issue of TRR, we talk to financial planning experts and industry leaders to find out. We’re also interested to hear what you have to say. What are you doing to connect with financial advisors in our area? Have you met with any success? Do you think the industry has made a difference? Reach out to us and share your stories and ideas. By participating in the conversation, you can take an active role in fulfilling the industry’s mission.

Connect with me about how you can participate. Reach me at jessica@reversereview.com

GET THE LATEST ISSUE DELIVERED DIRECTLY TO YOUR INBOX

Feedback

4 | TRR

Advertising Information phone : 630.207.3882 email : jessica@reversereview.com Subscriptions email : information@reversereview.com Editorial Content email : jessica@reversereview.com © 2016 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 articles and advertisements 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.

JESSICA GUERIN

Feedback is very important to us here at The Reverse Review. Send us your thoughts on this issue or comment online for a chance to see your perspective in print.

Printer The Ovid Bell Press

FIND US ON FACEBOOK AND LINKEDIN

READERS respond

PAST ISSUES OF TRR INSPIRED LOTS OF CONVERSATION ON THE WEB.

Here’s what our readers had to say: Do you have something to say?

www.reversereview.com 8

June 2016 Nobel Prize-Winning Economist Robert Merton By Jessica Guerin

Around the

world in Reverse A look at international home equity conversion

"The Robert Merton article in The Reverse Review was excellent. I teach a three-hour continuing education class to Realtors in New Mexico, in which I often discuss some of the ideas highlighted in the article. Having someone of Dr. Merton’s stature clearly identifying why this program is so important was a real 'eye opener' for many of the Realtors. Robert Merton could be a key figure in opening up an entirely different conversation about reverse mortgages.” –Anonymous

“I read the magazine every month and it is very helpful with my business. Having someone with Robert Merton’s credentials is extremely supportive and gives great credibility when discussing the benefits of a reverse mortgage with potential referral partners.” –Michael Reddy “Your article on Robert Merton in the June issue of The Reverse Review was the best. Those of us in the reverse industry for many years have struggled with the stigma of our program in the past. I have sent this article on Robert Merton to three financial advisors for their review and it gave me instant credibility with three appointments. Yah ha!" –John Walters RE

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–Shelley Nelson

REVERSE

STRATEGY

THE

THE H4P

“Great article! I just did a presentation last week at a real estate office here in town and nearly all of the Realtors were surprised to hear about this program. The H4P has been around since 2009—why is it taking Realtors so long to get on board?”

November 2016 By Kent Kopen

–Carlos Camargo

VERSE R EV E RE

That's a really nice article, Dan. Great to see all of the variations of the HECM program around the world, and I like South Korea's naming their Equity Release program a 'Housing Pension.'

INSIDE THIS ISSUE | KNOWING OUR PRODUCT AND SELLING IT RIGHT

July 2016 Around the World in Reverse By Dan Hultquist

review

NOVE MBE R 2 0 1 6

HOT SEAT

ORIGINATING

PG. 17

PG. 18

Sherry Pauline sits down in our Hot Seat

How to close loans better and faster

LEGA L

Partnering with financial planners PG. 24

LA ST WORD

Considering ethics PG. 34

This has been one of my pet peeves since I was an escrow officer in the ’80s, and it has only gotten worse. Some thoughtful folks have actually made the effort to have a few forms consolidated into one, only to have compliance still require the

November 2016 Sign, Sign and Sign Again By Bill Smith original individual disclosures AND the new combined disclosure. I asked about this back in 2008 and was told that even investors who purchase the loans have requirements as to what documents they need, therefore the lenders, in order to make the loan marketable to said investors, are diligent to have each investor's preference for

disclosures included in the loan packet. I am certainly limited in my knowledge of the whole lending/ investing/servicing world, but this did make sense to me in an ‘Oh! I give up’ sort of way. The volume of documentation/ disclosures does little if anything to actually protect the borrowers. It's truly ridiculous.” –Deborah Nance

reversereview . com

8 TRR | 5

The Reverse Review February 2017

table of contents 08 / STATS

21 / TECH

21 24

December top lenders and HECM endorsement stats through November

Increasing Your Sales with CRM Technology

REVERSE MARKET INSIGHT

How these automated systems can simplify your day

10 / NRMLA NEWS

TRR 2/17

MARC MONTGOMERY

Read about the association’s current initiatives.

23 / TITLE TIP

Tax History Requirements

13 / ROUNDUP A collection of recent facts and surveys affecting the reverse market

15 / HOT SEAT

How title insurance companies can help originators gather information MARK KING

24 / SPOTLIGHT

Joshua Shein

Senior director at Home Point Financial

16 / ORIGINATING

HECMs and the New Administration: A Who’s Who How these new players may influence housing policy SCOTT NORMAN

The Key to Learning and Development Five tips to keep your team on track toward growth and success LORRAINE GERACI

30 / LAST WORD

Compassionate Pragmatism

The new administration and why it must recognize the value of the HECM SHANNON HICKS

18 / ORIGINATING Stop the Machine

Taking an old-school approach to new originations BRAD BENNETT

FEATURE

26 / FEATURE

YOU CAN DO IT!

The Financial Planning Mission Have industry-wide efforts to reach the advisor community been successful? JESSICA GUERIN

REACH OUT TO US ABOUT WRITING FOR TRR. INFO@REVERSEREVIEW.COM

"With so much of the industry’s collective energy focused on this mission, the success of which many have called crucial to the product’s longterm viability, one might naturally wonder how much headway we have actually made. Are we any closer than we were four years ago to getting the financial community to embrace reverse mortgages as something much more than an option of last resort?

6 | TRR

contributors

John K. Lunde

Joshua Shein

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

With more than 16 years of industry experience leading Top 10 reverse lenders, Joshua Shein is a seasoned reverse mortgage leader. Shein is frequently called upon by national and trade news media to provide insight regarding mortgage industry trends and legislation, and has repeatedly been selected for the “Hot 100” list by Mortgage Professional America. Currently, Shein is a senior director at Home Point Financial. Previously, he was responsible for developing and growing Maverick Funding’s Reverse Mortgage Platform.

Marc Montgomery

Mark King

8 | Stats g

21 | Increasing Your Sales with CRM Technology g Marc Montgomery has 40 years of sales experience. From the very beginning, he has embraced the technology offered by computers and the Internet. In 2008 Montgomery started BusinessETouch, where he built an easy-touse CRM system that included all the features he found lacking in the mega CRM companies. The National Association of Mortgage Brokers recommends BusinessETouch.

15 | Hot Seat g

23 | Tax History Requirements g Mark King is a senior vice president at PRC. Since joining the company in 2008, King has worked in numerous roles assisting in PRC’s day-to-day operations. Before transitioning into title and escrow in 1991 with North American Title, King worked as a legal assistant specializing in legal malpractice and real estate law.

Lorraine Geraci

16 | The Key to Learning and Development g Lorraine Geraci is VP of learning and development at Finance of America Reverse, where she oversees all wholesale training, training technology and technical writing. She has more than 12 years of experience in the reverse industry and 20 years of experience in training, coaching and customer service. Formerly a topproducing originator, Geraci has trained more than 1,000 HECM LOs nationwide in classroom and webinar settings. A certified professional coach, she is the author of Living a Rock Star Life.

Scott Norman

24 | HECMs and the New Administration: A Who’s Who g Scott Norman has led all five campaigns to amend the Texas Constitution to allow, expand and promote reverse mortgages. Since he founded the Texas Association of Reverse Mortgage Lenders in 1999, he has testified numerous times before the Texas Legislature and has worked with lawmakers in other states. Norman has also served as president of the Texas MBA and the Austin MBA. He is currently the national field retail vice president of Finance of America Reverse.

Brad Bennett 18 | Stop the Machine g

LOOKING TO CONNECT WITH THE REVERSE COMMUNITY?

Brad Bennett is manager of reverse mortgage operations for GSF Mortgage Corporation. He is responsible for providing the tools and support necessary for the division to quickly and efficiently close reverse mortgage loans. Bennett’s natural talent in sales and leadership, as well as his entrepreneurial spirit, led him to the mortgage industry in 2007.

Shannon Hicks

30 | Compassionate Pragmatism g Shannon Hicks serves as president of Reverse Focus (formerly Reverse Fortunes), a training and technology company for the reverse mortgage industry. Hicks was instrumental in the development of the first national reverse-specific CRM and produced the e-learning course interface for Reverse Basics, an e-learning tool for the industry. He also hosts a weekly podcast, “Reverse Focus Weekly,” in addition to two weekly videos: the “Industry Leader Update” and “Friday’s Food for Thought.”

ADVERTISE IN THE REVERSE REVIEW!

REACH A NATIONAL AUDIENCE OF RM PROFESSIONALS. CONTACT US FOR MORE INFORMATION. info@reversereview.com

reversereview . com

8 TRR | 7

The Reverse Review February 2017

stats

December 2016 Top Lenders Report

12345 American Advisors Group

Reverse Mortgage Funding

Finance of America Reverse

One Reverse Mortgage

Synergy One Lending

Endorsements

1,014

469

357

294

225

Lender Endorsements LIBERTY HOME EQUITY SOLUTIONS INC

213

Lender Endorsements

RMS/SECURITY ONE LENDING

165

BROKER SOLUTIONS INC

LIVE WELL FINANCIAL INC

138

COMMUNITY FIRST NATIONAL BANK

HIGHTECHLENDING INC

116

NOVA FINANCIAL & INVESTMENTS CORP

NATIONWIDE EQUITIES CORPORATION

104

PACIFIC RESIDENTIAL MORTGAGE LLC

REVERSE MORTGAGESCOM INC

TOWNEBANK

FAIRWAY INDEPENDENT MORTGAGE CORP

MORTGAGE BROKERS SERVICES

OPEN MORTGAGE LLC

MORTGAGESHOP LLC

FIRSTBANK

LAND-HOME FINANCIAL SERVICES

RESOLUTE BANK

GEORGETOWN MORTGAGE

HOME POINT FINANCIAL CORPORATION

GOLDWATER BANK

ADVISORS MORTGAGE GROUP LLC

ALPHA MORTGAGE CORPORATION

ALL REVERSE MORTGAGE INC

WILLOW BEND MORTGAGE CO

CHERRY CREEK MORTGAGE CO INC

TOTAL MEDIA MANAGEMENT LLC

LONGBRIDGE FINANCIAL LLC

VIP MORTGAGE INC

AMERICAN PACIFIC MORTGAGE

RESIDENTIAL HOME FUNDING CORP

MCM HOLDINGS INC

SUN AMERICAN MORTGAGE CO

10 9

SUCCESS MORTGAGE PARTNERS INC

UNITED NORTHERN MORTGAGE BANKERS

YADKIN VALLEY BANK AND TRUST

THE FEDERAL SAVINGS BANK

AMERICAN NATIONWIDE MORTGAGE COMPANY 7

PLAZA HOME MORTGAGE INC

MANN MORTGAGE LLC

SUN WEST MORTGAGE CO INC

INTERCONTINENTAL CAPITAL GROUP

PEOPLES BANK

MCS MORTGAGE BANKERS INC

M & T BANK

NATIONS LENDING CORP

BANC OF CALIFORNIA

MEADOWBROOK FINANCIAL MORTGAGE

UNIVERSAL LENDING CORPORATION

WHOLESALE CAPITAL CORP

THE MONEY SOURCE INC

SIMONICH CORPORATION

BANK OF ENGLAND

PRIMARY RESIDENTIAL MORTGAGE INC

MONEY HOUSE INC

ON Q FINANCIAL INC

QUONTIC BANK FSB

UNITED MORTGAGE CORP

EVOLVE BANK & TRUST

NORTHERN OHIO INVESTMENT CO

NORWICH COMMERCIAL GROUP

HOMEBRIDGE FINANCIAL SERVICES INC 8 | TRR

stats

HECM Endorsement Stats Through November 2016 { FIGURE }

PURCHASE

$1,200

REFI STANDARD

$800 $600 $400 $200

{ FIGURE }

10/1/16

9/1/16

8/1/16

7/1/16

6/1/16

5/1/16

4/1/16

3/1/16

2/1/16

1/1/16

12/1/15

$0 11/1/15

DOLLARS IN MILLIONS

HECM ENDORSEMENT INITIAL PRINCIPAL LIMITS

$1,000

HECM ORIGINATORS (FHA & NON-FHA)

INDUSTRY SUMMARY

TRAILING TWELVE MONTH ENDORSEMENTS 5,000

3,000

2,524

Retail Endorsement Growth

Wholesale Endorsement Growth

3.65%

2,000 1,000

Total Endorsement Growth

12 1 2 3 4 5 6 7 8 9 10 11 Retail

MO.

-4.26%

4,000

INDUSTRY SUMMARY

Wholesale *Numbers Represent Months

-0.72%

* Figures Above Reflect Change from Prior Month

RETAIL UNITS CHG%

2.31%

WHOLESALE UNITS CHG%

TOTAL UNITS CHG%

9.79%

4,229

5.2%

2,199 -12.88%

1,690 -0.88%

3,889

-8.04%

2,645 20.28%

1,932 14.32%

4,577 17.69%

2,669

0.91%

1,857 -3.88%

4,526

-1.11%

2,465

-7.64%

1,775 -4.42%

4,240

-6.32%

2,034 -17.48%

1,605 -9.58%

3,639 -14.17%

2,190

7.67%

1,573 -1.99%

3,763

3.41%

2,033

-7.17%

1,497 -4.83%

3,530

-6.19%

2,440 20.02%

1,938 29.46%

4,378 24.02%

2,219

-9.06%

1,519 -21.62%

3,738 -14.62%

2,159

-2.7%

1,753

15.4%

3,912

4.65%

2,067

-4.26%

1,817

3.65%

3,884

-0.72%

TOT

27,644

1,705

20,661

48,305

%%%%% LOOKING FOR MORE STATISTICS? Go to rmsinsight.net for all of the industryâ&#x20AC;&#x2122;s latest stats and rankings. Brought to you by Reverse Market Insight reversereview . com

8 TRR | 9

The Reverse Review February 2017

nrmla news BROUGHT TO YOU BY NRMLA STAFF

what is HUD doing in the meantime?

S AV E T H E S E D AT E S : 2017 CONFERENCE SCHEDULE NRMLA’s conferences offer an excellent opportunity for members to stay abreast of important issues and trends, earn continuing education credits, network with colleagues and meet with business partners.

Start planning your year around these dates: Eastern Regional Meeting & Expo. April 3-4, InterContinental New York Times Square, New York Western Regional Meeting & Expo. May 16-17, Hyatt Regency Huntington Beach Resort and Spa, Huntington Beach, California Annual Meeting & Expo. November 13-15, The Palace Hotel, San Francisco, California

Where Did the Proposed Rules Go? Last year, NRMLA commented on three proposed rules published by HUD: one that would make further changes to the HECM program; a supplement to that proposal that would require mandatory assignments of HECM reverse mortgages at 98 percent of the maximum claim amount; and another that would modernize the department’s condo approval and recertification rules. The comment periods are closed and now we await publication of the final rules. But when will they be published and

The presidential transition and change in administrations creates some uncertainty about the timelines for publication. It could take time for the new staff and leadership to review their contents before moving forward to finalize them. The federal rulemaking process requires HUD to review and assess all public comments before drafting its final rule. According to the Office of the Federal Register’s Guide to the Rulemaking Process, at the end of the comment review, the agency must base its reasoning and conclusions on the rulemaking record, consisting of the comments, scientific data, expert opinions and facts accumulated during the pre-rule and proposed rule stages.

Prepared by RiskSpan, Inc. 10 | TRR

THIS ARTICLE ON

NRMLAONLINE.ORG.

Before the final rule can be published, it must

SENIOR HOME EQUITY REACHED $6.1 TRILLION IN Q3 2016

Data sources: American Community Survey, Census, FHFA, Federal Reserve Z.1 Release

be reviewed by the Office of Management and Budget, which prepares a final analysis of estimated costs and benefits that may take into consideration any comments and alternate solutions suggested in public comments. Agencies may also use this review and analysis phase to consult with other agencies that share responsibility for issues covered by the rule, such as the CFPB. NRMLA will continue to monitor the progress of the rulemaking and share updates as they become available. If you’d like to read NRMLA’s comments in their entirety, or learn more about the federal rulemaking process,

Equity held by homeowners aged 62 and older increased $152 billion, or 2.6 percent, in the third quarter of 2016, bringing the total to $6.1 trillion. The gains, largely driven by a 2.3 percent increase in home values, pushed the NRMLA/ RiskSpan Reverse Mortgage Market Index (RMMI) up to 217.34, another all-time high since the quarterly index was first published in 2000. “The upward trajectory of the RMMI tells us that housing wealth continues to provide senior homeowners with a financial resource they can use to support their needs during their retirement years when income is dependent on Social Security, investment assets and pensions,” says NRMLA President and CEO Peter Bell. “The positive trend is also reassuring for homeowners nearing retirement age who are less likely than their predecessors to leave the workplace with a defined benefit plan and also more likely to have long-term debt.”

nrmla news D E M A R K E Y, J A H A N G I R I R E ELECTED CO-CHAIRS OF NRMLA The Board of Directors re-elected Joe DeMarkey of Reverse Mortgage Funding LLC and Reza Jahangiri of American Advisors Group to serve as co-chairs of NRMLA from now until the 2017 Annual Meeting. DeMarkey is the strategic business development leader at Reverse Mortgage Funding. He is also responsible for government and industry relations. DeMarkey has served on the Board of Directors since 2003 and as co-chairman since October 2011. Jahangiri is the founder and CEO of American Advisors Group. He has served on the Board of Directors since 2012 and as co-chairman since November 2014.

In addition to DeMarkey and Jahangiri, NRMLA congratulates the following elected officers to the executive committee: l Sherry Apanay Finance of America Reverse Vice Chair l Mark Browning HomeChex Vice Chair l Jason McNamara Celink Treasurer l Mike Kent Liberty Home Equity Solutions Secretary

Directors John Button ReverseVision

Michael Hild LiveWell Financial

San Diego, California

Richmond, Virginia

J im Cory, CRMP LiveWell Financial

hris Mayer C Longbridge Financial, Inc.

San Diego, California

Mahwah, New Jersey

George Downey, CRMP Harbor Mortgage Solutions l

Braintree, Massachusetts

ichael McCully M New View Advisors l

New York, New York

Kristen Sieffert Finance of America Reverse

Orange, California

Tulsa, Oklahoma

aul Fiore P American Advisors Group Leslie Flynne Reverse Mortgage Solutions l

Houston, Texas

Rick Gilmartin Nationstar

obert Sivori R Reverse Mortgage Funding l

Bloomfield, New Jersey

Gregg Smith One Reverse Mortgage

Lewisville, Texas

San Diego, California

ichael Gruley, CRMP M 1st Nations Reverse Mortgage l

Ann Arbor, Michigan

atty Wills, CRMP P Open Mortgage

Rockville, Maryland

NRMLA Presents Webinar to ASA Members On December 9, NRMLA hosted “Women and Retirement Security: Challenges and Solutions,” a free webinar for members of the American Society on Aging that was also open to the public. The hourlong presentation featured three distinguished speakers who identified the leading drivers of retirement insecurity among women and discussed financial options women should consider, including using a reverse mortgage to supplement retirement savings. Lara Hinz of the Women’s Institute for a Secure Retirement LARA E. HINZ, DIRECTOR OF (WISER) PROGRAMS AT W I S E R discussed the drivers of women’s retirement insecurity and steps women can take to prepare for unexpected financial events, such as health emergencies, divorce and widowhood. Jocelyn D. Wright, MBA, CFP, the State Farm Chair in Women and Financial Services and Assistant Professor of Women’s Studies at The American College of Financial Services, talked about the importance of building women’s confidence in financial decision-making and times when it makes sense to meet with an advisor. And Lorraine Geraci, an instructor and member of NRMLA’s Education Committee, explained strategies and tools, including reverse mortgages, available to older homeowners seeking to convert a portion of their housing wealth into a liquid asset that can supplement savings.

NRMLA CONGRATULATES

The following individuals have achieved the status of Certified Reverse Mortgage Professional (CRMP).

4 Kurt Kessler thereversemortgagecompany.com

San Ramon, California

4 Jill Gromm Alliance Reverse Mortgage Santa Rosa, California

4 John Leer KleinBank Victoria, Minnesota

Thank you FOR JOINING

NRMLA WELCOMES OUR NEWEST MEMBERS 4 1st Legacy Capital LLC Columbus, MS 4 Baseline Reverse St. Johns, Florida 4 Kaye Financial Corporation West Bloomfield, Michigan 4 Madison Paige Capital LLC New York 4 Traditional Mortgage Acceptance Corporation Bellevue, Washington

reversereview . com

8 TRR | 11

The Reverse Review February 2017

Discover the nation’s #1 reverse mortgage lender American Advisors Group makes it easy to grow your business with unbeatable lender support!

Our Focus is Your Borrower!

Lender Support with dedicated industry experts that have a wealth of reverse mortgage product and systems knowledge makes growing your business easy!

CALL TODAY to find out how easy it is to get started! 866-964-1109 or visit AAG.com/Wholesale

American Advisors Group, NMLS #9392, headquartered at 3800 W. Chapman Ave., 3rd & 7th floors, Orange, CA 92868. For industry professionals only – not intended for distribution to the general public. This material is not from HUD or the FHA and were not approved by HUD or a government agency. License information can be viewed on: http://www.nmlsconsumeraccess.org www.nmlsconsumeraccess.org or http://www.aag.com/disclosure 12 | TRR

NMLS #9392

THIS MONTH

HEALTH CARE FACTS

A LOOK AT THE NEWS AND STATS AFFECTING THE MARKET

By 2030, Medicare will have nearly 81 million beneficiaries.

GET UP-TO-DATE retirement facts, home price stats, senior trends and HECM market developments in The Reverse Review’s monthly Roundup.

NOTED & QUOTED “The United States is in the midst of a profound demographic transformation the likes of which we have never seen before. The nation is collectively growing older. Millions of Americans are also living further into their senior years without suffering from a debilitating disease, enjoying what experts call a ‘longevity dividend,’ the propitious result of better nutrition, technological advancements, and safety improvements. -Bipartisan Policy Center report, “Healthy Aging Begins at Home”

in 2015

$642 billion in 2026

The Congressional Budget Office projections for Medicaid costs

THE SENIOR AGENDA Boomers Moving Plan

$350 billion

Upsizing & Downsizing

-Bipartisan Policy Center report, “Healthy Aging Begins at Home"

NUMBER CRUNCH Moving Motivators & Choice Drivers

BY 2035, 1 OUT OF 3 AMERICAN HOUSEHOLDS WILL BE HEADED BY SOMEONE AGED 65 OR OLDER. -Metrostudy

-Joint Center for Housing Studies of Harvard University reversereview . com

8 TRR | 13

The Reverse Review February 2017

14 | TRR

JOSHUA SHEIN From the craziest thing he’s ever done and his most embarrassing moment to his thoughts on the future of the reverse market, we get the facts from Joshua Shein, senior director at Home Point Financial.

Director, Home Point Financial

Something nobody knows about me is I used

My favorite vacation was sailing in the British

to be in the medical products industry.

Virgin Islands.

My most embarrassing moment was having a bird poop on me during my first date with my wife.

The craziest thing I’ve ever done was sky-dive in California.

never miss an episode of Curb Your

Enthusiasm. I can’t wait for it to return.

The best lesson I've ever learned was “happy

The most memorable moment in my life was

The worst purchase I've ever made was a

If I could trade places with someone for a

I can't go without good food.

When I was a kid I spent a summer cycling through Europe.

My parents taught me how to always work hard and never give up.

> My

favorite time of the day is early morning,

when there is peace and quiet before the kids wake up.

day, I would choose not to. I’m very happy as The biggest challenge in the reverse

mortgage industry is overcoming the myths and

People should seek a career in the reverse

mortgage industry because there is nothing as rewarding as receiving a genuine thank-you letter from someone whose life you have changed.

I am optimistic about the reverse mortgage industry because the senior population

continues to grow and the need for the reverse product will only increase. >

Industry growth is dependent upon

respectable companies leading the way in educating and reaching out to consumers.

My first job was at a bicycle repair shop. I was 14 and had to get a special working permit.

Samsung phone. I’m an iPhone guy.

it works.

in high school as a waiter; it

service, people and patience.

when my kids were born, 10 and 13 years ago.

educating and informing more people as to how

I'll never forget my summer taught me all about customer

wife, happy life”!

is.

and read The Wall Street Journal (the actual

When I was younger I wanted to be an architect.

I always say please and thank you.

Every morning I drink coffee, check Twitter newspaper, not the digital version).

My favorite movie is Inception.

> I

MY FIRST CAR W A S A R E N A U LT FUEGO.

I would encourage a family member to

consider a reverse mortgage because it is truly life-changing. There is no other financial

product like it. If my parents were not in a condo, they would have one!

WHAT JOSH THINKS

The ideal characteristics of leaders in the industry are dedicated, committed and being in it for the long haul. reversereview . com

8 TRR | 15

The Reverse Review February 2017

ORIGINATING

THINK

The Key to Learning and Development By Lorraine Geraci

Five tips to keep your team on track toward growth and success In many industries, training and development is a “nice to have.” Organizations try to make sure there is some training available for

employees, but in many cases, education is optional. Add this element to the reverse industry, where employees are required to take mandatory compliance training, licensing training and continuing education, and it’s no wonder they feel too busy to engage in Learning and Development that can and will contribute to their growth and success. So how can the Learning and Development professionals who work in this space create opportunities that are quick, engaging and informational, and also ensure that employees in our organizations stay at the forefront of the industry?

01 Start at the top Recognition of the importance of training and education begins at the top. The senior executive level of any company must have the foresight to commit to educational opportunities for all employees. This includes consistent new hire training, subject matter training, and professional and personal development, as well as mandatory compliance topics. Senior leadership must set an example for managers to instill in their teams. Managers must work with their teams to manage projects and priorities so employees can make time to devote to education and development, and they must reward employees who do these things.

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02 Dispel the “I’m too busy” myth

03 Create a training plan

We live in a world where we typically seek out immediate gratification. We can get information from our phones in a matter of seconds. We can watch a YouTube video on almost anything. We get our answer, solve our problem, or learn what we need to at the speed of light. Well, almost. Given this fast pace, we pile our plates high with projects, deadlines and deliverables. In short, we get busy. It becomes easy to put off what isn’t at the very top of our priority list.

Senior executives and Learning and Development professionals should work together to establish a consistent plan and requirements for education across the company. This team should also establish whether training will be conducted in-house or whether it makes more sense to outsource the creation of training materials.

To dispel the “I’m too busy” myth, it’s important that training keep up with today’s technology and adapt to the culture of instant gratification. Those of us in Learning and Development need to focus on quick, engaging and informational pieces to capture attention and get the details across quickly. Videos, interactive courses and engaging, animated presentations are certainly a good start.

Should training be done in-house, there are many Learning and Development support functions—such as curriculum development and technical writing, video course technology, and analytics, surveys and reports—that can be tapped to create robust, engaging and consistent content. Remember that all training materials must fit your defined format and be “on brand,” use easily understood language and reflect compliance requirement. Finally, Learning and Development divisions must provide statistics and reports to showcase a return on investment to the company based on the training they provide.

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Conclusiontevantevantevant

Once a company has a clearly established and consistent, well-rounded education plan in place, senior management must continue to set the tone on the importance of training and continuing education based on the needs of each employee. Communicate the expectations to everyone, and hold managers accountable to ensure that their employees participate in the training that they need.

Training needs are constantly evolving and Learning and Development professionals would do well to ensure they are collecting feedback on their training materials to stay current and relevant. It is our responsibility to ensure that we have enough resources, technology and insight into todayâ&#x20AC;&#x2122;s employees to provide education that is pertinent, engaging and informative. We must create a culture that encourages employees to seek out training and education for growth and development, not push it to the side or view it as an afterthought. If we do this, we equip industry professionals with up-to-date skills and knowledge, and help them emerge as leaders in their fields.

Establishing a new training program may be challenging, but with buy-in from the top, engaging materials, a good plan and communication to the company, we can convince even seasoned veterans of the industry that continuing education is imperative to keep up with new skills, embrace changes, and learn new and smarter ways of doing things. n

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Consider engaging with your corporate communications and marketing departments to help get the word out to the company about what is available in your training program. Promote these offerings in company newsletters, on intranet resources and during company, department and team meetings.

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Stay relevant evantevantevantevant

ORIGINATING

Set expectations and communicate what is available

SPOTLIGHT

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The Reverse Review February 2017

ORIGINATING

Stop the Machine By Brad Bennett

Taking an old-school approach to new originations With the reverse mortgage market under more scrutiny than ever, loan officers must work twice as hard to secure successful loans. And while

most mortgage lenders agree the new Financial Assessment rules are better for everybody involved, that doesn’t stop most of us from griping over the extra work. It’s time for a little perspective.

That doesn’t mean that email campaigns or marketing automation technology is going anywhere soon, of course. It does, however, mean that reverse originators need to make customer service a top priority.

For the greater part of the last two decades, reverse originators have had the luxury of churning out loans like a well-oiled machine. Without having to take a borrower’s credit history or financial circumstances into strong consideration, the reverse loan process was less about building trust with customers and more about showing them where to sign on the dotted line. Along the way, we lost sight of the key relationship between loan officer and client—and forgot about the human behind the mortgage file. The new financial requirements set in motion by HUD in 2015 serve as a wake-up call for the entire industry. With the risk of loan rejection now firmly a reality and annual volume down overall, it’s clear that the previous “churn and burn” cycle of the reverse mortgage market is grinding down, leaving reverse originators no choice but to sit back and re-evaluate the business. 18 | TRR

It’s no secret that the changes to our industry have impacted the reverse mortgage process. With the addition of the new Financial Assessment rules, we now face longer application-to-approval timelines, which can greatly affect a customer’s perception of our companies and services. It’s up to us to manage our customers’ expectations and provide them with the necessary guidance along the way, even when loans are denied.

By now you’re probably thinking, “But Brad, we already have good customer service. What gives?”

Our solution? Put the customer first and get back to the basics. A Return to Customer Service With the rise of online lending and other financing options, a lender’s regionality no longer holds the same assurance of business as in years past. Even in recent years, a mass marketing campaign may have been rewarded with a rush of foot traffic. But today, reverse originators must earn their business the oldfashioned way: through personalized customer service. More than 75 percent of consumers say they view customer service as the “true test” of how much a company values them, according to the 2015 Aspect Consumer Experience Survey. A second study, by Walker, suggests that customer experience will overtake product or service as a key brand differentiator by 2020. In today’s reverse mortgage environment, good customer service can truly set you apart from the competition.

The truth is, every business says they have great customer service, yet few invest the time or energy into creating an actual customer service strategy (and customer service studies frequently show companies miss the mark).

A customer service plan is not simply being nice or friendly to customers. It’s a proactive approach that includes everything from making a customer feel comfortable to getting employees to understand how customer service helps meet business objectives. Creating a Customer Service Strategy Having a solid customer service plan in place can help push potential clients through the sales pipeline, improve customer retention and satisfaction rates, and lead to referrals—all of which can boost the bottom line. While there are countless modifiers that affect what customer service program will work best for your reverse mortgage company employees, a good example of the general process is offered by The Thriving Small Business.

ORIGINATING SEVEN STEPS FOR DEVELOPING A CUSTOMER SERVICE STRATEGY: Create a customer service vision: Work with your team to lay out your customer service goals. Do you need to speed up the process? Is most of your customer communications conducted through email? Maybe it’s time to add a phone call into the mix. Once you’ve laid out your goals, make sure to communicate this vision to your employees.

Reward and recognize good customer service: On that note, recognize when an employee does a great job! Set up an incentive program, treat them to a catered lunch or dole out a small cash bonus. When it comes to customer service, positive employee morale goes a long way. According to Temkin Group, satisfied employees are three times as likely to do something good for the company that is not expected of them— which means they are more likely to go above and beyond for your reverse mortgage customers.

Set goals for customer service: Following customer satisfaction assessments, identify the areas that need improvement and set a goal to turn things around. Asking employees to contact customers who fill out a contact form within 24 hours, rather than three days, for example, could upgrade your customer service levels.

Seniors who secure successful reverse loans and receive great customer service are much more likely to refer their peers to your company. But there’s actually opportunity in both groups. It may seem counterproductive, but steering customers who face credit problems toward financial counseling, for example, could help generate business in the future.

Train on service skills: Whenever you make a change to your customer service program, employees should be informed of the adjustments and trained on how to execute them. This could be as simple as deploying a standard phone greeting, or as complex as handling customer complaints or issues. Hold people accountable: When employees are putting good customer service into practice, transparency is important. They need to

In our business, the people who often fail to get approved need to tap into their home equity the most, whether it’s to fund home maintenance, purchase a new home or pay for medical expenses. They shouldn’t be left behind. This realization has caused mortgage professionals to evolve from being simply “loan officers” facilitating red tape, into the more complex role of a reverse mortgage advisor. Acting as an advisor requires loan officers to

While some may regard tools such as telemarketing or thank-you cards to be “old school,” we think it proves to our customers that we value them as a person—and not just as a lead pursued through our mass marketing efforts. The last thing we want our customers to feel is that they are a number or a path to profit. A Market Full of Opportunity Despite the new financial regulations, there is still a lot of opportunity in the reverse mortgage industry. Pew Research Center estimates that roughly 10,000 baby boomers retire each day, and it’s likely that the reverse mortgage market is going to grow once again. As the reverse market stabilizes, tapping into good ol’ customer service is only going to make our business better. n reversereview . com

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SPOTLIGHT

Once you’ve established a customer service initiative, it’s equally imperative to understand your future senior buyers. It’s a mistake for reverse originators to put customers into two distinct categories: borrowers who qualified for a reverse mortgage loan, and applicants who did not. We too often focus on the former and ignore the latter.

Since the launch of FA 2015, we’ve ramped up our telemarketing efforts in an attempt to jumpstart a personal conversation around reverse mortgages, and have implemented key communication touch points to keep customers fully informed and engaged. We also employ several “check-in” phone calls, send handwritten thankyou cards through snail mail and send small gifts (like gift cards or trinkets) to show our appreciation for their business.

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Hire the right employees: No matter how well-executed your customer service initiative is, it can’t be executed without great employees. While specific skills can be learned, a winning attitude cannot. Connect with HR to ensure that effective screening and preemployment testing is in place so that employees make the grade.

In fact, for all the discussions surrounding millennial homebuyers, few loan originators go out of their way to understand the senior set. Seniors put more stock in businesses that answer quickly to an inquiry; prefer thorough explanations of the purchasing process; and respond better to direct mail with visuals, nostalgia and clichés, rather than modern jargon and trends, according to Direct Marketing Center. That being said, seniors are increasingly tech-savvy, so make sure you have a healthy balance of communication.

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Understanding Your Future Senior Buyers

understand each customer’s unique needs, then put together a plan of action so they can benefit. The extra care and empathy employed by loan originators is likely to be rewarded with business, now or later. It pays to stay in touch and see where you can help.

ORIGINATING

Assess customer needs: Before launching a customer service strategy, it’s important to gather feedback from customers. This can be done through customer surveys, focus groups and comment cards. Understanding how your customers feel about the application and approval process provides key insights into how you’re doing—and what areas need work.

know if their hard work is paying off, or if they need to dig a little deeper. Don’t be shy in sharing organizational performance updates or in talking to an employee who isn’t measuring up.

The Reverse Review February 2017

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GROW

Increasing Your Sales with CRM Technology By Marc Montgomery

How these automated systems can simplify your day

In today’s fast-paced dot-com world, there are countless tools available on the Internet to help reverse mortgage brokers get organized and increase sales. I am baffled when I speak with

of text messages

are opened in the first five minutes

A good CRM will have date- and timestamped notes, automatically save all incoming and outgoing emails to each

These are just a few of the features and benefits that CRMs offer to make life easier. If you are not using these CRM features, you are wasting your time and energy on tasks that can be easily automated with a good CRM. If you want to advance in your field, get a CRM and take your business to the next level. n

View our digital version... Reverse Review articles (current and past) are available on our website. Access a wealth of online content about the business of HECMs. reversereview.com reversereview . com

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SPOTLIGHT

95%

Of course, all CRMs have a calendar to track appointments, but some will allow you to send a link to prospects that will show them what times you have available; they can schedule an appointment using that link.

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SURVEYS SHOW THAT

Since mortgage brokers are on the phone a lot, I recommend getting a system that has an integrated dialer that can make calls right from the CRM with a click of the mouse. This will automatically keep track of calls and provide easy access to all the saved information on each client. A dialer will also load and call through a list of numbers and automatically send a follow-up email when needed, all with just a click of the mouse. Dialers will also allow the user to prerecord a message you want to leave when you get a voicemail so you can go on to the next call while the dialer waits for the beep and plays your prerecorded message.

Surveys show that 95 percent of text messages are opened in the first five minutes, so having a CRM that will send text messages is a must in today’s market. Sent via text or email, appointment reminders are a great resource for you and your clients.

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Every customer relationship management (CRM) system will allow you to keep track of basic information about your clients and prospects, but unless you purchase a system specifically designed for mortgage brokers, most will not be able to track everything you need. Another solution is to find a CRM that allows you to create custom fields. With custom fields, you can track virtually any information you want.

ORIGINATING

brokers who have not taken the time to learn about these tools that will help them easily stay in contact with clients and prospects and increase sales opportunities.

client’s account, and allow you to send emails from the system. It will also have drip email and email campaigns. Drip emails allow you to send an email at a future date and time and email campaigns will automatically send a series of emails at predetermined intervals. This is a great way to stay in touch with prospects with an automated system. Some CRMs will also automatically send an email on a saved date in your system. This is a great feature for closing reminders or any situation where an email needs to be sent on a specific date. After setting it up, this happens automatically for all of your clients. And mail merge will put any information you need in the email and ensure that each person receives a personalized message.

The Reverse Review February 2017

WE WANT YOU. The RFS platform is built for the originator by the originator. STRATEGIC INITIATIVES

Proven models that deliver repeatable results.

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Cultivation and development with Builders, Real Estate Agents and Financial Advisors.

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Robust library of unique collateral to support your B2B and direct consumer efforts.

877-721-3847

#customerservice #integrity #loyalty #diligence #compassion 22 | TRR

www.rfslends.com

NMLS #1025894

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ASSIST

KNOW YOUR FACTS. THE STORY OF THE

Tax History Requirements

HECM's

By Mark King

How title insurance companies can help originators gather information

Generally speaking, 24-month tax histories use the date the 1009 was executed, and go back 24 months. Complications and time delays can arise because the requesting party must know the proper taxing authorities and many counties involve two or more entities. Each county,

Fortunately title insurance companies have access to the abstractors and county resources, and can therefore help in verifying this information. Employing a reverse mortgage title company with these specialty relationships can help save time and energy for loan officers and processors alike. Ultimately, the job is to get the loan closed quickly and efficiently, and sometimes obtaining these records just comes down to strong, solid knowledge of the title/settlement and reverse mortgage business. n

19 87 19 87 20 16

THE REVERSE MORTGAGE CONCEPT is discussed at a congressional hearing before the Senate Committee on Aging.

-1984-

AMERICAN HOMESTEAD UNVEILS the Century Plan, establishing the first mortgage of its kind that kept the loan in place until the borrower vacates the residence.

-1987-

CONGRESS PASSES A REVERSE MORTGAGE PILOT PROGRAM called the Home Equity Conversion Mortgage Demonstration.

-1988-

PRESIDENT REAGAN SIGNS the act into law.

-2016-

THE HECM INDUSTRY celebrates one million loans. reversereview . com

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SPOTLIGHT

As we know, if a borrower does not meet HUD's criteria, they are subject to withholdings in what's known as "Life Expectancy Set-Aside" (LESA). These funds set aside from the loan proceeds are used for the payment of property charges during the life of the borrower.

While ultimately this is the lender's/ broker's responsibility on a nationwide basis, obtaining the necessary information to comply with this requirement can be very time-consuming and frustrating.

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-1969-

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With this new rule in place, would-be borrowers must now prove their willingness and ability to pay their real estate taxes—in addition to homeowner association fees and other propertyrelated charges—on time for at least the prior 24-month period.

There was much buzz in our industry surrounding this requirement. At what point in the process would they be ordered? Who would order them? Could the cost be passed on to the borrower? And so on.

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THE FIRST REVERSE MORTGAGE IS ISSUED by a savings and loan company for the widow of a football coach in Portland, Maine.

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Among the myriad changes surrounding Financial Assessment was the 24-month tax history requirement.

A fee is frequently associated with providing this information. In those cases, many taxing authorities require the money upfront in the form of a check. Some counties will provide the information over the phone, but some will not. Many jurisdictions make information available online, but when they don’t, you may have to enlist the aid of an abstractor to physically visit the taxing authority to obtain the information.

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-1961-

ORIGINATING

township and state has its own nuances with respect to obtaining the tax histories. In Pennsylvania, for example, there are more than 2,400 taxing authorities to take into account.

EVOLUTION

The Reverse Review February 2017

SPOTLIGHT IN THIS MONTH’S EDITION

A LOOK AT THE NEW ADMINISTRATION AND ITS POTENTIAL IMPACT ON HOUSING POLICY

HECMs and the New Administration: A Who’s Who How these new players may influence housing policy

feb.

2017

By Scott Norman

WANT TO SEE MORE ARTICLES LIKE THIS?

See them at reversereview.com.

onald J. Trump is now the 45th president of the United States of America. If early developments

from his transition team and confirmation hearings for his cabinet appointees are any indication, he is eager to get to work on a relatively broad and ambitious agenda.

While many expect that his priorities will likely center around jobs and immigration policy, Trump is a businessman, so we can bet that establishing a probusiness environment through reducing regulation will rank highly as well. SOMETHING ON YOUR MIND? Need to get something off your chest? Hate something we do? Love something we do? Letters to the editor may be emailed to JESSICA@REVERSEREVIEW.COM. 24 | TRR

While a change in financial regulatory policy could have an important impact on our business in years to come, it’s unclear just how these impacts might be felt at the HECM level.

With that in mind, let’s review what— and whom— we know and assess their potential impact on HECMs over the next four years.

SPOTLIGHT Steve Mnuchin Trump has picked his campaign finance chairman, Steve Mnuchin, as his nominee for treasury secretary. The Wall Street banker spent 17 years at Goldman Sachs, where he was a partner, and also ran a series of eclectic businesses including a West Coast consumer bank and his own hedge fund, Dune Capital Management.

Carson’s confirmation hearing covered a number of topics, including mortgage reform, fair housing and the recently announced cut to FHA mortgage insurance premiums—which was reversed

Given his friendship with Pence, which dates back nearly 15 years, Hensarling may have a range of options for leadership roles over the next few years. While he has not commented on what he is interested in, he is poised to become a trusted conduit between the White House and the House GOP.

Higher Rates: Higher interest rates were already in motion before Trump was elected, but the upward trend accelerated in the months following the election. Legislators and everyday Americans are bracing for continued higher rates in the coming years, which is already being felt in mortgage applications.

In addition to the influence of these gentlemen, there are also a number of environmental factors at play that could influence the HECM trajectory. These include: Reduced Regulations: This is the one area where the Trump campaign provided the most direction on what we might expect. Trump’s transition team has stated that it would like to see a full repeal of the Dodd-Frank law, which would include the abolishment of the CFPB. The first step in replacing the 2010 DoddFrank financial overhaul law is already underway in Congress. In September, the Financial CHOICE Act (drafted primarily by Hensarling) was passed out of the House Financial Services Committee to replace Dodd-Frank with a “pro-growth, pro-consumer” alternative that would bring significant reforms to the CFPB, and much more.

What Now? So how does all of this impact HECMs? The short answer is, we just don’t know yet. We do know that the 115th Congress would be remiss to support a unilateral policy that would harm homeowners, especially seniors. We also know that there are 10,000 Americans aging into retirement every day. Given these things, it’s fair to expect that HECMs will be a more significant piece of the overall housing conversation and we all have a role to play in ensuring that seniors can access reliable financing to support their golden years. n

reversereview . com

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SPOTLIGHT

Like Mnuchin, Trump’s pick to run HUD has not spent a career in Washington, D.C. Dr. Carson grew up on food stamps in southwest Detroit, later becoming the director of pediatric neurosurgery at Johns Hopkins University at the age of 33. Carson’s autobiography, Gifted Hands, became a movie in 2009 and then-President George W. Bush honored Carson with the Presidential Medal of Freedom. Carson was reportedly notified he was a recipient of the award while performing a sevenhour surgery.

He is also a close friend of Mike Pence, and was a perpetual presence on the campaign trail with the new vice president. Adding to his influence, Trump personally met with the Texas congressman last summer to discuss an alternative to DoddFrank.

FHA & GSE Reform: Chairman Hensarling may have allies in and around 1600 Pennsylvania Avenue who support his longing to restructure Fannie Mae and Freddie Mac and eliminate additional government guarantees of mortgage loans. This would, in part, revolutionize mortgage lending in America, pushing the government further from the mortgage business. Reforming the GSEs and creating a permanent source of liquidity for the mortgage lending industry would be good for everyone, but the devil is in the details.

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Ben Carson

One of the most influential elected officials in the HECM arena is Texas Congressman Jeb Hensarling. Mr. Hensarling is the sitting chairman of the all-important House Financial Services Committee, which has jurisdiction over FHA legislation.

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During his five-hour confirmation hearing, Mnuchin was pressed on a number of issues, including tax reform, his own financial disclosures and the foreclosure practices of OneWest during his tenure. Mnuchin also reversed his previous stance on privatizing mortgage lenders Fannie Mae and Freddie Mac, noting instead that they had been “well run without creating risk to the government” and shifting the conversation to the broader need for housing finance reform.

Jeb Hensarling

In addition to the end of concentration of power within the CFPB, the Republican plan would also establish an independent, Senate-confirmed inspector general for the commission and would require significant capitalization requirements for banks.

ORIGINATING

Over the years, Mnuchin has contributed to both Republican and Democratic candidates, including Hillary Clinton and Barack Obama. He has also been a financier of high-profile movies, including Suicide Squad, American Sniper and Mad Max: Fury Road.

less than an hour after President Trump was sworn in.

The Reverse Review February 2017

Have industry-wide efforts to reach the advisor community been successful? By Jessica Guerin OUTREACH STRATEGY

CONNECTION

26 | TRR

Four years ago,

who has discussed how a reverse mortgage line of credit can enhance financial planning, and Jamie Hopkins, who has offered insights on forging relationships with advisors.

FHA issued changes to the HECM program that repositioned the product as a financial planning tool. Since then, conversation among industry players has centered on how we can reach this group and help them realize the important role a reverse mortgage can play in retirement income planning.

The association has also hosted webinars that discuss strategic uses of home equity in retirement and encourages its members to promote these webinars to their financial advisor network.

This initiative has been aided by a series of research papers written by retirement income experts and academics that highlight the value of the product. Such studies have been published in notable academic journals and have inspired stories in mainstream media outlets like Forbes and The Wall Street Journal, which have published articles extolling the potential benefits of reverse mortgages and suggesting that retirees consider a HECM to fill the retirement income gap.

INDUSTRY INITIATIVES For its part, NRMLA has worked hard to provide its members with the resources they need to establish connections with financial planners. Association conferences have featured talks from retirement income experts like Wade Pfau,

gAAG SVP of National Field Sales "AAG has several initiatives targeted to the financial planner/advisor community... We intend to continue and expand these programs in the 49 states we operate in, as well as test new concepts in development."

Lenders are also working to move the needle. AAG hosts one-on-one appointments between planners and loan officers, monthly educational webinars and lunch-and-learn events that offer continuing education credits to CFPs. Jesse Allen, SVP of AAG’s National Field Sales channel, says the effort has paid off. “Each of these programs has yielded lasting relationships with planners nationwide.”

Certainly, recognition from financial experts and some mainstream media outlets has helped the mission pick up momentum. One would hope that this, in conjunction with sustained efforts from NRMLA and the industry’s leading lenders, would help the movement gain traction. With so much of the industry’s collective energy focused on this mission, the success of which many have called crucial to the product’s long-term viability, one might naturally wonder how much headway we have actually made. Are we any closer than we were four years ago to getting the financial community to embrace reverse mortgages as something much more than an option of last resort?

Jesse Allen

Reverse Mortgage Funding has also launched a webinar series on its education platform, Retirement Experts Network. Tom Dickson, who leads RMF’s financial advisor channel, says the series has drawn a national audience of advisors each month and continues to grow.

Tom Dickson gRMF Financial Advisor Channel Leader "We consider the financial advisor community to represent a sizable and influential marketplace for our industry. Furthermore, we believe that home equity needs to be thoughtfully considered as part of holistic retirement planning and a renewed dialogue with financial advisors is essential to our industry’s success."

“The primary objective for the webinars is to deliver topical and comprehensive content from industry leaders and provide continuing education for the financial advisor community.”

We really feel like we’ve changed the conversation about reverse mortgages in terms of thinking about how to monetize your housing wealth.” -Shelley Giordano

RMF is also supporting new research from John Salter, whose influential study on the reverse mortgage line of credit was published in The Journal of Financial Planning in 2012. The research will outline how a HECM could be used to assist seniors looking to downsize. Dickson says RMF’s efforts have helped the lender build solid relationships with important stakeholders in the FP community. Finance of America Reverse formally launched its financial 8

Sherry Apanay gFAR Chief Sales Officer "We recognize that educating the financial planning community is an important piece of continued reverse mortgage acceptance and growth. To that end, we continue to make outreach through a variety of avenues in an effort to provide information about how the product can be a part of seniors’ financial plans as well as to highlight FAR’s unique offering." reversereview . com 8 TRR | 27

The Reverse Review February 2017

FINANCE EXPERTS WEIGH IN

Michael Kitces Financial advisor, blogger and speaker “I think the reverse mortgage industry has had some success in its efforts to spread awareness of the product, but from what I can see, the penetration is very limited at best."

advisor program last year and plans to implement a renewed approach in 2017. FAR Chief Sales Officer Sherry Apanay says the success of this movement is critical to the industry. “Educating the financial planning community is an important piece of continued reverse mortgage acceptance and growth,” she says. “Reverse mortgages have certainly become part of the conversation in a bigger way. Hopefully our efforts, along with the efforts of others in our industry, can help the financial planning community—and ultimately seniors who may benefit from a reverse mortgage—understand whether the product is right for them and how to find a lender they can trust.” THE FUNDING LONGEVITY TASK FORCE A significant push for this mission has come from a group of seven financial professionals and academics who have banded together to form the Funding Longevity Task Force. Established by Retirement Funding Solutions’ Torrey Larson and HECM expert Shelley Giordano, the task force aims to promote research about reverse mortgages and their effectiveness in retirement income planning. Giordano says she and Larson were inspired by research from Barry Sacks and others that appeared in The Journal of Financial Planning in 2012. “We felt that there was more fertile ground to be covered,” she says. “Torrey asked me if we could get a group of thinkers together to meet around the table and come up with a vision that would help us continue to look at housing wealth in an analytic way.” Giordano says the group works to spread the word by publishing papers, talking to the media, and meeting with members of the financial services industry and regulatory agencies to discuss the role housing wealth can play in funding the retirement income gap.

Wade Pfau Retirement income expert, author “I have noticed a distinct uptick in positive mass media coverage of reverse mortgages as well as a greater understanding among financial planners about their potential use in financial plans for clients." 28 | TRR

Task Force member and noted academic Sacks made significant headway in 2014 when he successfully lobbied FINRA to remove its warning on reverse mortgages as an option of last resort. In its revised alert, the regulatory authority says reverse mortgages “can be a useful tool for certain older Americans who might otherwise face losing their homes.” Recently, the Task Force announced another milestone: a partnership with the American College of Financial Services. With the help of the college’s resources, the two entities will work to expand the body of knowledge related to the

use of reverse mortgages in retirement income planning. Giordano says she thinks the group has achieved substantial success in its four years. “We really feel like we’ve changed the conversation about reverse mortgages in terms of thinking about how to monetize your housing wealth,” she says. REFINING OUR APPROACH Certainly, some tangible strides have been made, but are we making any real headway? It’s hard to know. Retirement income expert Pfau says he does see some momentum. “I have noticed a distinct uptick in positive mass media coverage of reverse mortgages as well as a greater understanding among financial planners about their potential use in financial plans for clients,” Pfau says, attributing this development to the efforts of the Task Force. “It is the group that directed my interest to reverse mortgages in the first place. They are very effective in reaching out to planners and other relevant groups.” Pfau, who recently published a book titled Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement, gives presentations about the product to financial planning groups around the country. “I am finding that more and more advisors are opening to their use,” he says. “Financial Planning Association chapters and other planner groups are reaching out to me to present on reverse mortgages at their meetings.” Financial advisor Michael Kitces, a sought-after speaker in the financial services industry who writes the popular blog Nerd’s Eye View, is less enthusiastic. “I think the reverse mortgage industry has had some success in its efforts to spread awareness of the product, but from what I can see, the penetration is very limited at best,” he says. Kitces says he may have been the first in the advisor community to publish articles about the HECM’s role in retirement planning in 2011, and he continues to believe in its potential. But he says the industry has done a poor job in elevating its image, which has dampened progress. “Too many pushy salespeople, crackdowns on the product to curb sales abuses and late-night infomercials put the reverse mortgage into questionable company.”

Reverse mortgages have certainly become part of the conversation in a bigger way. Hopefully our efforts, along with the efforts of others in our industry, can help the financial planning community—and ultimately seniors who may benefit from a reverse mortgage—understand whether the product is right for them and how to find a lender they can trust.” -Sherry Apanay To engage financial advisors and get them to see past misconceptions, Kitces suggest originators tone down the sales lingo and assume a more consultative approach. “Too many reverse mortgage brokers treat the reverse mortgage as a panacea solution for all situations, which is a huge turnoff for fiduciary financial advisors, and makes them distrustful, because no product is always the right answer,” Kitces says. “I regularly see reverse mortgage brokers undermine themselves by pushing too hard like salespeople, and not taking a more objective and consultative approach.” Pfau suggests originators learn about retirement income planning so they can better speak to these professionals. “This provides a way to help the advisor see how a reverse mortgage can best fit into a financial and retirement plan,” he says, adding that his book can help in this endeavor. “In the book, I explore the financial planning research around reverse mortgage use in order

to help planners and sophisticated consumers to better understand how the reverse mortgage tool can add value to a retirement plan.” NRMLA also suggests that originators educate themselves about trends in financial planning and priority issues for planners. “Learning more about their objectives can help us frame our messaging about why a reverse mortgage can help a client meet their financial goals,” NRMLA spokesperson Jenny Werwa says. If we can refine our approach, Pfau says he thinks reverse mortgages will eventually gain acceptance. “I expect more planners will embrace reverse mortgages. For several years, Social Security claiming strategies was the hot issue for planners working in the retirement space. But after a change in the Social Security rules reduced some of the planning opportunities, all of that momentum was lost. I think that, slowly but surely, reverse mortgages are replacing Social Security as the hot topic in the retirement world.” n

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The Reverse Review February 2017

LAST WORD

REFLECT

Compassionate Pragmatism By Shannon Hicks

The new administration and why it must recognize the value of the HECM

The election of Donald Trump exemplifies the contempt many Americans hold for politicians and experienced political operators. If history has

taught us one thing, it is that seasoned politicians have somewhat predictable behavior. Today, we find ourselves entering a period with no historical precedent to help shape our expectations as a political outsider takes the reins of power. In addition, another appointee who has never held a political office could be leading one of the nation’s largest agencies. Many are left to wonder what Trump’s selected HUD secretary, Ben Carson, will focus on as he steers one of the largest bureaucracies in the federal government with a budget in excess of $47 billion. With no prior civil service to draw upon, one is left to consider his early childhood. Carson grew up

in the inner city, perhaps a fitting background as HUD oversees programs for lowincome families, provides rental assistance and helps struggling families avoid foreclosure. Compassion should be an attribute for anyone whose choices may impact the future housing of millions of Americans. To Dr. Carson’s credit, both critics and supporters regard him as a caring and compassionate man. On a broader scale, let’s hope the administration’s compassion extends out to older homeowners who could benefit from taking out a HECM. The Mnuchin Connection Last month Treasury secretary nominee Steven Mnuchin faced the scrutiny that is typical during the confirmation process. Unfortunately, a pointed question regarding reverse mortgage foreclosures served only to promote the false narrative that banks evicted reverse mortgage borrowers without cause. Mnuchin cited the challenges of non-borrowing

"If the administration is truly pragmatic, one hopes they will see the savings in subsiding the HECM versus incurring more unfunded liabilities for senior homeowners who may need entitlement programs. Pragmatism can be compassionate, for both low- and middle-income Americans." 30 | TRR

spouses and the nonpayment of property taxes IndyMac bank faced in their acquisition of Financial Freedom’s HECM servicing. Mnuchin said he would work closely with HUD to address these issues, perhaps not knowing that recent HECM rules already have. Compassionate Pragmatism Urban renewal is critical for the improvement of our nation’s long-neglected inner cities. However, less visible is the critical need for seniors to safely access their home’s equity and finance their retirement while maintaining their independence. Will a “business-minded” administration see the value in the federal government’s continued support of the HECM program?

It’s a question worth asking as the recent actuarial report shows a projected negative economic value of the program. If the administration is truly pragmatic, one hopes they will see the savings in subsiding the HECM versus incurring more unfunded liabilities for senior homeowners who may need entitlement programs. Pragmatism can be compassionate, for both lowand middle-income Americans. Presidential administrations typically set the tone while experienced bureaucrats execute the finer details that fit within the government’s philosophy. Today, more than ever, older homeowners need the assurance that the reverse mortgage will continue to provide a means to fund their longevity. n

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