The Reverse Review October 2016 by The Reverse Review

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REVERSE

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INSIDE THIS ISSUE | LEADERS WEIGH IN ON THE FUTURE OF THE MARKET

review

OCTO BE R 2 0 1 6

H O T S EAT

ORIG INAT ING

PG. 15

PG. 16

Maria Fregosi sits down in our Hot Seat

How to connect with financial advisors

APP R AISING

Navigating HUDâ&#x20AC;&#x2122;s Electronic Appraisal Delivery portal PG. 21

LAST WORD

Working together toward success PG. 30

The Reverse Review October 2016

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reversereview . com

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The Reverse Review October 2016

From the editor RE

V IE

E REVE W TH RS

VER

S E REVI E W

REVERSE review

OCTOBER 2016

HOT SEAT

ORIGINATING

PG. 15

PG. 16

Maria Fregosi sits down in our Hot Seat

How to connect with financial advisors

APPRAISING

COVER

Reverse professionals remain confident in the product’s long-term promise.

The reverse mortgage market has no doubt seen better days. In the wake of major program adjustment, some companies are seeing their numbers dip as they grapple with change.

Still, many seasoned reverse professionals remain exceedingly confident in the product’s promise. In this month’s Spotlight article, we reached out to leaders at several major companies across the space with questions about the direction of the market. We asked them about the challenges facing the industry, the key to future growth and what we can do individually to help propel the market forward. Notably, nearly every respondent said their confidence in the product is rooted in its ability to assist the growing senior demographic’s overwhelming need to age in place.

Navigating HUD’s Electronic Appraisal Delivery portal PG. 21

OCTOBER 2016

A NOTE FROM JESSICA GUERIN

THE

IEW

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VERSE R EV E RE

INSIDE THIS ISSUE | LEADERS WEIGH IN ON THE FUTURE OF THE MARKET

LAST WORD

Working together toward success PG. 30

This belief was echoed in this month’s feature story, which highlights several growing reverse divisions around the country that are ramping up despite the down market. Industry-wide volume may be down, many said, but great promise and opportunity remain. In our conversations with these longtime reverse professionals, we found a consistent theme: The numbers do not lie, the senior segment is growing and they have made clear their desire to age in place. Now, it’s up to us to fine-tune our skills so that we can better educate consumers about the solution a reverse mortgage can provide.

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

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Feedback 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.

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FIND US ON FACEBOOK AND LINKEDIN

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

Printer The Ovid Bell Press 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.

table of contents 08 / STATS

TRR 10.16

21 / APPRAISING

19 24

August top lenders and HECM endorsement stats through July

Navigating the Electronic Appraisal Delivery Portal

REVERSE MARKET INSIGHT

Overcoming the challenges presented by HUD’s new portal

10 / NRMLA NEWS

JOHN DINGEMAN

Read about the association’s current initiatives.

23 / TITLE TIP

Signing by a Mark

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

When borrowers have trouble signing their name MEGAN HAFENSTEIN

15 / HOT SEAT

24 / SPOTLIGHT

Head of strategy for Home Point Financial

Leaders in the reverse mortgage space weigh in on the future of the program.

16 / ORIGINATING

30 / LAST WORD

Maria Fregosi

Industry Insight

Closing the Gap Between Financial Advisors and Reverse Mortgage Originators Tips for explaining the importance of a HECM TOM DICKSON

The Importance of Partnership How working together toward a common goal generates the best chance for success

JIM MAHONEY

19 / ORIGINATING

Creating Your A-Team Crafting the perfect sales force for maximum efficiency

HARLAN ACCOLA

FEATURE

26 / FEATURE

YOU CAN DO IT!

Forward Thinking Confident in the product’s promise, lenders around the nation are ramping up their reverse divisions. JESSICA GUERIN

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

“Several lenders are revving up their presence in the space. Undeterred by the market’s current slump, these companies are convinced of the product’s future demand and eager to work with America’s seniors to help them find financial stability in retirement. reversereview . com

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The Reverse Review October 2016

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contributors JOHN K. LUNDE

8 | Stats g

John K. Lunde

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

Maria Fregosi

TOM DICKSON Tom Dickson

Harlan Accola

John Dingeman

Megan Hafenstein

16 | Closing the Gap Between Financial Advisors and Reverse Mortgage Originators g

Tom Dickson is the financial advisor channel leader for Reverse Mortgage Funding. He has been educating financial advisors and consumers since 2007 through informational webinars. Through his webinar series on RMFâ&#x20AC;&#x2122;s Retirement Experts Network, he makes subject-matter experts from academic and professional circles available to educate advisors and investors on complex and evolving financial topics.

JOHN DINGEMAN

21 | Navigating the Electronic Appraisal Delivery Portal g

John Dingeman is the chief appraiser at Landmark Network. He is a Certified Residential Appraiser in California, Nevada and Arizona, and a registered property tax agent in Arizona. He serves as VP of the National Association of Appraisers and was the president of the Coalition of Arizona Appraisers. He has extensive experience in the appraisal of single-family dwellings; small, income-producing properties; and vacant land. As an FHA appraiser, he specializes in HUD/REO properties.

MARIA FREGOSI

15 | Hot Seat g

Maria Fregosi is head of strategy for Home Point Financial, where her responsibilities include HECMs, capital markets, servicing, new products, marketing and post-origination operations. Previously, Fregosi was chief capital markets officer at Hamilton Group Funding, COO at Catalyst Financial and CCO at BKF Capital Group. Fregosi also worked at ABN AMRO Bank for 15 years, where she was part of the team that successfully ran and sold ABN AMROâ&#x20AC;&#x2122;s mortgage and home equity business to Citibank.

HARLAN ACCOLA

19 | Creating Your A-Team g

Harlan Accola, CRMP, is the branch manager and national reverse mortgage director for Fairway Independent Mortgage Corporation. Accola has been in the mortgage industry for more than 20 years and is a registered financial consultant and a Certified Senior Advisor. Based in Marshfield, Wisconsin, Accola specializes in educating loan officers, financial advisors, Realtors, attorneys and other professionals on HECMs. harlana@fairwaymc. com NMLS #277693

MEGAN HAFENSTEIN

23 | Signing By a Mark g

Megan Hafenstein is the VP of Allegiant Reverse Services. She has been serving the reverse closing and mortgage industry since 2005 and oversees business development and client services, working as the liaison between ARS and clients to streamline processes. She has been highlighted in multiple industry articles, been a key speaker at conferences and has held numerous training sessions regarding reverse mortgage title and settlement solutions.

Jim Mahoney JIM MAHONEY

30 | The Importance of Partnership g

Jim Mahoney has been involved in the development, design, marketing, origination and servicing of home equity conversion loans since 1990. In his role as executive chairman at Celink, he focuses on strategy and direction. Mahoney has served as chairman, special advisor and CEO at Financial Freedom.

PARTICIPATE IN THE Share your ideas with your colleagues and be a part of the solution. Reach out to us at info@reversereview.com. CONVERSATION.

reversereview . com

8 TRR | 7

The Reverse Review October 2016

stats

August 2016 Top Lenders Report

12345 American Advisors Group

Finance of America Reverse

Reverse Mortgage Funding

One Reverse Mortgage

Synergy One Lending

Endorsements

850

518

460

297

215

Lender Endorsements LIBERTY HOME EQUITY SOLUTIONS INC

144

Lender Endorsements BROKER SOLUTIONS INC

HIGHTECHLENDING INC

137

VIP MORTGAGE INC

128

FRANKLIN FIRST FINANCIAL LTD

110

YADKIN VALLEY BANK AND TRUST

NATIONWIDE EQUITIES CORPORATION

UNITED SOUTHWEST MORTGAGE CORP

FIRSTBANK

SOUTHERN TRUST MORTGAGE LLC

SUCCESS MORTGAGE PARTNERS INC

BANC OF CALIFORNIA

BANNER BANK

HOME POINT FINANCIAL CORPORATION

AMERICAN NATIONWIDE MORTGAGE COMPANY 9

OPEN MORTGAGE LLC

LAND-HOME FINANCIAL SERVICES

MCM HOLDINGS INC

HOMEOWNERS MORTGAGE ENTERPRISE

VANGUARD FUNDING LLC

UNITED NORTHERN MORTGAGE BANKERS LTD 34

UNITED MORTGAGE CORP

SUN WEST MORTGAGE CO INC

MEADOWBROOK FINANCIAL MORTGAGE

AMERICAN PACIFIC MORTGAGE

MORTGAGESHOP LLC

BANK OF NORTH CAROLINA

GEORGETOWN MORTGAGE

DOLLAR BANK FSB

ALPHA MORTGAGE CORPORATION

PACIFIC RESIDENTIAL MORTGAGE LLC

MARKETPLACE HOME MORTGAGE

LONGBRIDGE FINANCIAL LLC

GSF MORTGAGE CORPORATION

WILLOW BEND MORTGAGE CO

TOWNEBANK 16

SKYLINE FINANCIAL CORPORATION

LENOX FINANCIAL MORTGAGE CORPORATION 16

WHOLESALE CAPITAL CORP

ACADEMY MORTGAGE CORPORATION

US MORTGAGE CORPORATION

MORTGAGE BROKERS SERVICES

RESIDENTIAL HOME FUNDING CORP

CENTRAL PACIFIC BANK

LIVE WELL FINANCIAL INC

REVERSE MORTGAGESCOM INC

RMS/SECURITY ONE LENDING

FAIRWAY INDEPENDENT MORTGAGE CORP CHERRY CREEK MORTGAGE CO INC

THE FEDERAL SAVINGS BANK

PLAZA HOME MORTGAGE INC

RESOLUTE BANK

BANK OF ENGLAND PEOPLES BANK

MONEY HOUSE INC M & T BANK

UNIVERSAL LENDING CORPORATION QUONTIC BANK FSB

SUN AMERICAN MORTGAGE CO

COMMUNITY FIRST NATIONAL BANK

MANN MORTGAGE LLC

NOVA FINANCIAL & INVESTMENTS CORP 8 | TRR

stats

HECM Endorsement Stats Through July 2016 { FIGURE }

PURCHASE

$1,200

REFI STANDARD

$800 $600 $400 $200

{ FIGURE }

6/1/17

5/1/16

4/1/16

3/1/16

2/1/16

1/1/16

12/1/15

11/1/15

10/1/15

9/1/15

8/1/15

$0 7/1/15

DOLLARS IN MILLIONS

HECM ENDORSEMENT INITIAL PRINCIPAL LIMITS

$1,000

HECM ORIGINATORS (FHA & NON-FHA)

INDUSTRY SUMMARY

TRAILING TWELVE MONTH ENDORSEMENTS 6,000

INDUSTRY SUMMARY

0 8 9 10 11 12 1 2 3 4 5 6 7 Retail

Wholesale *Numbers Represent Months

TOTAL

UNITS CHG%

8.72%

2,820 20.98%

5,749 14.41%

-7.17%

2,589 -11.61%

2,080 -26.24%

4,669 -18.79%

2,427

-6.26%

1,901 -8.61%

4,328

-7.3%

2,467

1.65%

1,553 -18.31%

4,020

-7.12%

2,524

2.31%

1,705

9.79%

4,229

5.2%

Wholesale Endorsement Growth

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%

Total Endorsement Growth

-6.19%

* Figures Above Reflect Change from Prior Month

UNITS CHG%

WHOLESALE

2,929

-4.83%

2,000

RETAIL

Retail Endorsement Growth

4,000

MO.

TOT

29,171

21,988

51,159

%%%%% 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 October 2016

nrmla news BROUGHT TO YOU BY NRMLA STAFF

EQUITY EXTRACTION D I S C U S S E D AT RETIREMENT FORUM Among the topics discussed at the 18th Annual Meeting of the Retirement Research Consortium, held August 4-5 at the National Press Club in Washington, D.C., was a comparison of equity extraction methods and their impact on the financial well-being of seniors presented by Dr. Stephanie Moulton of the Ohio State University.

DR. STEPHANIE M O U LT O N OF THE O H I O S TAT E UNIVERSITY

From her research, “How Home Equity Extraction and Reverse Mortgages Affect the Financial Well-Being of Senior Households,” Moulton found that HECM borrowers showed a spike in credit card balances prior to loan origination, and then a sharp decline in credit card balances that persists thereafter. She pointed out that this is a unique pattern not observed for other extraction channels. It may indicate a need for liquidity that is met with credit cards in the short term, and then substituted with home equity borrowing through a HECM. To the extent that HECM borrowing is lower cost than credit card borrowing, it could lead to improved financial well-being.

Social Security Replacement Rates Declining for Younger Couples Retired baby boomer couples receive less from Social Security compared with their parents and the “replacement rate” will diminish further as Generation X couples prepare for retirement, 10 | TRR

F O U R M O R E R E A S O N S T O A T T E N D N R M L A’ S ANNUAL MEETING & EXPO The 2016 Annual Meeting & Expo is your time to reconnect with contacts and grow your network, get the latest news and updates from industry experts, and give back to Chicago's seniors through our volunteer service project. Network The meeting is the industry's largest annual gathering of reverse mortgage professionals from across the country. From planned meetings with your team to impromptu conversations with new contacts at The Bridge Networking Lounge, there's time and space for you to get together at the conference hotel. Learn Not your typical classroom lectures, sessions at the Annual Meeting & Expo are designed for maximum engagement. We'll be evaluating the borrower experience, from pre-application to the end of the loan, and discussing opportunities to simplify and clarify the process. Speakers will take you on a deep dive into the counseling session, the loan documents, the closing, the hand-off from closing to servicing, and repayment. View a preliminary agenda at nrmlaonline.org. Earn CE Credits NRMLA will offer eight continuing education credits that you can apply toward your annual NMLS license renewal or the Certified Reverse Mortgage Professional designation. The Ethics Workshop that all CRMP applicants must complete prior to taking the examination will be offered Wednesday, November 16, from 1:30 p.m. to 3:30 p.m. Serve NRMLA has organized a volunteer project on Sunday, November 13, in partnership with Little Brothers – Friends of the Elderly, Chicago Chapter, a nonprofit dedicated to relieving isolation and loneliness among the elderly. With the generous support of our sponsors, holiday and birthday gifts were purchased for nearly 1,000 Chicago seniors. Volunteers can choose from two shifts (9 a.m. to 11 a.m. or 11 a.m. to 1 p.m.) to help package gifts and creatively decorate the gift bags.

Join your colleagues in Chicago, November 1416, as we discuss enhancing the reverse mortgage borrower experience during the largest gathering of reverse mortgage professionals each and every year, the 2016 Annual Meeting & Expo. L E A R N M O R E O R R E G I S T E R AT N R M L A O N L I N E . O R G .

according to a new study published by the Center for Retirement Research at Boston College. “Social Security is essential to Americans’ retirement security,” according to the CRR’s Squared Away Blog. “But the prevalence of women in the labor force today has diminished its importance to most married couples and can have a big impact on their retirement planning.”

When Social Security was created in the 1930s, women were largely homemakers whose pension benefits were based on the earnings of their breadwinner husbands. Today, women make up half the U.S. labor force, but Social Security’s design has remained largely unchanged. The result has been a steady decline in married couples’ replacement rates—the percentage of the combined earnings of two working spouses that Social Security replaces when both retire.

nrmla news REVERSE MORTGAGES IN THE NEWS 2 The biggest issue facing the reverse mortgage industry continues to be a lack of understanding about reverse mortgages among consumers and policymakers. That’s according to NRMLA President & CEO Peter Bell, during a Q&A with Scotsman Guide editor Will McDermott. “People seem standoffish about reverse mortgages, but when you talk to them about the reasons for that, it’s generally based on information that they’ve heard somewhere that’s not correct,” said Bell. When asked to describe the average reverse mortgage borrower, Bell replied, “Every case has a different set of circumstances and a different motivation.” A growing area is the use of reverse mortgage proceeds as a cash reserve, so that people can draw on them when they have peak demands for cash, thereby allowing other assets to remain intact and continue to grow in value and pay dividends.

2 All is not lost for people who are approaching retirement with little or no savings, writes Nerd Wallet personal financial columnist Liz Weston in her article, “A Hail Mary Retirement Plan for Those With Nothing Saved.” Consider working longer and delaying Social Security. “Every year you wait past age 62 adds about 7 percent to 8 percent to your eventual benefit,” says Weston, who advocates turning to one’s kids, exploring public benefits and tapping home equity. In addition to downsizing, homeowners should consider a reverse mortgage, which “can give you a lump sum, a stream of monthly checks or a line of credit you can tap as needed.” Weston interviewed New Jersey resident Walt Lukasik, 60, who has started investigating a reverse mortgage to salvage retirement plans that were upended by his wife’s cancer diagnosis 15 years ago. “If he applies for a reverse mortgage in two years,” says Weston, “it could pay off the $75,000 balance on their current mortgage and give them a monthly payment of about $390.”

Proper Steps for Submitting Ethics Complaints NRMLA encourages members to let us know when they encounter a questionable advertisement, or inappropriate conduct by a reverse mortgage professional, either through direct contact or through one of your clients. We ask that members please submit complaints using the official Ethics Complaint Form so that we can conduct a proper investigation and determine whether further action is warranted. The Standards & Ethics Committee has the authority to impose penalties that include probation, suspension or termination of membership. More serious complaints, or complaints involving non-members, are submitted to authorities, such as FHA, Federal Trade Commission and state attorneys general, for further review and follow-up action. If you have any questions, please email Darryl Hicks at dhicks@dworbell.com.

EQUITY EXTRACTION D I S C U S S E D AT RETIREMENT FORUM The financial planning industry is adapting to longer life spans and retirements, but not as quickly or aggressively as it should, according to a survey of 348 advisors conducted by InvestmentNews. “I think there are going to be an awful lot of people

whose lifestyle is going to be dramatically impacted,” Harold Evensky, chairman of the planning firm Evensky & Katz, told InvestmentNews contributor Elizabeth MacBride in her article, “The Longevity Paradox.” According to survey results, financial advisors use an average lifespan of 91 for men and 94 for women when structuring retirement plans. While those numbers are appropriate for today,

researchers agree that a “longevity boost”—possibly caused by better cancer detection methods and healthier habits—will occur; they’re just not sure when or from where it will occur, or which group of people it will affect most. In the meantime, financial advisors are telling clients to save more and work longer. The InvestmentNews survey found that 65 percent of advisors are telling clients to

NRMLA CONGRATULATES

David Guelff of American Capital Corporation, based in El Segundo, California, for earning the Certified Reverse Mortgage Professional designation. Guelff has originated mortgages at ACC for more than 20 years and has specialized in reverse mortgages for nine years. He is the 145th person to earn the CRMP designation. All CRMPs are prominently displayed on the NRMLA consumer website, reversemortgage. org. Information on the qualifications and steps for becoming a CRMP can be found on nrmlaonline.org.

delay claiming Social Security benefits, while 54 percent recommend lower withdrawal rates as a way of dealing with longer lifespans. MacBride says some children may expect an inheritance in the form of the family home. But as reverse mortgages and home equity loans become more popular, especially to finance unexpected health care costs, those real estate windfalls are likely to decline in number. reversereview . com

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The Reverse Review October 2016

The Benefits of Choosing

At Premier Reverse Closings (PRC), we are proud to be the ďŹ rst full-service naaonal tle and seelement company to specialize in reverse mortgages, and the ďŹ rst to close over 175,000 transaccons. We are commiied to our clients and senior borrowers, making us a proven industry leader and truly First in Reverse.

First in Reverse 12 | TRR

THIS MONTH A LOOK AT THE NEWS AND STATS AFFECTING THE MARKET

MONEY MATTERS

Older Americans spend one-third of their budget on housing.

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

SENIOR AGENDA

Most seniors want to stay put. Housing is the greatest expense among those 55 and older, representing more than 32 percent of total annual expenditures, according to a report by the U.S. Bureau of Labor and Statistics.

As age increases, so does the share of household income spent on housing.

—Freddie Mac 55+ Survey

RETIREMENT FEARS

Americans are not confident in their ability to retire.

Roughly two-thirds of respondents in a Northwestern Mutual study of 2,000 Americans said there is a chance they will outlive their retirement savings. The study suggests that Americans look beyond Social Security to unconventional funding streams to support retirement.

HOME EQUITY

America’s seniors are house-rich.

$3.1t

Homeowners age 65 and older have $3.1 trillion, or 44 percent, of the nation’s housing wealth. —The Urban Institute

NUMBER CRUNCH 2034

The year trustees predict Social Security will no longer be able to pay full retirement and disability benefits. Beyond this, the fund will have enough to pay just 75 percent of benefits through 2090. reversereview . com

8 TRR | 13

The Reverse Review October 2016

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

Proven models that deliver repeatable results.

SALES COACHING

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

TURNKEY MARKETING PLATFORM

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

877-721-3847 14 | TRR

www.rfslends.com

NMLS #1025894

MARIA FREGOSI

Head of Strategy Home Point Financial

From her most memorable vacation and her favorite book to her thoughts about the reverse mortgage market, we get the facts from Maria Fregosi, head of strategy at Home Point Financial.

MY FIRST CAR WAS A NISSAN PULSAR.

> Something

nobody knows about me is I am a

recipe tester for Cook’s Illustrated magazine.

> My

favorite vacation was to the Galápagos

Islands.

figure skater.

craziest thing I’ve ever done was scuba

dive with sharks.

> My >

favorite movie is Gone With the Wind.

I never miss an episode of Scandal.

> When

I was younger I wanted to be a

veterinarian.

> Every >

favorite book is Anna Karenina. biggest challenge in the reverse

mortgage industry is gaining trust. There is still a negative perception of the product and all the

legislative and industry changes need to continue to be publicized. > People

should seek a career in the reverse

mortgage industry because you get to help

people in what may be a difficult time in their lives. > Industry

growth is dependent upon the

education of financial planners and the general scenario analysis and personal stories are

I can't go without coffee. > When

I was a kid I was an avid

reader and read hundreds of books over the summer.

> My

first job was babysitting

and then as a cashier at a gas station.

> My

parents taught me how to

dream big and work hard.

> My

favorite time of day is dawn. I’m a morning

> My

iPod go-to is the podcast Serial.

person.

I've never skydived, but would like to.

I always make time for dinner with my family when I’m home.

> My

public through all forms of media. The more

morning I walk.

My favorite website is wsj.com.

best purchase I've ever made was my cat.

He gives me a tremendous amount of joy.

> The

If I were a professional athlete, I would be a

> The

presented, the less negative perception the product will have. > The

ideal characteristics of leaders in the

industry are honorable, straightforward, intelligent and innovative.

> I

would encourage a family member to

consider a reverse mortgage because it can help when there are very few options. My father

went into an assisted living facility and my mother was trying to stay in the family home. The cost of the facility was draining her savings and getting to the point that she would lose the home. A reverse mortgage can be a lifesaver in a situation like this.

WHAT MARIA THINKS

The ideal characteristics of leaders in the industry are honorable, straightforward, intelligent and innovative. reversereview . com

8 TRR | 15

The Reverse Review October 2016

ORIGINATING

SUCCEED

Closing the Gap Between Financial Advisors and Reverse Mortgage Originators By Tom Dickson

Tips for explaining the importance of a HECM Communication is a building block of any good relationship, be it business or personal. And

in the reverse mortgage industry, the professional exchange between originators who educate financial advisors on HECMs has become one of the most effectual aspects of this burgeoning industry.

“A loan officer who provides in-depth knowledge and concrete examples of a HECM line of credit in action has the opportunity to sway an advisor’s otherwise ambivalent outlook toward reverse mortgages.”

Due to the regulatory changes made to the HECM program over the last five years, a fresh dialogue is greatly needed to both approach and build successful relationships with financial advisors who may be clinging to the archaic notion that a reverse mortgage is an expensive option only to be considered as a last resort. Financial advisors who are uninformed about the lower-cost options now available and the unique features of HECMs may be giving their clients out-of-date advice.

in financial planning in order to have a meaningful conversation with these advisors. Rather, you need to educate them on the importance of the FHA insurance and the features and protections it supports. Also, you need to share tangible examples of how HECM payment plans can be designed to solve various client challenges.”

According to Mark O’Neil, national sales leader at Reverse Mortgage Funding, “In my experience, speaking to financial advisors can be intimidating. But what HECM professionals need to keep in mind is that you don’t need to be an expert

It’s no secret that home equity is quickly becoming a more regularly acknowledged component of the fiduciary standard, which requires advisors to put their clients’ interests above their own. But in order to take advantage of the changing tide, it behooves

us to focus not only on promoting the benefits of reverse mortgages for an advisor’s clients, but for the advisor’s own business strategy as well. When discussing HECM products with advisors, consider highlighting the fact that making their clients aware of additional products and tools (i.e., a reverse mortgage) will add value to their services and increase their favorability in the eyes of their clients, which could lead to more clients. Moreover, incorporating reverse mortgages into their retirement strategy arsenal will mean more of their clients’ invested assets can remain

TIPS FOR APPROACHING FINANCIAL ADVISORS: 1. Highlight the fact that more products and tools will add value to their services.

16 | TRR

2. Mention that incorporating HECMs into their offerings will mean more of their clients’ assets can remain under their management.

3. Remind them that every client sleeps more soundly knowing that their assets are in the hands of a knowledgeable and progressive consult who considers all approaches.

ORIGINATING under their management, and for an extended time period. Thirdly, and perhaps most importantly, remind the financial advisor that every client sleeps more soundly knowing that their wealth and assets are in the hands of a knowledgeable and progressive consultant, one who considers all available approaches when ensuring their secure retirement.

The conversation with financial advisors should, in my opinion, start and end with the HECM growingline-of-credit option, and how it is a vastly superior product to a traditional HELOC for clients age 62 and older. A reverse mortgage line of credit offers substantial advantages over a HELOC, including a flexible repayment option, a credit growth feature, various payout options, non-recourse terms and security. There are about 5 million senior households in this country with a HELOC. I challenge anyone to show me how the majority of those homeowners would not be better served by a HECM line of credit instead. Showing a financial advisor a simple graph illustrating a real line-of-credit growth scenario is a powerful way to demonstrate one of the most obvious advantages of a reverse mortgage line of credit over a HELOC. And it will undoubtedly allow

TPO_Ad_ReverseReview_WindowofOp_Oct2016_L533-Exp082017_PRINT.pdf

9/15/16

for a segue into a conversation about additional reverse mortgage solutions for their clients. This kind of educational collateral, along with copies of the aforementioned academic research, can paint a clear picture of the practical uses of a reverse mortgage, and should be in every originator’s briefcase when they head out for a meeting with a financial advisor.

Ultimately, reverse mortgage professionals must work in tandem with financial advisors to truly impact how consumers perceive the importance of home equity in retirement planning. The goal is to make reverse mortgages a mainstream retirement financing solution. Those who proactively interact with and educate advisors will lead more financial professionals to embrace reverse mortgages as a means of closing the retirement income gap for their clients. n © 2016 Reverse Mortgage Funding LLC, 1455 Broad St., 2nd Floor, Bloomfield, NJ 07003, 1-888-494-0882. Company NMLS ID # 1019941. nmlsconsumeraccess.org. L539-Exp082017

APPRAISING

A loan officer who provides in-depth knowledge and concrete examples of a HECM line of credit in action has the opportunity to sway an advisor’s otherwise

"Showing a financial advisor a simple graph illustrating a real line-of-credit growth scenario is a powerful way to demonstrate one of the most obvious advantages of a reverse mortgage line of credit over a HELOC."

ORIGINATING

“The message a lender or loan officer should want to get across is that home equity is an important piece of the retirement financing puzzle, and the reverse mortgage is a complement that can help strengthen an overall plan,” says O’Neil. “As the growing body of research by experts like Dr. Wade Pfau and Dr. John Salter shows, the thoughtful use of a reverse mortgage can reduce the chances that a retiree outlives their assets. That is the No. 1 fear of people entering their retirement years, and it is always something that good planners are trying to help their clients avoid.”

ambivalent outlook toward reverse mortgages.

2:56 PM TITLE TIP SPOTLIGHT

CMY

reversereview . com

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The Reverse Review

Your Opportunity Just got

October 2016

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Caring. Driven. Ethical. 18 | TRR

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ORIGINATING

Creating Your A-Team By Harlan Accola

Creating the perfect salesforce for maximum efficiency

N o . 3 : Clerical work This part includes paperwork—interfacing with the client for updated documents, working with underwriters, insurance companies and other thirdparty vendors—and is usually divided between a processor and a loan officer assistant.

letting each person shine in the role that fits them best provides the maximum benefit to the client.

The other issue is efficiency. A loan officer might take 30 minutes to do something that a clerical person could do in 10. Wouldn’t the

reversereview . com

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SPOTLIGHT

N o . 2 : Direct client contact This includes the real duties of a loan officer— explaining the program, taking the actual application, answering questions and objections and helping the customer understand the origination process, the loan itself and the personalized benefits to each client.

We know that this system takes some faith, because there are higher upfront costs. Some companies may be turned off by this or will abandon it before it starts to work. But we have found that this is a system that is not only more efficient than working individually, but also better serves the client— and that is, after all, our highest priority. n

TITLE TIP

N o . 1 : Prospecting Marketing, lead generation, rainmaking—it has been called lots of things. But we call it prospecting, or the work that is done before you secure an actual appointment with a client.

This is how we believe things should work. The marketing loan officer assistant focuses on prospecting—making calls to prospective clients and constantly massaging the lead database. They set appointments for the loan officer to meet potential clients and keep them as busy as they can. The job of the loan officer then is to attend every appointment and follow up with each lead as directed by the sales assistant. Usually a different loan officer assistant takes care of loans in process and continues to interface with the client and the processor. The processor deals with underwriting and all third-party vendors with consistent follow-up from the time an application comes in until it is closed.

APPRAISING

In any loan process, there are three distinct responsibilities and skill sets.

It is interesting that on an appraisal report one of the things that is always mentioned is the “highest and best use.” We think the same concept should be applied to the loan process. Loan officers and their supporting cast should make sure that whatever they do is the highest and best use of their time. We have found that most salespeople are not good prospectors and most good prospectors are not good salespeople. And, the detail-oriented people who excel at clerical work are the best at handling all the paperwork involved with a reverse mortgage loan. We believe that

salesperson be better off spending that time connecting with the next prospect?

ORIGINATING

In my 13 years working as an originator, I have found that teams are more effective than individuals who try to do it all.

Clearly, four people can accomplish these tasks better than one—that seems obvious enough. But of course, cost is the first thing that comes up. If we hire three people, we have to share commission and pay more salaries. That may be true, but at Fairway we believe the benefits outweigh the costs.

The Reverse Review October 2016

20 | TRR

888.272.1214 landmarknetwork.com

APPRAISING

ADVANCE

Navigating the Electronic Appraisal Delivery Portal By John Dingeman

Overcoming the challenges presented by HUD’s new portal

HUD has refined its process with the release of its new Electronic Appraisal Delivery (EAD) Portal. The EAD is now live and some mortgagees and

AMCs have been testing it for the last several months. With this new system in place, all appraisals for new originations must be submitted to FHA through the EAD portal for all FHA case numbers assigned on or after June 27, 2016. ORIGINATING

For those mortgagees that also work in the forward space and submit to the FNMA/ FHLM Uniform Collateral Data Port (UCDP), the process will be familiar, as the portals are nearly identical and are hosted by the same vendor.

APPRAISING

HUD recommends that mortgagees and appraisers familiarize themselves with the EAD by visiting its website for details. There you will find a host of information on data formats and forms, hard stop checks and warning messages, and common appraisal data errors. While HUD has done its best to provide clear guidelines to help users navigate the EAD, there will likely be some challenges for submitting entities (lenders or the lender agents if the AMC is submitting on your behalf), especially when it comes to solving an issue with a transmission deemed unsuccessful.

2. The FHA case number must be at the upper right corner and must correspond with the respective XML label for that field. Appraisers should confirm with their software provider where that is. -The FHA case number may appear in a similar place on other pages, but its inclusion and placement is not a strict requirement. -Case numbers must be formatted as ###-#######. No missing or additional hyphens or spaces and no Automated Data Processing (ADP) codes.

3. The property address, city, state and ZIP code must conform to USPS postal addressing standards. This is a UAD requirement and it is important to note that this does not mean the address matches the address found in USPS. 4. The site size (even for manufactured homes) must meet UAD requirements. Monetary data fields should not include a dollar sign.

6. File sizes of the reports should be less than 4MB. -For those of you who expect crystal-clear photos, or tons of them, be aware that this may present some problems. HUD says these images “need to be legible, but not at the highest resolution.” So find ways to lower the resolution settings on your camera or scanner.

My recommendation is to become familiar with the EAD as much as you can and to work with your AMC and the appraiser in solving these hard stops and messages. Be aware that appraisers do not have access to the EAD or the SSRs and the changes in data formatting requirements may be equally frustrating for them. The EAD portal, FHA’s new Handbook 4000.1, are intended to streamline the FHA appraisal and origination process. Both mortgagees and appraisers must let go of old and outdated requirements and comply with the new ones. Through a collaborative and unified effort, we can overcome this change and prepare for the next. n reversereview . com

8 TRR | 21

SPOTLIGHT

The appraisal report must be in the proper MISMO XML format, and this includes the 1004D Appraisal Update and Completion Report.

TITLE TIP

Here are some things to look out for:

If the retrieved SSR denotes that the transmission of the report is not successful, the appraisal will not be logged into FHA Connection. The issue will have to be solved and doing so can be a challenge. Consider Hard Stop FHA500, for example: “FHA Case Number is missing or provided in an invalid format.” You open the appraisal report and see the FHA case number, so it is not missing. It is 123-4567890; so it is formatted correctly and is the correct number. Well, the system may think it is missing because it is not in the appropriate XML location for that data field. You have no way to identify where that is and no idea where to instruct an appraiser to place it.

The Reverse Review October 2016

22 | TRR

TITLE TIP

LEARN

Signing By a Mark By Megan Hafenstein

When borrowers have trouble signing their name

The borrower must be present in front of the notary l TWO

The borrower must have proper identification l THREE

The borrower must be able to comprehend and communicate clearly that their signature is by their own will and with no concerns as to competency l FOUR

The mark should be witnessed by two persons other than the notary l FIVE

The notary should record journal entry signer’s mark, the witnesses’ signatures and any additional information regarding special circumstances

In some cases, a signer is unable to even make an “x” and in those cases a signature by a proxy may be allowed depending on state law. Some states in which a signature by proxy is allowed are: Florida, Washington, Colorado, New Mexico, Michigan, North Carolina and California. As mentioned, each state may have its own requirements. Please check the applicable state’s laws regarding specific signature by mark procedures. n

Join our conversations or see who is in our network. Join The Reverse Review group on LinkedIn or follow us on Facebook.

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8 TRR | 23

SPOTLIGHT

Some notaries and closing agents may not be familiar with the process of obtaining valid signatures by mark (“x”). Reverse professionals who understand this method will be better prepared to serve their clients’ needs and guide them through the closing process. When this type of situation arises, one can still obtain valid signatures on important loan documents by having the borrower sign by mark. Typically, this is done because of a physical limitation, not because of mental impairments. Although signing a document by mark is allowed nationwide, each state has its own rules, parameters and requirements.

l ONE

Note that witnesses are generally required to attend the signing in order to confirm the signature by mark. Therefore it may be necessary to arrange for additional parties to be present at the signing of any documents. In addition, standard acknowledgement forms for lender security instruments may need to be altered to account for taking an acknowledgment by mark. For instance, a standard acknowledgment form may need to be altered to indicate the signer signed by his or her mark in the presence of the witnesses.

TITLE TIP

use of a power of attorney is not necessary because all 50 states permit an individual to sign his or her name by a mark “x.”

The standard requirements are:

APPRAISING

When this scenario arises, reverse mortgage professionals sometimes believe it is necessary to use an existing power of attorney or have the borrower execute a transaction-specific power of attorney in order to execute the loan. However,

ORIGINATING

Our industry serves the senior citizen community. Unfortunately, as many seniors age, they sometimes have difficulty carrying out everyday tasks such as signing their name. Although their mind remains sharp, they lose the ability to carefully sign their names to important documents.

The Reverse Review October 2016

SPOTLIGHT IN THIS MONTH’S EDITION

WE GET MARKET INSIGHT FROM LEADERS IN THE SPACE.

Industry Insight

Leaders in the reverse mortgage space weigh in on the future of the program.

OCT. 2016 Michael Hild

Kristen Sieffert

COMPANY

Live Well Financial TITLE

Chairman and CEO

COMPANY

AAG TITLE

Executive VP of Retail Lending

INDUSTRY, the leadership of

longtime reverse professionals has helped guide us through the program’s evolution. For insight into the direction of the market, we reached out to leaders in companies across the space, asking them to weigh in on the future of the program and what we can do as an industry to collectively advance the product. 24 | TRR

Finance of America Reverse TITLE

President

Paul Fiore

N THIS SMALL AND EVERCHANGING

Scott Gordon COMPANY

Open Mortgage TITLE

President / CEO WANT TO SEE MORE ARTICLES LIKE THIS?

See them at reversereview.com.

Michael D. Kent COMPANY

Liberty Home Equity Solutions

Michael Hild

To help advance the product, reverse originators can treat customers like they would treat their mom or dad. You have to be willing to walk away from a transaction if it isn’t in the best interests of the consumer. In five years, I think the HECM program will have a better reputation. With the benefit of five years for Financial Assessment to have time to play out, my hope is

TITLE

President

Sherry Apanay COMPANY

Finance of America Reverse TITLE

Chief Sales Officer

that the reputation of the product is elevated. The biggest challenge for the industry right now is the need for Ginnie Mae to make some badly needed changes to the HMBS structure. As it stands, the security has way too many drawbacks and it discourages companies from wanting to continue to securitize after the honeymoon period is over and their portfolios age.

Industry growth is dependent upon HUD’s factor table for principal limits. An enormous number of people want a reverse mortgage but do not qualify because they are short proceeds to pay off their existing first mortgage. I believe in the future success of this program because it meets a fundamental need that folks have and it enables seniors to age in place.

SPOTLIGHT Kristen Sieffert

To help advance the product, reverse originators can continue to work on becoming trusted advisors, and make sure doing the right thing is always at the forefront.

Scott Gordon

To help advance the product, reverse originators can make their own education and the education of others an important part of their workweek. The market for our products already exists and is growing rapidly. What is missing is a broader understanding of

I believe in the future success of this program because I see the market growing, I see the need growing and I see resistance to the product falling. 4

Paul Fiore

To help advance the product, reverse originators can continue to educate consumers and make sure the reverse mortgage fits the needs of the consumer. In five years, I think the HECM program will look different than it does today. History tells us that change is constant in our industry. The biggest challenge for the industry right now is to absorb and implement all of the recent changes while continuing to attempt to reach the audience that is served by the HECM. Industry growth is dependent upon innovation and risk-taking. I believe in the future success of this program because the senior population is grossly underserved by financial products tailored specifically to their needs and demographic trends suggest that these needs will only continue to grow.

The biggest challenge for the industry right now is growth. We need to work with HUD to better align the program and product with the community it needs to serve. Industry growth is dependent upon a better understanding of the product by the community it serves. This requires better outreach and education. I believe in the future success of this program because the product can serve a critical need for those moving from their work life into retirement. 6

Sherry Apanay

To help advance the product, reverse originators can pay attention, know the details that matter and become a resource for seniors and senior advocates. In five years, I think the HECM program will be thriving. It just should. The biggest challenge for the industry right now is fatigue. The business is much harder than it used to be and the scrutiny and regulations just seem to keep coming. Industry growth is dependent upon bringing in new lenders. I believe in the future success of this program because itâ&#x20AC;&#x2122;s still a great product with a growing demographic with a valid need to meet! n

reversereview . com

8 TRR | 25

SPOTLIGHT

I believe in the future success of this program because the program is finally structured in a way that is sustainable and truly supports a borrowerâ&#x20AC;&#x2122;s ability to age in place. Thanks to Financial Assessment there is much less risk of default and associated foreclosure. The fixed-rate, full-draw product put a lot of seniors in precarious positions, where their equity was diminished rather quickly and oftentimes was depleted when they still had 10-plus years of retirement ahead of them. FA and the lending caps, although challenging to implement, were a long overdue blessing for the industry.

Industry growth is dependent upon moving away from the idea that the needs-based model of reverse mortgage is the main, only or best use of a reverse mortgage.

In five years, I think the HECM program will be a more common retirement tool and solution.

TITLE TIP

Industry growth is dependent upon continued focus on ethical and responsible lending, additional investments in education and promoting awareness by the large lenders in the space, and continued enhancements of non-government products that can appeal to a different segment of retirees.

The biggest challenge for the industry right now is bringing additional originators into our market and teaching them to fish in the right ponds. We need to grow the ranks of originators and get them tied in with partners who understand reverse and can drive business.

Michael D. Kent

To help advance the product, reverse originators can expand their referral networks and become more actively involved in community events geared toward seniors and retirement planning.

APPRAISING

The biggest challenge for the industry right now is appealing on a larger scale to a non-needs-based borrower.

In five years, I think the HECM program will be bigger than ever. The market is growing and additional financial planners and Realtors are becoming advocates every day.

ORIGINATING

In five years, I think the HECM program will finally be understood and appreciated for its benefits in the mainstream. Much of the headline risk driven in part by the pre-Financial Assessment, full-draw fixed-rate product should be behind us, allowing the industry to focus more on strategic uses of reverse mortgages and less on fighting the negative stigma many still hold about the product.

all the strategies and uses of the reverse mortgage.

The Reverse Review October 2016

By Jessica Guerin

26 | TRR

There’s no denying that the reverse mortgage industry has recently taken a bit of a hit. Data from Reverse Market Insight shows the half-year endorsement total to be 24,634, suggesting that 2016 is set to be one of the lowest years for endorsements in recent history. Consistent policy change has forced industry players to continually adjust processes, and for some, profits have suffered. Despite this, several lenders are revving up their presence in the space. Undeterred by the market’s current slump, these companies are convinced of the product’s future demand and eager to work with America’s seniors to help them find financial stability in retirement. Their actions highlight a strong belief in the value reverse mortgages can offer to this country’s aging population. Americans are living longer, and the majority express an overwhelming desire to stay in their homes. With rising health care costs, diminishing pensions and little in the way of savings, reverse mortgages are uniquely positioned to provide seniors with a sound solution to help them enjoy financial stability in their golden years.

“It’s all about how hard you are willing to work to build something. The more work you put into something, the more fruit it will bear. That’s what we’re going to do— we’re going to work hard and become a major player in the industry.” BRAD BENNETT

GSF Mortgage BRAD BENNETT

Confident in the HECM’s potential, GSF Mortgage Corporation launched its first branch dedicated solely to reverse mortgages. GSF, which has been offering consumer-direct mortgage loans since 1995, was recently named one of Inc. magazine’s 5,000 fastest-growing private companies, an honor it earned after posting 144 percent revenue growth in the last three years. Looking to expand its reach, GSF saw promise in the HECM. “There are thousands upon thousands of people who are hitting this age bracket every day. We think there is going to be a big draw for this product coming up,” says GSF Regional Manager Frank Papaleo. “We believe in the product. We think it’s a viable one, we think that it’s really an untapped one, and if you have people who know how to structure them and know how to do the upfront work to make sure that it works, there’s certainly something there.” To get the right team of people in place, Papaleo and GSF President Chad Jampedro hired longtime reverse professional Brad Bennett. “We talked with Brad and made the decision to put some time, energy and money into building this out,” says Papaleo. “We were very eager to do that.”

Bennett launched his York, Pennsylvania-based operation in March with a team of six telemarketers. He says 75 percent of their business is self-generated, with his team making a mandatory 250 outbound calls per day. Policy changes like Financial Assessment may have altered the landscape, Bennett says, but he’s studied up on the guidelines and says GSF is right to see promise in the product. “I am one of those guys who reads the rule book at night in bed instead of watching The Walking Dead. So I prepared myself for the curve. I’m not going to say it didn’t affect me, but it didn’t affect me as badly as some people,” Bennett says. “Nothing has really changed about the product; you just have to work a little bit harder to get the same number of loans.” He says he’s looking to expand his branch with loan officers who can work remotely and that his team places a strong focus on personal communication with prospective clients. “You’re dealing with people who grew up in the WWII era, maybe the Great Depression in some cases, where the typical form of communication was a handwritten letter. Our clients appreciate the personal touch of receiving something like that in the mail.” Bennett says joining GSF presented a great opportunity to build something from the ground up, and that he intends to expand his operation down the road. “It’s all about how hard you are willing to work to build something. The more work you put into something, the more fruit it will bear. That’s what we’re going to do—we’re going to work hard and become a major player in the industry.”4

reversereview . com

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The Reverse Review October 2016

Alpha Mortgage GREG GIANOPLUS

“It doesn’t just take one meeting when you’re trying to educate other professionals like Realtors; it’s a slow drip. You’ve got to do the intro and you’ve got to offer workshops, you’ve got to do one-on-one. People don’t get it right away." GREG GIANOPLUS

North Carolina-based Alpha Mortgage also opened its first-ever reverse mortgage branch last March. Headed by Greg Gianoplus, Alpha’s HECM division places a special emphasis on the HECM for Purchase. “Someday I’d like the H4P to be twothirds of our business mix,” Gianoplus says. “The market in North Carolina is so undereducated about the H4P, mostly because the North Carolina Commissioner of Banks does not allow mortgage brokers to participate in the reverse mortgage space, so there are not nearly as many mortgage professionals in North Carolina educating the local markets as there are in competing states.” Gianoplus, whose growing operation consists of five people with licenses in North Carolina, South Carolina and Virginia, says connecting with referral partners is key and that effort requires persistence. “It doesn’t just take one meeting when you’re trying to educate other professionals like Realtors; it’s a slow drip. You’ve got to do

A $10 billion publicly traded company on the New York Stock Exchange, Banc of California was recently named one of the best banks of the country by Forbes. The lender has offered reverse mortgages for several years now, but has committed to expanding its operation in the last six months. Its reverse division is run by Mark Erskine, a former stockbroker who joined the bank three years ago. Erskine says that unlike others in the space, his division hasn’t seen volume dive lately, but that business hasn’t grown in this environment as much as he expected when be expanded his team. He says this is because of recent policy changes, but he believes things will even out and remains convinced of the product’s potential growth. “I believe that, regardless of all the changes that have happened in this industry, the demographics indicate that there is a tremendous amount of need,” he says. “We’ve got a retirement planning crisis on our hands.”

28 | TRR

There are roadblocks to expansion though, which Erskine says are twofold. First, the product’s name doesn’t do the industry any favors. “The HECM is confusing to seniors. It sounds like something you catch, and nobody wants to go in reverse,” he says. “I think we should have renamed this a long time ago. We could have named it the retirement mortgage, so it would simply be the natural thing to do. People would have a traditional mortgage during working years, and then a retirement mortgage when they retire.” The second challenge, which Erskine says is his biggest problem, is finding quality loan officers. “I think we have to create a new breed of loan officers, ones with more of a financial planning background. We need a credentialed sales force,” he says. The key to growth, says Erskine, is changing the way we market the product. “We have to look at this as more of a financial planning tool as opposed to a loan.”

the intro and you’ve got to offer workshops, you’ve got to do one-on-one. People don’t get it right away, even smart people,” he says. “There are so many misconceptions.’ Gianoplus says the reverse-only focus allows his team to be specialists in their field, which provides real value to their clients. “I like being the ear, nose and throat guy in a field full of general practitioners,” he says. “My goal is to become the most trusted and most reputable reverse mortgage lender, providing unparalleled value to all who touch our business and to always be relentless in the pursuit of customer education.” Gianoplus says success in this field requires commitment. “To any professional who makes the decision to get into the space: Go all in. Be committed and be patient. Have a plan and then work that plan,” he says. “This is not a get-in, get-out, make-it-quick type of business—it takes years of tenacious commitment, of service to potential referral partners and to your clients, in order to build a successful business.”

“I believe that, regardless of all the changes that have happened in this industry, the demographics indicate that there is a tremendous amount of need,” he says. “We’ve got a retirement planning crisis on our hands.” MARK ERSKINE

banc of california MARK ERSKINE

Looking Ahead Recent months have been a challenge for many reverse mortgage companies as they work to gain a handle on policy change and struggle to remain profitable under new regulation.

Endeavor America Loan Services MATT KLAUS

The wholesale side is also seeing new entrants. Endeavor America Loan Services launched its first HECM division last spring with a Walnut Creek, Calfornia-based wholesale division. Run by Matt Klaus, Endeavor’s team of 15 locks in a few hundred wholesale loans a month. Klaus says the wholesale side of the business is certainly more challenging in the current market slump, but that he expects things to turn around as the industry gets a handle on the change. “You’ve got more competition for the same number of loans,” he says. “But I think that the market will progress, I think it’s going to get better. FA is changing a little bit and HUD has offered more clarification. I think lenders are starting to feel a little bit more comfortable with how they are underwriting these files. I think we’re going to see origination volume increase in the near future." Klaus says he expects his division to continue to grow as the market expands. “We’re going to continue to slowly scale up. By first quarter of next year, we want to double where we are right now, and we’re looking at bringing on a retail division.”

Reverse Mortgage Counseling

"I think it’s going to get better. FA is changing a little bit and HUD has offered more clarification. I think lenders are starting to feel a little bit more comfortable with how they are underwriting these files. I think we’re going to see some more originations.” MATT KLAUS

Still, dedicated professionals remain exceedingly confident in the HECM’s potential. HUD officials have pledged their commitment to the product, academics and financial experts have extolled the benefits of home equity use, and the demographics paint a convincing picture of future demand. Each of these factors has helped make a compelling case for the success of the reverse mortgage program. Fueled by this promise, lenders across the country are looking ahead with anticipation, channeling their efforts toward growth. n

(888) 383-8885 OPS@QuickCert.org reversereview . com

8 TRR | 29

The Reverse Review October 2016

LAST WORD

REFLECT

The Importance of Partnership By Jim Mahoney

"At the customer level, we must always be thinking about their goals in this transaction, not just ours. The shared experience (i.e., partnering) is one where we understand their issues, concerns and obstacles and work jointly to solve them."

How working together toward a common goal generates the best chance for success This year our industry has been keenly focused on improving customers’ experience. Even the theme

for our upcoming Annual Meeting in Chicago is centered on improving the entire experience.

In keeping with that theme, industry experts have written several excellent articles pointing out the numerous traits and characteristics of successful loan officers and other RM personnel. When The Reverse Review asked me to write the “The Last Word” again, I focused on the use of “Word” in the title and thought of the movie The Graduate with Dustin Hoffman. You probably

remember the scene where one of Hoffman’s neighbors comes to him with career advice and says, “I just want to say one word to you … plastics.” I asked myself if I could actually summarize what we have learned into one word. I decided to take a shot at it. I selected the word “partner” and its derivative “partnership.” (OK, maybe that makes it two words instead of one!) The dictionary defines “partner” as “one who shares in an endeavor” with an associate, and “partnership” as the state of being in “joint interest.” I think the meaningful aspect of these definitions is that it is a “shared” experience with shared goals. It is not, “I sell, you buy”

or “I win, you lose.” When we think of successful teams in sports, it is not individual talents alone that win championships but teamwork, which means shared goals and experiences. Certainly a quarterback cannot be successful without a good line, good receivers and running backs. My guess is if you look back at your life and think of all your successes, they have been a result of partnerships rather than detached relationships. Success in school was assisted by committed teachers; success in sports came because of the one-on-one efforts of a coach, etc. Similarly, a successful loan officer cannot be successful without a good team of processors, underwriters, closers and servicers. In order for the process to be successful, everyone in the chain must share the same goals and work together. At the customer level, we must always be thinking about their goals in this transaction, not just ours. The shared experience (i.e., partnering) is one where we understand their issues, concerns and obstacles and work jointly to solve them. Being empathetic rather than just sympathetic is the true characteristic of a partner. In my experience, our most satisfied customers spoke of the comfort they took in the fact that they felt their loan officer (and processors) was working with them and shared the customer’s success in meeting their goals. In turn, our customers were quite happy that our loan officer made a commission and had a successful career. It may start at the customer level between clients and their LO, but that is just the start. The LO needs to listen to the processor about issues and problems and work jointly to solve them. Too many times, LOs distance themselves from the internal processes for closing a loan and propagate the field versus office mentality. I have no doubt that a partnering mentality at all levels and viewing the process start to finish as a shared responsibility and shared experience, including servicing the loan until it matures and is repaid, yields a much more pleasant experience for everyone involved. And yes, we then close more loans, have more happy customers and have greater financial success, too. I believe “partner/partnership” can work for all of us, and as “The Last Word” maybe we ought to change the title of “reverse mortgage specialist” and “reverse mortgage officer/processor/underwriter/ servicer” to “reverse mortgage partner!” 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 30 | TRR

You are their face of

security.

Financial security and peace of mindâ&#x20AC;&#x201D;thatâ&#x20AC;&#x2122;s what a reverse mortgage can mean. Which is why you should count on your own security and peace of mind with Celink as your reverse mortgage servicer.

celink.com | (844) 228-2101

reversereview . com

8 TRR | 31

The Reverse Review October 2016

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