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INSIDE THIS ISSUE | Mastering the Art of Reverse Mortgage Conversation
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REVERSE review SEP T E M BE R 20 1 5
MEGEN LAWLER SITS DOWN IN OUR HOT SEAT PG. 20
WORKING WITH REALTORS PG. 24
THE NEXT GENERATION OF CRM PG. 27
WHEN THE LAST SURVIVING BORROWER DIES PG. 28
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From the editor RE
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A NOTE FROM JESSICA GUERIN
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INSIDE THIS ISSUE | Mastering the Art of Reverse Mortgage Conversation
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REVERSE review S EP T EMBER 2015
In this month’s issue of TRR, writer Lauren Daniels talks to some of those who were on the ground floor of the HECM’s development. Examining how far the program has come from its early days as an FHA pilot program, Daniels draws anecdotes from the HECM’s earliest supporters, those who recognized immediately the unique value this financial tool could offer America’s seniors.
PG. 20
WORKING WITH REALTORS PG. 24
THE NEXT GENERATION OF CRM PG. 27
WHEN THE LAST SURVIVING BORROWER DIES PG. 28
SENIOR PUBLISHER
Reza Jahangiri PUBLISHER
Erik Richard EDITOR-IN-CHIEF
Jessica Guerin
CREATIVE DIRECTOR
Traci Knight
While the industry has no doubt seen its share MEGEN LAWLER SITS DOWN IN OUR HOT SEAT
Meet the Team
of uncertainty and change, Daniels points out that one constant has been the many people who have remained committed to this
COPY EDITOR
Kersten Deck MARKETING DIRECTOR
Alycia Greer
product through its ups and downs. SEPTEMBER 2015
COVER
Dedicated reverse professionals reflect on the program’s evolution.
While some of the policies guiding the program may have changed, there are hundreds of reverse mortgage professionals who have stood alongside the program, battling public misconceptions and bureaucratic scrutiny, fervent in their belief in its outstanding potential. development of the product, and their commitment to helping seniors find financial security is sure to inspire future generations
JESSICA GUERIN Connect with me about how you can participate. Reach me at jessica@reversereview.com
Advertising Information phone : 630.207.3882 email : jessica@reversereview.com Subscriptions email : information@reversereview.com
These dedicated supporters have played a key role in the
of HECM specialists.
Printer The Ovid Bell Press
Editorial Content email : jessica@reversereview.com © 2015 Reverse Publishing, LLC All rights reserved. Reproductions or distribution of any materials obtained in the publication without written permission is expressly prohibited. The views, claims and opinions expressed in article and advertisement herein are not necessarily those of The Reverse Review, its employees, agents or directors. This publication and any references to products or services are provided “as is” without any expressed or implied warranty or term of any kind. While effort is made to ensure accuracy in the content of the information presented herein, Reverse Review Publishing, LLC is not responsible for any errors, misprints, or misinformation. Any legal information contained herein is not to be construed as legal advice and is provided for entertainment or educational purposes only. Postmaster : Please send address changes to The Reverse Review, 3800 West Chapman Ave., Orange, CA 92868
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8 TRR | 5
The Reverse Review August 2015
Want the best Reverse Mortgage Leads?
Drink from the source. Generating over 100,000 Reverse Mortgage inquiries annually, EPath Digital is the direct source for leads. How do we do it? We utilize large nationwide media buys with web properties that enable us to engage the right 62+ homeowners. Also, we own and operate a content website and magazine targeted to the new 50+ consumer at NowItCounts.com. At EPath Digital we are continually testing and refining our marketing mix based on our clients’ quote and closed loan ratios to create the lowest cost per funded loan possible. Working alongside our clients has enabled us to grow together. Whether you are a top 10 lender, a single state broker, or somewhere in-between, we feel there is still considerable room for you to grow!
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EPath Digital reverse mortgage leads feature: Multiple verification tools to ensure that the information provided by the homeowner is valid We generate our own leads – we do not purchase and resell from other sources The EPath executive team are pioneers in the Internet Mortgage Lead space (dating way back to the 90s) and we understand what it takes to build a mutually successful long term partnership with our clients
Call 800-695-3976
Visit us at: epathdigital.com 6 | TRR
®
table of contents
TRR 9.15
11 | Industry News
24 | Originating
REVERSE MORTGAGE DAILY
Educating our partners about HECM for Purchase has its challenges and its rewards.
13 | Stats
TIM LINGER
Headlining stories of the past month
July’s top lenders and HECM endorsement stats through June
28
Working with Realtors
27 | Tech
REVERSE MARKET INSIGHT
Sales Automation: The Next Generation of CRM
16 | NRMLA News
How new technology can help create better results
Read about the association’s current initiatives. MARTY BELL
JOHN McGEE
28 | Servicing
19 | Roundup
A collection of recent facts and surveys affecting the reverse market
20 | Hot Seat
When the Last Surviving Borrower Dies How recent policy change has impacted the servicing process JASON PEREZ
30 | Spotlight
Megen Lawler
38
Founder of Bay Docs
Mastering the Art of Reverse Mortgage Conversation
22 | Originating
How to effectively explain the loan and converse with potential clients
Changing Lives
Witnessing the benefits of a reverse mortgage
BILL SMITH
MICHELE KOLE
38 | Last Word
Celebrate “HECM With Dignity!”
22
27
Recent policy changes have given the industry a reason to rejoice. ATARE E. AGBAMU
FEATURE
34 | Feature The Pioneers A personal look at the early days of the reverse mortgage program LAUREN DANIELS
“What began in the summer of 1989 as a pilot program with a limited run of 2,500 loans became a full-fledged, multimillion-dollar industry... Despite the ups, downs, acquisitions and regulations, the one constant is the people who remain committed to the product’s sustainability and growth.
IN EVERY ISSUE...
09 | MOVERS AND SHAKERS The latest developments in companies across the reverse space
YOU CAN DO IT!
send us your company news. REACH OUT TO US ABOUT WRITING FOR TRR. INFO@REVERSEREVIEW.COM
reversereview . com
8 TRR | 7
The Reverse Review August 2015
contributors JOHN K. LUNDE
MARTY BELL
MEGEN LAWLER
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
Marty Bell is NRMLA’s senior vice president of communications and marketing. This is Bell’s professional Act III after careers in books, journalism and the Broadway theater. Bell is the author of two novels and four nonfiction books, and his writing has appeared in publications including Playboy and New York magazine. Bell wrote and produced the award-winning documentary film The Boys of Summer and produced 15 Broadway shows (including Ragtime, Fosse and Dirty Rotten Scoundrels) that won 27 Tony Awards.
Megen Lawler has been in the reverse mortgage industry since 1991 and founded Bay Docs, Inc. in 1994. Prior to Bay Docs, Lawler was an integral part of the development of the Home Equity Reverse Mortgage product origination, servicing and quality control procedures. Bay Docs launched its loan origination system in 2008 to work in conjunction with its reverse mortgage document processing services.
13 | Stats g
John K. Lunde
Marty Bell
Megen Lawler
MICHELE KOLE
22 | Changing Lives g
Michele Kole
Tim Linger
John McGee
Michele Kole is a reverse mortgage specialist with Golden Equity Mortgage, the reverse mortgage division of Land Home Financial Services. With more than 25 years of experience as a lending professional in San Diego, Kole transitioned from forward to reverse lending after her parents’ lives were dramatically changed by a reverse mortgage.
JASON PEREZ
28 | When the Last Surviving Borrower Dies g
Jason Perez
Bill Smith
Atare E. Agbamu 8 | TRR
Jason Perez serves as vice president of loan administration at Celink. He has managed many different servicing functions, including default and foreclosure operations, new loan boarding and assignments to HUD. He has been a part of Celink’s major growth and has helped navigate his servicing team through many program changes. In his spare time he is an avid cricket player, lacrosse coach, yo-yo instructor and self-proclaimed (retired) rockand-roll frontman.
16 | NRMLA News g
20 | Hot Seat g
TIM LINGER
JOHN McGEE
Tim Linger is a certified reverse mortgage professional, a certified real estate instructor and a certified senior advisor. Linger has been providing retirement advice for more than 20 years, focusing exclusively on reverse mortgages for more than 15 years. Linger is the broker/owner of 1-866-REVERSE Mortgage. Located in Orlando, Florida, his company has a staff of 16 loan officers and support personal.
As the president of OptifiNow, John McGee leads the company’s vision, strategy and growth. McGee founded OptifiNow to solve a common problem of enterprise customers: the shared struggle of managing national and global sales teams with brandand legal-compliant messaging. The result is a software platform that delivers a complete suite of customer engagement solutions for its clients.
BILL SMITH
ATARE E. AGBAMU
24 | Working With Realtors g
30 | Mastering the Art of Reverse Mortgage Conversation g
Bill Smith works for Reverse Mortgage West in Irvine, California. He began his reverse career with Financial Freedom in 2002 and has since originated more than 600 reverse mortgages. While at Financial Freedom, he pioneered efforts on seminar selling, fiduciary support and assisting conservators who want to obtain HECMs for their clients. Smith has lectured on reverse mortgages across the country and has been a speaker at NRMLA conferences, FPA chapters and the National Guardianship Association.
27 | Sales Automation: The Next Generation of CRM g
38 | Celebrate “HECM With Dignity!" g Author and reverse-mortgage reformer Atare E. Agbamu fought successfully for unconditional HECM non-recourse and for protection for HECM nonborrowing spouses. A former industry executive, he is the author of ThinkReverse and more than 250 articles on reverse mortgages.
movers & shakers READ ABOUT THE LATEST DEVELOPMENTS IN COMPANIES ACROSS THE REVERSE SPACE.
HAVE A COMPANY UPDATE YOU WOULD LIKE TO SEE PUBLISHED? Celink Names New CFO Celink has hired Ronda McCoy as chief financial officer. McCoy, who has 20 years of financial and accounting experience, is a CPA with an MBA from Western Michigan University and a B.A. in accounting from Michigan State University. According to the servicer, client loan portfolio growth, coupled with escalated inquiry and interest in the reverse mortgage space, have led the company to increase their investment in accounting, operations, compliance and IT talent.
ReverseVision Adds Credit Report Integration to Reverse Mortgage LOS Platform
ReverseVision has added automated credit reporting capabilities to RV Exchange (RVX), its flagship reverse loan origination system platform. Through this integration, lenders will be able to automatically import a borrower’s credit information directly into RVX’s Financial Assessment module. This functionality will allow users to pull borrowers’ credit reports from a number of providers and have the data automatically populate into the credit report fields.
Reverse Mortgage Funding Hires Michael J. Wyrostek as Regional Manager
Reverse Mortgage Funding has hired Michael J. Wyrostek as regional account
email it to jessica@reversereview.com
manager for the Midwest region, a position that supports RMF’s third-party origination sales channel. Wyrostek will be based in Chicago and will report to National Sales Leader Mark O’Neil. Previously, he oversaw the reverse division for Mortgage Services III and worked as business development manager for Financial Freedom, where he educated financial professionals about reverse mortgages.
Firstbank Hires New Originators to Growing Team Firstbank has hired a number of new originators to its growing reverse team. The new hires are former originators with North American Savings Bank, which recently exited the space. The team includes: Pete Mendenhall, CRMP; Mark Clark, CRMP; Tim Burchett; Tim Crawford; Hal Edwards; and Phil McLeod.
acquisition of Maverick Funding and several branches of Great Plains National Bank.
Churchill Mortgage Announces New Hires To support its continued growth, Churchill Mortgage has hired 22 new employees at its branches in Arizona, California, Michigan, Tennessee, Texas, Virginia and Washington. The lender, which provides conventional, FHA, VA and USDA residential mortgages across 33 states, has added nearly 80 industry experts since January.
Home Point Financial Announces New Hires Home Point Financial has hired Ty Kern as senior managing director of production acceleration and Joan Cavanagh as director of product standards. Kern, who will be based in California, will focus on identifying and integrating production expansion opportunities for the Home Point platform. Cavanagh, who will be based in New Jersey, will focus on growing opportunities for condominium mortgages and related service improvements for sales and operations. In April, Home Point announced its
We want your company news! Be a part of our Movers & Shakers column, where you can read about the latest company initiatives, programs, hires, acquisitions and more. Send us your company’s press releases or email us news of your latest venture, and we’ll consider printing it in the next issue. Send your news to jessica@reversereview.com. reversereview . com
8 TRR | 9
The Reverse Review August 2015
WORK WITH THE INDUSTRY’S ONLY PORTFOLIO LENDER
AND DISCOVER THE RMF DIFFERENCE. Partner with Reverse Mortgage Funding LLC (RMF), and be confident that you’ll get highly competitive pricing—and that your borrowers will receive industry-leading service and support throughout the life of the loan. From origination through servicing, our experienced and knowledgeable team maintains a consistently high level of service and attention to detail. Your customers—and your reputation—deserve nothing less.
To learn more, visit partners.reversefunding.com or call 877.820.5314 (option 5) © 2015 Reverse Mortgage Funding LLC, 1455 Broad St., 2nd Floor, Bloomfield, NJ 07003. NMLS ID # 1019941. Not for consumer use. L158-Exp042016 RMF14259-0415
10 | TRR
industry news
September Update AN UPDATE OF THIS PAST MONTH’S BREAKING NEWS
The industry’s headlining stories at your fingertips UP-TO-THE-MINUTE NEWS? Visit reversemortgagedaily.com
NEWS DIRECT TO YOU: WANT EVEN MORE
HEADLINING NEWS HUD READIES LENDERS 1. FOR ONLINE APPRAISAL PORTAL HUD has begun its onboarding of lenders to its Electronic Appraisal Delivery (EAD) portal. The portal, which has long been in the making, will be bringing appraisals—including those for reverse mortgage loans—online for full implementation in June 2016. HUD is offering seven on-boarding phases through its FHA Connection system. “A Web-based technology that enables mortgagees to electronically transmit appraisal data and reports to FHA prior to loan endorsement, the EAD portal promotes quality up-front appraisal data,” HUD writes in a notice. “This, in turn, reduces post-endorsement appraisal data corrections, and makes it easier for mortgagees and others to do business with FHA.” The technology will be available from FHA to lenders for free.
// August 11, 2015
2. NATIONSTAR BUYS $4.9 BILLION GENERATION REVERSE MORTGAGE SERVICING PORTFOLIO Nationstar Mortgage Holdings has acquired a portfolio of reverse mortgage servicing rights from Generation Mortgage following Generation’s exit from originations and subsequent winddown. Nationstar paid $192 million to Generation Mortgage and received reverse mortgage net assets valued at $233 million, comprising $4.9 billion of unpaid principal balance assets and $4.6 of assumed liabilities, according to
Nationstar’s most recent filing with the SEC. Generation, a longtime originator of reverse mortgages, announced in October 2014 it would be exiting originations and winding down its reverse mortgage business.
// August 3, 2015
3. URBAN PARENT BUYS BIG INTO FORWARD ORIGINATIONS MARKET The owner of top-10 reverse mortgage lender Urban Financial of America is making a major play into the forward lending space through acquisitions. Finance of America Holdings, a Blackstone (NYSE: BX) portfolio company, has completed the acquisitions of several companies: Gateway Funding Diversified Mortgage services, Pinnacle Capital Mortgage, and certain assets and operations of PMAC Lending Services. Finance of America Holdings owns Urban Financial following its $80 million sale in 2013. The acquisitions make the holding company one of the largest non-bank originators in the country, with licensing in more than 45 states. The lending services span retail, wholesale and correspondent operations, as well as servicing capabilities, and will include 300 retail lending branches, and five wholesale and correspondent centers. Urban Financial of America has long held a position among the country’s largest reverse mortgage lenders by volume via its wholesale lending unit. The company has also ramped up retail operations of late and has expanded its branch network nationwide.
4. ILLINOIS GOVERNOR SIGNS REVERSE MORTGAGE PROTECTIONS ACT INTO LAW Illinois Governor Bruce Rauner (R) has signed a bill that creates a series of reverse mortgage protections for borrowers. Effective January 1, 2016, Senate Bill 1440, also known as the Reverse Mortgage Act, includes several provisions that require lenders and the Illinois Office of the Attorney General to provide certain reverse mortgage disclosures to prospective borrowers. The act also implements a three-day “cooling-off” period, during which time a potential borrower cannot be required to close or proceed with the loan. On the law’s disclosures piece, the Office of the Attorney General can develop the content and format of educational documents that provide independent consumer information regarding reverse mortgages, including potential alternatives to these loans and the availability of independent counseling services. With this act, Illinois joins California and Connecticut by enforcing a cooling-off period for prospective borrowers.
// August 11, 2015
// August 10, 2015
reversereview . com
8 TRR | 11
The Reverse Review August 2015
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NMLS #1025894
stats July 2015
Top Lenders Report
12345 American Advisors Group
Endorsements
UFA
RMS/S1L
Endorsements
Endorsements
478
389
1,256
Liberty Home Equity
One Reverse Mortgage
Endorsements
Endorsements
370
333
Lender Endorsements REVERSE MORTGAGE FUNDING LLC
251
Lender Endorsements
LIVE WELL FINANCIAL INC
177
AMERICAN NATIONWIDE MORTGAGE COMPANY 15
PROFICIO MORTGAGE VENTURES LLC
111
BANK OF ENGLAND
NET EQUITY FINANCIAL INC
99
PEOPLES BANK 13
HOME POINT FINANCIAL CORPORATION
88
SOUTHERN TRUST MORTGAGE LLC
13
HIGH TECH LENDING INC
77
LENOX FINANCIAL MORTGAGE CORP
12
CHERRY CREEK MORTGAGE CO INC
54
BANC OF CALIFORNIA
12
OPEN MORTGAGE LLC
52
BANNER BANK 11
UNIVERSAL LENDING CORPORATION
15 13
UNITED NORTHERN MORTGAGE BANKERS LTD 50
CBC NATIONAL BANK
11
PLAZA HOME MORTGAGE INC
44
FIRST PRIORITY FINANCIAL INC
11
43
SUN AMERICAN MORTGAGE CO
11
FIRSTBANK 40
US MORTGAGE CORPORATION
11
MCM HOLDINGS INC
38
UNITED MORTGAGE CORP
11
SYNERGY ONE LENDING INC
38
GATEWAY FUNDING
10
SUN WEST MORTGAGE CO INC
32
MANN MORTGAGE LLC
10
THE MONEY STORE
32
EVOLVE BANK & TRUST
10
ADVISORS MORTGAGE GROUP LLC
32
DOLLAR BANK FSB 9
UNITED SOUTHWEST MORTGAGE CORP
30
FIRSTAR BANK 8
THE FEDERAL SAVINGS BANK
TOWNEBANK 27 RESOLUTE BANK 22 NATIONWIDE EQUITIES CORPORATION
22
M & T BANK
21
Brought to you by:
MORTGAGESHOP LLC 20 NORTH AMERICAN SAVINGS BANK
20
GMFS LLC 19 FAIRWAY INDEPENDENT MORTGAGE CORP
19
AMERICAN PACIFIC MORTGAGE
17
FRANKLIN FIRST FINANCIAL LTD
16
LAND-HOME FINANCIAL SERVICES
16
MONEY HOUSE INC
16
%%%%% LOOKING FOR MORE STATISTICS? Go to rmsinsight.net for all of the industry’s latest stats and rankings. reversereview . com
8 TRR | 13
The Reverse Review August 2015
The value of A STRONG ALLY:
Direction.
The Reverse Mortgage landscape can be unforgiving and is ever-changing. The clear path today can take you in the wrong direction tomorrow. Celink has successfully guided its clients and the servicing industry through over a dozen HECM program changes in the past 18 months.
For more information, please contact Katie Kirkham, Director of Client Relations at (844) 228-2101. 14 | TRR
celink.com | (844) 228-2101
stats HECM Endorsement Stats Through June 2015 INDUSTRY SUMMARY
MO. 7
2,319
Retail Endorsement Growth
8
1,944 -16.17%
1,306 -26.3%
3,250 -20.56%
TRAILING TWELVE MONTH ENDORSEMENTS 5,000
3,000
Wholesale Endorsement Growth
29.62%
2,000 1,000
Total Endorsement Growth
24.0%
Wholesale *Numbers Represent Months
01
UNITS CHG%
4,091
1.43%
1,772
-1.66%
9
2,248 15.64%
1,514 15.93%
3,762 15.75%
2,773 23.35%
2,078 37.25%
4,851 28.95%
11
2,500
-9.84%
1,907 -8.23%
4,407
12
2,867 14.68%
1
2,874
2
2,557 -11.03%
3
2,772
8.41%
4
2,597
-6.31%
1,895
5
2,477
6
* Figures Above Reflect Change from Prior Month
TOT
0.24%
-9.15%
4,940 12.09%
8.7%
2,073
2,062 -0.53%
4,936
-0.08%
4.7%
4,716
-4.46%
1,862 -13.76%
4,634
-1.74%
1.77%
4,492
-3.06%
-4.62%
1,793 -5.38%
4,270
-4.94%
2,971 19.94%
2,324 29.62%
5,295
24.0%
2,159
30,899
22,745
53,644
60% 50%
FIXED RATE PERCENTAGE
40% 30% 20%
6/1/15
5/1/15
4/1/15
3/1/15
2/1/15
10/1/14 10/1/14
1/1/15
9/1/14 9/1/14
12/1/14
8/1/14 8/1/14
11/1/14
7/1/14 7/1/14
5/1/14
4/1/14
2/1/14
12/1/13
11/1/13
6/1/14
02
6/1/14
ARM
{ FIGURE }
10/1/13
9/1/13
8/1/13
10% 6/1/13
HECM ENDORSEMENT TRENDS
UNITS CHG%
-3.9%
70%
{ FIGURE }
7/1/13
Retail
TOTAL
10
1/1/14
7 8 9 10 11 12 1 2 3 4 5 6
3/1/14
0
WHOLESALE
UNITS CHG%
19.94%
4,000
RETAIL
FIXED
$1,200.0 $1,000.0
$600.0 $400.0 $200.0
6/1/15
5/1/15
4/1/15
3/1/15
2/1/15
1/1/15
12/1/14
11/1/14
5/1/14
4/1/14
3/1/14
2/1/14
1/1/14
12/1/13
11/1/13
10/1/13
9/1/13
8/1/13
7/1/13
$0 6/1/13
IN THE MILLIONS
HECM ENDORSEMENT
INITIAL PRINCIPAL LIMITS
$800.0
reversereview . com
8 TRR | 15
The Reverse Review August 2015
nrmla news BROUGHT TO YOU BY MARTY BELL
ON THE WEB:
Introducing the new nrmlaonline.org RM PR:
Nrmlaonline.org has undergone a complete makeover. In addition to being more visually attractive, the informational resources that are provided for your benefit—industry news, statistics, regulations, legislation (state and federal) and back issues of Reverse Mortgage magazine and electronic communications—have been organized in a more user-friendly way. As members, please explore the site and offer recommendations on further enhancements. Members must log in with a username and password to access some of the material, just like on the old site. On some browsers, when submitting your username and password, you may be required to verify this information a second time.
TRAFFIC TO CONSUMER SITE AV E R A G I N G 3 3 K Midway through 2015 traffic to NRMLA’s consumer site, reversemortgage.org, averaged 33,141 unique visits—a 20 percent rise from last year. Monthly site visits averaged 28,259 visits in 2014 and 19,561 visits in 2013. A record 36,249 unique visitors utilized the site in January. 16 | TRR
THIS IS JENNY
The More People Learn, the Less Cynical They Become By Jenny Werwa, Director, Public Relations
Last week, while chatting with my neighbor, he looked at me seriously and asked, “What’s the deal with reverse mortgages? Are they a scam?” Suddenly, I was standing on the sidewalk listing the benefits of these loans that have helped so many seniors to enjoy their retirement while living in their own home. His response? “I always figured I’d eventually leave my house to my daughter, but this is something worth considering. Thanks.” I’m willing to bet that every person in our industry has had a similar conversation with their neighbor, friend or family member at least once since they became associated with reverse mortgages. Fortunately, the more people understand about reverse mortgages, the less cynical they become about their usefulness. It’s this perfectly indirect correlation that drew me
to the public relations job opening at NRMLA where the goal is clear: improve the reputation of the industry by educating more people about the product. Soon after I accepted the job, I was presented with NRMLA’s PR plan, which had been approved by the Board of Directors and outlines a healthy framework for our external communications efforts. From the moment I set foot in the Washington office, I was on a path to implement the plan. With the theme of “Help More People,” NRMLA is working to promote the benefits, safety and efficacy of reverse mortgages to the media, consumers and professionals who work with potential borrowers such as financial planners, elder law attorneys and Realtors. We’ll take a number of different approaches to reach these audiences, with the most comprehensive being our Reverse Mortgage Education Week to run in
April 2016. Information about Education Week and ways to get involved will be posted to NRMLA’s LinkedIn Group: linkedin.com/groups/ National-ReverseMortgage-LendersAssociation-3792357. NRMLA’s PR committee is also working to develop fact sheets and talking points that can help dispel common myths about reverse mortgages. We’ll use these mythbusting tools in response to inaccurate media coverage and make them available on our member site, nrmlaonline.org, and our consumer site, reversemortgage.org. While no outreach can take the place of informative one-onone conversations with potential borrowers, NRMLA is committed to strategically disseminating positive messages about the usefulness of reverse mortgages for older adults as they plan for and enjoy their retirement years.
nrmla news O N T H E D O C K E T:
Castro’s HUD Laser-Focused on Creating Opportunity In a public celebration of the past and the future on Monday, July 27, the staff of the Department of Housing & Urban Development used the one-year anniversary of Secretary Julian Castro’s appointment to launch a report entitled “A Year of Progress: Building a Strong HUD for the Next 50 Years,” and to speak to stakeholders about its overarching goal of opening the gates of opportunity. In a moving presentation featuring citizens who have benefited from HUD housing programs and senior staff, including a speech by the secretary, there was lucid commitment to improving lives by improving mobility and lessening the great disparity in access to good neighborhoods. Statistics presented showed that the opportunity for intergenerational mobility is lower now in the United States than in any of the other eight most industrialized nations, and that the opportunity for an
NEW MEMBERS
NRMLA welcomes the following new members.
African-American child to progress out of a bad neighborhood is less than half of that of a white
4
child. “Place matters,” was the event’s dominant mantra. “Opportunity in America should not be a luxury,” said Secretary Castro. “When we invest in people, we invest in our country’s future.”
1st Choice Mortgage Company Meridian, Idaho
The Blog Squad in Action
IF YOU’D LIKE TO JOIN US IN our
effort to promote the facts about reverse
mortgages as a member of NRMLA’s Blog Squad, please email Jenny
Reverse Mortgage Corporation Reisterstown, Maryland SecurityNational Mortgage Company Cottonwood Heights, Utah
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When Yahoo! Finance and dailyfinace.com re-ran a column from MoneyTalksNews that lists reverse mortgages among its 9 Dumb Ways to Borrow Money, the Blog Squad responded with the facts. Celink’s Mary Katherine Quasarano wrote:
Quasarano also commented on a positive bankrate.com Retirement Blog post that features an interview with Peter Bell to applaud the author for her unbiased reporting. “The caring, empathic and ethical professionals in the reverse mortgage industry thank you for sharing a fact-based, informative story,” wrote Quasarano.
Lakeville, Massachusetts
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On July 2, Blog Squadder and Certified Reverse Mortgage Professional Dan Hultquist, of Open Mortgage, commented on a piece published in the Huffington Post to clarify that reverse mortgage borrowers can in fact take the mortgage interest deduction for any interest paid on their loan.
Brick Road Mortgage
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When negative or inaccurate news stories appear, NRMLA’s Blog Squad immediately responds. During the month of July, the Blog Squad responded to three articles.
“Reverse mortgage industry professionals have worked vigorously alongside HUD, and in response to CFPB comments, to refine the HECM product and further protect its borrowers. HECM reverse mortgages have always included borrower protection safeguards and the HECM reverse mortgage product promoted today has rigorous consumer protections including housing counseling, a financial assessment requirement to ensure that borrowers can afford the loan, and a right of rescission after loan signature. Reverse mortgages are a safe retirement funding tool whose benefits continue to be miscommunicated and misunderstood because of misinformation like this article.”
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IN THE PRESS:
Skyline Home Loans Calabasas, California
Werwa at JWERWA@DWORBELL.COM. reversereview . com
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The Reverse Review August 2015
18 | TRR
roundup
THIS MONTH H O ME P RICE S
A LOOK AT THE NEWS AND STATS AFFECTING THE MARKET GET UP-TO-DATE retirement facts, home price stats, senior trends and HECM market developments in The Reverse Review’s monthly Roundup.
The housing market shows signs of continued recovery.
{
{
T H E SE N IOR AGENDA
MANY OLDER AMERICANS SAY THEY PLAN TO WORK IN RETIREMENT.
According to a study by Transamerica, 82 percent of aging adults say they plan to work past age 65 or don’t plan to retire at all.
SURV EY S A Y S
RET IREMENT FAC T S
POLL REVEALS THE WORRIES OF AGING AMERICANS.
PHOENIX RANKS NO. 1 AMONG RETIREMENT DESTINATIONS.
The 2015 United States of Aging Survey polled 1,650 adults over 60 about their top concerns. Among their biggest worries:
28%
24%
cite an increase in the cost of living
cite unexpected medical expenses
When it comes to housing, many express a desire to stay put.
58%
75%
have lived in the same residence for more than 20 years
say they intend to live in their current home for the rest of their lives
In a survey of the nation’s best retirement locations, bankrate.com examined weather, cost of living, crime rate, health care quality, tax burden, walkability and senior wellbeing to determine the best places for seniors to settle down. 6
5
NUMBER CRUNCH
8 1, 3, 4
7
10
2. A rlington/Alexandria, Virginia 3. Prescott, Arizona
“The aging of the baby boomers means that senior housing issues are becoming much more pressing, just because of the sheer number of boomers. In particular, a growing body of research shows the link between housing and health. Moving forward, policy should emphasize home modification so houses are safe, healthy, and efficient for seniors to live in.” –The Urban Institute
J UNE 201 6 $236,400 MEDIAN SA L E S PR I C E
2
1. Phoenix, Arizona
WOR D O N TH E S T RE E T
The national median sales price reached an all-time high in June, according to the National Association of Realtors, landing 6.5 percent higher than June 2014 prices and exceeding the previous peak of $230,400 in July 2006.
4. Tucson, Arizona 5. Des Moines, Iowa 6. Denver, Colorado 7. Austin, Texas 8. Cape Coral, Florida 9. C olorado Springs, Colorado
4 million
U.S. homeowners owe the bank at least 20% more than their homes are worth. -Zillow Negative Equity Report
10. Franklin, Tennessee reversereview . com
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The Reverse Review August 2015
THE
REVERSE review
THE
S EPT EMB ER 2015
Before I entered the reverse mortgage industry, I was an analyst for Putnam Mutual Funds in Boston, Massachusetts.
Megen From her favorite movie and her first car to her thoughts about the reverse FOUNDER Bay Docs
20 | TRR
mortgage market, we get the facts from Megen Lawler, founder of Bay Docs, in his month’s edition of The Hot Seat.
personal >
Something nobody knows about
>
me is when I was a senior in high
local pharmacy.
school, I interviewed Mother Teresa for my school newspaper. She was very
>
lucky.
treat people with respect and that in
My favorite vacation was a cruise
best thing they taught me was if I want
return, people will respect me. But the
to the Caribbean with my family when
to get something done, it’s up to me to
I was 18. Although I got sunburned so
see that it happens.
badly on day one that I had to stay out of the sun for the majority of the trip, it
>
parents, three sisters and brother.
>
My first car was a Honda Accord.
It was a road warrior, taking me from
>
things will change. >
someone for a day, I would choose
The craziest thing I’ve ever done
think it would be a very eye-opening
any president of the United States. I experience. >
If I had three wishes they would be
well to that culture. And who doesn’t
a billion dollars (of course, I’d be
love a cool poodle skirt with bobby
extremely philanthropic) and a cure for cancer. My favorite movie is The Sound
of Music. I watch it every year and it
socks and saddle shoes?
professionAl >
People should seek a career in because it can be a very rewarding
my youth and my family. I’m so happy
product for seniors. A reverse
I can still enjoy it with my parents and my own kids.
mortgage can substantially change
I never miss an episode of...
to do things. Who wouldn’t want to be
their lives and give them the freedom
Admittedly, I’m a TV addict! With
a part of that?
On Demand I am now a true bingewatcher. I have for sure never missed an episode of Game of Thrones, House of Cards, Breaking Bad, The
>
Technology’s role in the industry is major. Providing originators with
tools that can help them speed up
Newsroom… I could go on and on!
the process, reduce errors, better
When I was younger I wanted to
stay industry-compliant is a major
be a nun, and then a mom of 10 kids, although I stopped at four.
ional If I were a pr ofeslds be at hlete, I wou nis a U.S. O pen ten player.
the reverse mortgage industry
always brings back great memories of
>
If I could time travel, I would go
back to the ’50s. I seem to relate very
for a healthy life for my entire family,
>
If I could trade places with
San Francisco to Boston three times!
write about in The Reverse Review!
>
The best lesson I’ve ever learned
If I could time travel, I would go back to the ’50s. I seem to relate very well to that culture. And who doesn’t love a cool poodle skirt with bobby socks and saddle shoes?
burn bridges—you never know when
was certainly not something I would
>
fact
was to be kind to everyone and don’t
If I were a professional athlete, I
would be a U.S. Open tennis player. >
My favorite time of the day is night, after the children go to bed.
was just an amazing vacation with my
>
My parents taught me how to do
fun s
things for myself. They taught me to
interesting. I felt incredibly blessed and
>
My first job was as a clerk in the
communicate with their clients and benefit!
I am optimistic about the reverse mortgage industry because I strongly feel that many of the players in the industry have the borrower’s best interests at heart. I am pleased when I hear that decisions are made to benefit others, even at a cost to the originator.
reversereview . com
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The Reverse Review August 2015
ORIGINATING
RR
WITNESS
RR
RR
Changing Lives By Michele Kole
Witnessing the benefits of a reverse mortgage Originating a reverse mortgage is a special privilege I don’t take lightly. Why? Because my clients have told me that this loan changed their lives. I spent 25 years in traditional forward mortgage lending and no one ever told me, “This loan changed my life.” This simple statement is powerful, and it has given my work a whole new meaning. Despite the bad press and misinformation that lingers, in my experience, people who have been properly counseled about all of their financial options prior to getting a reverse mortgage become raving fans. I believe this is because the loan expands the financial options that people often lose when they reach retirement age. It removes uncertainty about cash flow, allowing people to enjoy the freedom to remain independent for a longer period of time in the lifestyle of their choosing. I have discovered one common thread among people who love their reverse mortgages.
* They worked with knowledgeable professionals.
*T hey were presented with all of their options from the start.
* They received helpful counseling. *T hey decided that a reverse mortgage was the right decision.
These stories of real people (only the names have been changed) are wonderful reminders of why so many people love their reverse mortgage. 22 | TRR
MY MOM Emotional upheaval, sadness and uncertainty describe the day of Dad’s stroke. Our family mustered the strength to decide on the right nursing home, one close enough for daily scheduled visits from a family member. But the toughest decision involved finances—how to pay for Dad’s care and make sure Mom would be OK. Dad had retired from civil service and had adequate health insurance and a good pension. However, the $5,000 monthly nursing home bill was a budget buster. Our family home of 45 years was free and clear and would be easy to sell. But Mom’s health and happiness was every bit as important as paying a debt. We needed a better option. Someone suggested that we look into a reverse mortgage. I was not familiar with reverse mortgages at that time. Good advice from experts in the field convinced me that it was the right choice. Mom would use the line-of-credit option to pay the monthly nursing home bill. As I sat with her through the counseling appointment, we became fully satisfied with her choice to move forward. When escrow closed, she was worry-free about paying for Dad’s care. Dad passed after two years in the nursing home, but the comforting part is that we can still feel his presence in the family home we didn’t have to sell. At 90 years young, Mom is independent, healthy and happy in the home she loves. She no longer needs monthly payments from her reverse mortgage, and the line of credit continues to grow so more cash is available, should she need it. She tells me frequently, “Thank you, Michele. My reverse mortgage was such a good decision!” It was this personal experience with my mom’s reverse mortgage that made me want to change my career from a forward mortgage professional to an exclusively reverse mortgage originator. Her reverse mortgage changed my life, too!
ORIGINATING
JENNY
John, a commercial loan broker, frequently listened to my elevator pitch and brief presentations in our networking group. Over the months, he shared that his mom had a reverse mortgage and loved it. So when he and Sara decided to explore their options regarding whether he should retire early or continue working to pay their hefty mortgage, he called me. They briefly thought of selling, but with their only son returning from college they wanted to keep the family home for a while longer. Sara was 63, and John was a couple of months away from the magic age of 62. We worked out the numbers and decided to close their reverse mortgage shortly after his birthday.
Carol and Frank own a beautiful older home in a prime area with an expansive eastern view overlooking a yacht club, large bay and downtown skyline. Received by inheritance and without a mortgage, it made sense to consider a reverse mortgage for upgrades and some desired property additions. Their CPA is a mutual friend and told them to call me when they asked about a reverse mortgage.
Jenny is an 80-year-old widow and musician. Her financial planner told her to call me months ago. She resisted calling until her best friend told her about how her reverse mortgage was allowing her to travel and enjoy life. Jenny got tired of hearing what she was missing, realized she was just paying bills and making ends meet, and called me. It’s not that she doesn’t have enough money saved or a good income from her pension, she told me clearly: “I just want to have fun!”
Including adult children in the process is extremely important to the homeowner. Inheritance issues must be addressed to give our clients complete peace of mind about taking a reverse mortgage. When possible, I encourage family or interested parties to meet in my office, and I take their phone calls at any point in the process. In this case, Jenny had her daughter present at her counseling session. I hear she’s very happy now with her mom’s decision. Jenny is looking forward to a cruise with her best friend and extra cash to put the fun back in her life!
Making a Difference These examples emphasize the fact that there are many individuals out there whose lives have been improved by a reverse mortgage. Lots of people thoughtfully choose to take this loan for many different reasons, and they often feel strongly about how much a reverse has helped improve their quality of life. As a reverse professional, witnessing the positive impact my work can have on others is a wonderful thing. n
Be a part of the conversation.
-
Share your ideas with your colleagues and be a part of the solution. Reach out to us at info@reversereview.com.
reversereview . com
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SPOTLIGHT
Without a huge mortgage payment, they have freed up cash flow so John can postpone his Social Security benefits until he’s 70, retire completely or work part time. Since they are both in their early 60s, their expensive home will likely retain sufficient equity should they decide to sell. John tells me that if they move, they will probably buy the next home with a reverse mortgage. John and Sara’s reverse mortgage expanded their options to choose the quality of life they wish to live right now.
These baby boomers have real estate holdings and income sources that in the future will allow them to use and reuse their reverse mortgage line of credit. They told me in the beginning that at the right time, they will pay down the line of credit and then allow the growth rate to increase the amount available to them in the future. They feel that their reverse mortgage is a smart financial planning tool, increasing their cash-flow options and extending the life of their other assets.
As we started the process, Jenny passed the new Financial Assessment easily, but she was concerned about what her kids would think about her getting a reverse mortgage. Her son and one daughter were supportive, but another daughter had concerns.
SERVICING
John and Sara are not unique among reverse mortgage clients. They didn’t choose a reverse mortgage because they couldn’t otherwise pay their bills. Actually, they have savings, investments and future inheritance funds that will give them a comfortably independent lifestyle. However, by doing a reverse mortgage, they no longer have to tap into their “future nest egg.”
A life spent in construction and the fishing industry has been good, but Frank wants to retire. Without continuing to work, obtaining a line of credit or other financing was not available. A reverse mortgage would make it possible to build a new four-car garage so he could restore antique cars, add a deck to the back of their home, travel with Carol and plan for living the rest of their lives in the home they love.
TECH
CAROL AND FRANK
ORIGINATING
JOHN AND SARA
The Reverse Review August 2015
ORIGINATING
Working With Realtors By Tim Linger
Educating our partners about HECM for Purchase has its challenges and its rewards. The HECM for Purchase is probably the most challenging reverse mortgage loan to close because of all the people involved: the seller, the seller’s agent, the buyer, the buyer’s agent and the title company. But I believe the HECM for Purchase is also one of the most rewarding loans to close, because we are assisting a senior buyer with the purchase of their retirement dream home—a move that might not have been possible without this important product. Navigating the Challenges When initiating a Purchase transaction, the first challenge we often face is with the seller’s agent, whom we may have never met and who may not be educated on how this loan works. The seller, therefore, might be convinced to pass on the offer because they don’t understand what a HECM is and are wary of what can seem like a complicated loan. In this case, the buyer’s agent might try to explain the HECM for Purchase to the seller’s agent, hoping to spur on the deal. But the agent is not a reverse mortgage specialist, and it’s unlikely that they would be able to fully explain the intricacies of the loan. The situation could lead to some lingering confusion about the details of the transaction, even if the seller agrees to move forward with the process. 24 | TRR
In some cases, the complications persist. Because most real estate agents don’t have much experience with HECMs, the agent typically needs assistance completing the Purchase contract. It’s understandable that they wouldn’t be aware of the down payment requirements and what details need to be included in a Purchase contract. And, because this is an FHA loan, the FHA financing box needs to be checked. In many states, the seller then chooses the title company. Once these tasks are completed, the constant need for communication between the real estate agents and the buyer comes into play. Near-daily communication is necessary in many cases to ensure that all parties are up to speed and that the transaction is moving along. All of these potential roadblocks highlight the importance of a knowledgeable reverse specialist who is deeply involved and readily available to answer any questions and deal with any issues that may arise during the process. Once you have completed a transaction—if you are diligent—you have the opportunity to turn not one, but two agents on to the power of the HECM. Combatting Negativity We often face challenges long before we even get in front of a single real estate agent. I am sometimes amazed by the objections we get: “I don’t sell to seniors,” “I only deal with cash buyers,” “I have no need for any type of financing,” and the most frustrating: “Reverse mortgages are too expensive and you’ll lose your home.”
GOING TO THE SOURCE
I have found the one helpful way to overcome these initial objections is to present the loan as a HECM for Purchase, avoiding the term “reverse mortgage,” which can generate negative feedback. I often explain that reverse mortgages are for refinancing a property and the HECM for Purchase is for buying a new property. Although both are FHA loans, reverse mortgages effectively began in 1988 as a refinance program, I explain, and the HECM for Purchase is a different variant that was established in 2008. Embracing the term “HECM for Purchase” has opened many doors for me as I work to connect with Realtors and builders, side-stepping the negative reaction that some agents exhibit when they hear the term “reverse mortgage.” Once I am able to fully explain the HECM for Purchase and the agent comes to understand its benefits, we can discuss how the loan is connected to traditional reverse mortgages. Excited by the potential of the Purchase loan, agents are usually able to let go of their negative perceptions.
The most important thing to focus on as you work to build your own Realtor network is all of the seniors who could benefit from this tremendous product. If we as an industry continue to educate our partners, promote our product and offer our services to those in need of guidance, more seniors will be able to purchase their ultimate retirement dream home. n
View our digital version...
Reverse Review articles (current and past) are available on our website. Access a wealth of content about the business of HECMs online. www.reversereview.com reversereview . com
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SPOTLIGHT
To work on developing this network, my company has helped its specialists obtain Continuing Education certification so they can meet and educate Realtor groups in their area. The experience has taught us that, once all the questions have been answered, it’s fairly easy to get real estate agents—and even their entire office—excited about the HECM for
But even with the kit, follow-up is extremely important. It’s important to be continually touching base with your Realtor network, because out-of-sight means out-of-mind. We have developed a series of emails, direct mail and social media campaigns to help us stay in contact with our Realtor partners. We keep them informed of program updates and remind them of our services, stressing the fact that we are available any time should questions about the program arise. Education is key and continuous excitement about the program is important.
SERVICING
In my time working to sell HECM for Purchase loans, I have come to see how essential it is to work with knowledgeable Realtors. Having a dedicated network of real estate agents who are educated on the details of a HECM for Purchase is a huge benefit to a reverse specialist. When our Realtor partner is a champion of the product, and they are able to help senior clients understand how they can purchase a home with only half down and no additional mortgage payments, everyone wins.
To combat this problem and keep the interest alive, we have created a HECM for Purchase Real Estate Kit, complete with yard signs, open house signs, brochures, a HECM banner, templates for personalized flyers, and a “How to Market the HECM for Purchase” booklet. In the booklet, we discuss what wording to use on MLS (the multi-listing service), what to post on social media and how to get the conversation started with potential senior homebuyers.
TECH
Educating Our Partners
Purchase. After teaching a class about the ins and outs of the loan, the excitement among our professional partners is often palpable as they begin to understand the possibilities. But if there is no follow-up, this enthusiasm can wane as the agent begins to forget how incredibly awesome the HECM for Purchase really is. If no marketing has been done and no discussions with seniors have arisen, time erases the agent’s memory and most (if not all) of our efforts have been wasted.
ORIGINATING
“All of these potential roadblocks highlight the importance of a knowledgeable reverse specialist who is deeply involved and readily available to answer any questions and deal with any issues that may arise during the process. Once you have completed a transaction— if you are diligent—you have the opportunity to turn not one, but two agents on to the power of the HECM.”
ORIGINATING
The Reverse Review August 2015
The Golden Gate to Retirement Security: Reverse Mortgages and Funding Longevity
NRMLA
Annual Meeting & Expo
November 16-18, 2015 The Palace Hotel San Francisco, CA
Re gister now at nrmlaonline.org 2
26 | TRR
R E V E R S E M O RT G A G E / S E P T E M B E R - O C TO B E R 2 0 1 5
ADVANCE
TECH
Sales Automation: The Next Generation of CRM By John McGee
How new technology can help create better results
24% Currently, it is estimated that most salespeople only spend about 24 percent of their day engaged in actively selling their products.
79% According to Marketing Sherpa, 79 percent of marketing leads never convert into sales.
Another key differentiator between marketing and sales automation solutions is the mentality behind the core functionalities of each. Marketing automation is focused on funneling more and more leads into the sales pipeline. Once they are there, marketing is no longer responsible. Sales automation is responsible for nurturing. It mirrors the actions and tactics of the most successful salespeople in an organization. Sales automation software drills down into the history of a lead to determine, without action on the part of a salesperson, when to follow up with a lead, the most effective way to follow up and what messaging to send. Once a mortgage company has a basic CRM system in place, the time is ripe for engaging a sales automation solution. Lead nurturing is one of the most vital factors in determining if a lead will become an active customer. According to Marketing Sherpa, 79 percent of marketing leads never convert into sales. Lack of lead nurturing is the common cause of this poor performance. Sales reps with unknown or less-than-stellar performance records do not need to be relied on to improve their own selling skills independently. Any mortgage company can add sales automation to their current CRM tools to elevate every member of the sales team to elite performance levels without additional training or experience. The software is programmed to deliver the best results. n reversereview . com
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SPOTLIGHT
100%
0%
initiatives. Additionally, the potential for salespeople to be creating unauthorized messaging that does not meet legal approval will be eliminated. A sales automation program can harbor a library of sales messaging that reps can access—and, in certain areas, customize—for the recipient. The preapproved and tailored message can be sent from within the system and instantly tracked in the lead notes.
SERVICING
Currently, it is estimated that most salespeople only spend about 24 percent of their day engaged in actively selling their products. The rest of the day is spent on clerical tasks that could be automated. For example, rather than relying on each sales rep to create outreach materials for leads currently in the pipeline, such as follow-up emails, companies need to adopt the template approach. By having a library of templates available for salespeople, companies can assure that content is approved by marketing and in alignment with other
TECH
Sales automation should not be confused with marketing automation. The two solutions are extremely different in design and results. Marketing automation simplifies the process of sending out emails, direct mailings and social media postings by automating when these events occur. While the actual sending of messaging, such as a special offer or notification of a new government regulation that is making it easier to apply for reverse mortgage, is triggered without human action, a sales team member must still manually track a lead that results from the marketing outreach—and, more importantly, make decisions on when and how to push the lead through the sales pipeline.
ORIGINATING
When most people think about customer relationship management (CRM) and the mortgage industry, they think of the most widely used solution, Salesforce, as the definition. But today, in order to be successful, CRM needs to be much more than simply tracking and reporting on leads. Nearly every large mortgage brokerage uses some type of CRM database to manage customer data. What needs to be taken into consideration now is how action can be taken on those leads to increase the number of reverse mortgages closed. The simplest and most effective way to push more leads through the sales funnel is to implement sales automation.
The Reverse Review August 2015
LEARN
SERVICING
When the Last Surviving Borrower Dies By Jason Perez
called Due & Payable without requiring further approval from HUD. Once this is completed, a Demand Letter or Notification to the Borrower must be sent to the property and all other mailing addresses on file. This letter notifies any heirs or the estate of their options, which are outlined in HUD Handbook (sections 4330.1 and 13.33).
These options include:
How recent policy change has impacted the servicing process I regularly receive questions about what happens when the last surviving borrower dies, and when I think back to my responses just a few years ago, I realize they were once very simple. But in the wake of major product change these past two years—like so much within our product and industry—it has gotten complicated! I’ll do my best to simplify what has become a more layered, complex and ultimately rewarding process for borrower’s heirs and estates. Informing HUD and Heirs One constant in this end-phase of reverse mortgage loan servicing is the necessity of communicating with HUD and the heirs or estate. When the last borrower passes away, news of the borrower’s passing must be communicated to HUD and the loan is 28 | TRR
3 Paying the loan balance in full 3 Completing a short sale for a minimum of 95 percent of the appraised value, less customary closing costs 3 Completing a deed in lieu of foreclosure 3 Walking away and allowing the foreclosure process to commence After this notification letter is sent, monthly property inspections are completed and an appraisal is ordered. If no response is received from the heirs or the estate, the foreclosure process begins. Foreclosure Timeline: Then and Now In years past, servicers could allow a full six months from the date of the last borrower’s death before starting the foreclosure process. Within this timeframe, it was possible for the servicer to apply for and receive up
to two 90-day extensions to delay foreclosure to allow the heirs or estate to satisfy the loan. In rare exceptions, a third 90-day extension could be granted by providing HUD with documentation for review and approval if satisfaction of the loan was imminent. With these extensions in place, an “Auto Servicer Extension” of 90 days was provided to the servicer to complete the required First Legal Action of Foreclosure, after all applicable extensions expired, or after the initial six-month timeframe if no further extensions were applied for or granted. This process changed in 2012, when HUD clarified that the Auto Servicer Extension was no longer “automatic” for servicers. This 90-day extension to complete the required First Legal Action of Foreclosure for servicers would be available if and when servicers were able to provide proof of the heirs/estate efforts to satisfy the loan. If this proof could not be obtained, then the required First Legal Action of Foreclosure’s deadline would be at the six-month mark from the date of death. This new timeline accelerates the servicer’s need to acquire documentation from the estate or heirs. When documentation is not obtained, loans move to the foreclosure process more quickly and servicer responsibility increases. Loans now begin the foreclosure process within 60 to 90 days from the date of the last borrower’s death, not the six-month window previously provided. If a loan was in the foreclosure process, and the heirs provided the required documentation, it was still possible to apply for and receive the two 90-day extensions, and sometimes the rare third extension to delay foreclosure proceedings. With this documentation in place and extensions granted, the servicer was then able to proceed with what is the equivalent of the 90-day Auto Servicer Extension to
SERVICING
g ACCORDING TO RYAN
“What will never change in this process is the need for servicer and industry sensitivity to the grief and all-too-common confusion harbored by the heirs of a deceased borrower.” Celink COO Ryan LaRose
allow for completion of the First Legal Action.
Non-Borrowing Spouse
What Will Never Change
A BETTER CHOICE!
Our dedicated team of professionals has the experience and knowledge to smoothly close reverse transactions. Through years of experience, FNC has gained valuable knowledge by building strong relationships with reverse mortgage lenders and brokers, as well as the borrowers we service. We firmly believe that our clients deserve the best treatment, and that is why FNC is where reverse mortgages take center stage.
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SPOTLIGHT
A nationwide title and settlement company servicing the reverse mortgage industry.
SERVICING
What will never change in this process is the need for servicer and industry sensitivity to the grief and
While it’s essential to follow HUD’s updated protocol, it is equally essential to remember that the end of a reverse mortgage loan signals the end of the life of a cherished father, mother, grandparent or partner. n
TECH
The biggest change is the addition and consideration for a remaining Non-Borrowing Spouse (NBS). Per Mortgagee Letter 2014-07, for reverse mortgages with FHA case numbers issued on or after August 4, 2014, an
With the issuance of Mortgagee Letter 2015-15, and also for reverse mortgages with FHA case numbers issued on or after August 4, 2014, servicers can elect to assign the loan to HUD and the agency will grant a similar deferral period for the NBS while it services the loan. This assignment has many requirements that need to be met before it is accepted.
“I recall an instance where a borrower’s daughter was thrown into complete and devastating grief over the sudden loss of her mother. She was emotionally paralyzed for months, although almost daily she was faced with the daunting task of dealing with the loss of her mother, and undertaking the necessary actions to finalize her estate. We worked closely with the daughter, counseling her through the entire process until she was able to sell the home and pay off the reverse mortgage balance. Reverse mortgage servicers spend a great deal of important and extended time with these grieving family members as they coach them through this process.”
ORIGINATING
Another major change came with the issuance of HUD ML 2015-10. This mortgagee letter clarified the notification requirements that must be completed to properly inform HUD of events pertaining to the Due & Payable process. It created additional extensions that servicers might apply for in order to meet requirements for taking First Legal Action. It also eliminated the previously allowed third extension to delay foreclosure.
NBS “identified before the loan is taken” can be on deferral status as long as they meet additional HUD requirements. They cannot withdraw any remaining funds, but they are allowed to remain in the property they shared with the deceased borrower.
all-too-common confusion harbored by the heirs of a deceased borrower. Celink COO Ryan LaRose shared one particularly poignant story:
The Reverse Review August 2015
SPOTLIGHT
Mastering the Art of Reverse Mortgage Conversation B Y B I LL S MI T H
M O NT
H’
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IN
HOW TO EFFECTIVELY EXPLAIN THE LOAN AND CONVERSE WITH POTENTIAL CLIENTS
S
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IS TH
09 / 2015
WANT TO SEE MORE ARTICLES LIKE THIS?
See them at reversereview.com.
O
ur job as reverse mortgage loan originators is to help senior homeowners, their families and advisors determine if the loan’s benefits make it worthwhile for their particular situation. A critical attribute for success is to go beyond mere communication and engage in real conversation. Top reverse mortgage producers share an ability to overcome the challenges that get in the way of productive conversation. Have you grappled with the question of why the reverse mortgage is so widely misunderstood and why more seniors don’t consider its use? Part of the answer can be found in the discussions we often have about the product. What do we face when we first sit across the kitchen table? What obstacles must be overcome before homeowners can make appropriate, well-informed decisions? If we look closely, we see that the list is formidable. 30 | TRR
1 W e are strangers. We know nothing
about the homeowner and we are about to discuss extremely personal information.
2 W e must quickly get to know the prospect’s problems and needs.
3 T he reverse mortgage product is
complicated and can be difficult to explain.
4 T he typical homeowner’s mortgage
experience is completely opposite of that of a HECM.
5 Misunderstandings and
misinformation about reverse mortgages abound.
6 Indirect issues (like legacy beliefs)
can confuse and cloud the decision.
To varying degrees, these challenges are present whenever we engage in an initial discussion about reverse mortgages. Whether we’re talking with a financial advisor at a networking event or across the kitchen table with a prospect, we must clear these hurdles. Communication Versus Conversation To tackle these challenges, I find that it’s helpful to examine the distinct difference between communication and conversation. Communication can be defined simply as the presentation of ideas. A billboard or a sign in a store window is communication. BUY ONE GET ONE FREE! It’s a one-way message. Conversation is defined as the spoken exchange of opinions, ideas, thoughts and feelings. Exchange is the key difference. In Monte Rose’s book, GO SELL. GO SERVE. – Kitchen Table Mastery for the Reverse Mortgage Professional, he emphasizes the importance of quality conversation, writing, “Successful communication at the kitchen table revolves around
SPOTLIGHT creating emotional clarity and connection with the senior client.” These achievements can only be realized through effective, two-way conversation.
I crafted my reverse mortgage elevator pitch to introduce the product so that a discussion of its benefits could follow. To begin, I established three fundamentals:
ONE
TWO
I assumed that my audience would have little or no understanding of the product or its application.
SERVICING
My description needed to be simple, clear, easily understood and reassuring to a skeptical audience.
THREE
My pitch needed to resonate with senior homeowners as well as with professionals in order to stimulate additional discussion and questions.
Here’s what I came up with: Reverse mortgages have been around for decades. In the ’90s, Congress was concerned about the financial well-being of retirees and the future of Social Security. It found that America’s seniors owned trillions of dollars in home equity. If a way were developed that allowed seniors to safely and securely tap into a portion of that equity to receive funds or additional income during retirement, millions of people could benefit. As a result, the government-sponsored reverse mortgage was created and signed into law by President Reagan in 1998. The reverse mortgage is simply a mortgage on the borrower’s principal residence. Under the FHA program, three things determine how much money is available: the age of the borrower (you must be 62; the younger the borrower, the less money available); the value of the home (the greater the value, the more funds available); and the interest rate at the time of the loan. These factors are fed into the computer and HUD’s formula spits out a number. That number is the amount that a borrower can get at that age, at that interest rate and with that home value. 8 reversereview . com
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SPOTLIGHT
As reverse professionals, our ability to explain the product in easy-to-understand, customer-friendly and customer-centric terms is critical. HECM applications always depend on the borrowers’ understanding of the product and their confidence in you as their authoritative guide. Without an effective vocabulary, the conversation will be a struggle and the outcome uncertain. A rote dump of HECM facts and figures won’t expose senior homeowners to the benefits they may gain from a reverse mortgage. Three hundred years ago, British essayist Joseph Addison wrote: “If the minds of men were laid open,
After my initial loan officer training, I could not plainly describe the HECM loan to family and friends. I knew that I needed an elevator pitch. As a former telecom executive and technology consultant, I learned that effectiveness required salesmanship: the ability to seize opportunities to clearly and convincingly tell a story. Most successful salesmen have learned the value of the elevator pitch, which is a short summary used to quickly and simply define a product and its value proposition. Tom Peters, author of In Search of Excellence, neatly described this important element: “The elevator pitch [is] about communication. And caring. Can you take the hopelessly complicated set of problems that you’re juggling… and reduce those problems to three bullet points that anyone can immediately understand?”
TECH
Since that eye-opener, I’ve worked continuously to improve. I learn from my colleagues and prospects, and by simply reflecting on my encounters at the kitchen table. I have found that sensitivity to clients and the signals they give can be crucial. Sometimes it’s the raising of an eyebrow or a slight smile, often it’s a question or response. It may be the tone of voice. However recognized, the moment we sense that the prospect sitting across from us “gets it,” our confidence elevates, our focus sharpens and our ability to “tune in” becomes more acute. We are guiding the conversation and we are getting somewhere.
Elevating Your Pitch
ORIGINATING
Luckily, I learned the importance of conversation early in my reverse career. I was a green loan officer with little training and no applications under my belt. Armed with little more than self-confidence, I was absolutely sure I had charmed my way into my client’s good graces and that she would choose me over a competitor. I sent a handwritten note thanking her for her time. I wanted to make it tough for her to select the other company. I confidently believed that the charm offensive would win, but it did not. After the shock faded, I gained some composure and asked why. She told me that the other loan officer answered her questions and described the reverse mortgage more clearly. “He was better able to help me see how it would work for me,” she said. I realized that I couldn’t rely solely on my “charming personality” and that I’d better improve my reverse mortgage conversation skills in a hurry.
we should see but little difference between that of the wise man and that of the fool. The difference is that the first knows how to pick and cull his thoughts for conversation, whereas the other lets them all indifferently fly out in words.” My goal is to make wiser men and women and better reverse mortgage spokespersons of us all.
The Reverse Review August 2015
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SPOTLIGHT
1 I put the reverse mortgage product
into a solid, comfortable and elevated context. While many citizens are currently discontented with our federal government, I have found that most seniors like the government of Tip O’Neill and Ronald Reagan and embrace the notion that at its best, Washington looks after the welfare of the people.
2 By stating that it could benefit millions
of Americans, the statement serves to dispel the notion that the reverse mortgage is a bailout for poor financial planning or a last-ditch ploy for the down and out.
3
In the second paragraph, I explain the how of the reverse mortgage in simple, unambiguous terms. Everyone can visualize age, home value and interest rate data being fed into a computer and the computer then “spitting out a number.” Of course, many important details are left out. These details will be discussed in the conversation that inevitably follows. My elevator speech vocabulary does not include terms like Financial Assessment, non-borrowing spouse, appraisal, principal limit, etc. Such specifics should be reserved for later conversations intended to dig deeper into the facts. But before that conversation, what usually follows is a discussion about the homeowner’s circumstances, their financial situation and lifestyle needs. If a reverse mortgage can address these issues, it will be clear to both parties that it’s time to move forward. n
inally, the statement infers F government regulation, which implies safety and oversight.
R E V E R S E R E V I E W. C O M
SPOTLIGHT
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This can be delivered in less than two minutes. I am fully aware that some of the terminology I use may not be up to compliance standards and that a lot of important factors were left out, but come on, folks—this is an elevator pitch! Brevity is crucial. The details come later.
Let’s take the pitch apart and examine its message. In the first paragraph, I have several specific objectives:
ORIGINATING
After deducting the fees and costs of the loan, borrowers can receive cash, a line of credit or monthly income checks that are guaranteed to come tax-free for the rest of their life as long as they continue to live in the home. Unlike a regular mortgage, there is no requirement to make monthly mortgage payments. The loan is eventually repaid when the home is sold after the borrower permanently moves out or dies. The amount that is repaid is the amount the borrower received in cash and payments, the original fees and costs that were financed in the loan, and the accrued interest and mortgage insurance premium. The remaining equity is the borrower’s or their heir’s to keep. And, if the sale of the house is not enough to pay off the mortgage, HUD eats the loss.
ACQUISITIONS
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The Reverse Review August 2015
By Lauren Daniels
$25k
Immediately aware of the HECM’s potential, Congress increases the loan cap to 25,000.
HUD launches the HECM as a part of a pilot program with a 2,500-loan cap.
1989 34 | TRR
1999
1990
A SNAPSHOT OF HECM HISTORY
NRMLA is founded
1997
Made an official program by HUD one year earlier, the HECM hits its stride as Financial Freedom dominates the market. More than 38,000 loans have been insured. FHA releases guidelines for HECM refinancing.
2004
NOT LONG AGO, THE PHRASE “REVERSE MORTGAGE” DIDN’T HAVE A PLACE IN THE VOCABULARY OF SENIOR HOMEOWNERS OR MORTGAGE PROFESSIONALS. What began in the summer of 1989 as a pilot program with a limited run of 2,500 loans became a full-fledged, multimilliondollar industry. It hasn’t always been a smooth ride. Despite the ups, downs, acquisitions and regulations, the one constant is the people who remain committed to the product’s sustainability and growth. HUD launched the Home Equity Conversion Mortgage demonstration with the goal of helping seniors turn their home equity into cash. By unlocking this value, the agency could help elderly homeowners who were, according to the organization, “house-rich but cash poor.” The pilot benefited from a clearly defined market with a demonstrated need, but without a roadmap, getting started in reverse mortgages required some ingenuity. “Not only did we have to raise the capital to start a company and make loans, we needed to develop the product and raise the mortgage capital as well,” says Jim Mahoney, whose company, Financial Freedom Senior Funding Corporation, became an industry leader. Much has been written on these very pages about the history of the HECM, but what was it like for the people building the program in the early days? We spoke with some of the pioneers to gain a better understanding of the beginning and to learn their vision for the future.
2007
Coaxed by Jeff Taylor to join the newly created reverse mortgage division at Unity Mortgage in 1991, Joe Morris wasn’t sure he was ready to dedicate his professional life to reverse mortgages… until he met Ms. Mitchell. The 82-year-old wheelchair-bound woman was his first HECM loan. At closing, Ms. Mitchell tearfully told the group, “Fellas, I know an angel sent you here to help me.” At that moment, Morris was hooked. “I’d been in the mortgage business for 22 years prior to that, and I had never heard anything like that,” he says. “I was able to change this woman’s life. Right then and there, I knew I wanted to do reverse mortgages the rest of my career.” And he has. Ask almost anyone in the industry and they have their own Ms. Mitchell. For Jim Mahoney, it was a couple from Northern California. The handwritten letter he received from them more than 15 years ago is a constant reminder of why, after all these years, he is still part of the reverse mortgage industry. It was 1999 and the program was beginning to find its stride; loan volumes were rising and thanks to financing from Lehman Brothers, Financial Freedom was in the midst of acquiring Transamerica HomeFirst. Mixed in among the stacks of paperwork for the deal (remember, this was before electronic signatures) was a letter from a dentist and his wife. Health issues had decimated their savings and the couple, seeing no way out, considered suicide. It didn’t come to that. A reverse mortgage solved their money problems; the couple had the means to cover their medical expenses and plan retirement. “We all get caught up in transactions, in the business and things like that. This letter is the very essence of why we were in business,” Mahoney says. In fact, the framed letter hung on the wall of his office for years, just to make sure he never lost sight of what the people of this industry can do to improve the lives of seniors. 8
2013
2010
Ginnie Mae issues its first HECM-backed security.
H4P
PEOPLE FIRST
The HECM Saver is introduced.
The HECM for Purchase is introduced.
2009
A wave of policy change hits the reverse market as FHA revamps the program to ensure its longterm sustainability.
Dodd-Frank applies pressure on the financial services industry, and three leading banks exit the reverse space.
2012
A long-awaited financial assessment of reverse mortgage borrowers is instituted.
2015
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The Reverse Review August 2015
“In theory, the concept of a reverse mortgage is deceptively simple: In exchange for the equity in their homes, lenders make payments to borrowers. But the concept was so unorthodox that it was a difficult product to explain to seniors. It proved tough to grow a product when the intended audience didn’t understand it.”
For every Ms. Mitchell or Northern California couple there are thousands more borrowers and thousands of stories of how the HECM transformed a borrower’s ability to live in their later years.
SLOW START
One year into the pilot program, Congress expanded the demonstration to include any FHA-approved lender and increased the number of available loans to 25,000. Congress had faith in the program and feedback from early borrowers was positive. For those working with HECM loans at the time, there was no shortage of enthusiasm or desire to succeed. But there was a need for more trained professionals to sell and service the loan. By virtue of being a brand-new product and business model, everything from staff training and consumer education to processes and paperwork had to be created from scratch. The steep learning curve slowed the process. Two years in, fewer than 400 loans had been closed nationwide, and some lenders complained of processing times stretching as long as 18 months. In those early days, the sales cycle was sometimes just as long. In theory, the concept of a reverse mortgage is deceptively simple: In exchange for the equity in their homes, lenders make payments to borrowers. But the concept was so unorthodox that it was a difficult product to explain to seniors. It proved tough to grow a product when the intended audience didn’t understand it. “The challenge is you can’t explain
this product in a quick 30 or 60 seconds,” says Sherry Apanay, who was one of the first people to join Joe Morris’ team at Unity Mortgage and now works as chief sales officer at Urban Financial of America. Apanay quickly understood the reverse product was one of nuance. “You really have to take time to walk someone through every aspect, whether it’s a broker or a borrower.” As a result, early loans were a timeconsuming process—the sales cycle could take nearly a year. In contrast to today’s call centers and online leads, early loans were exclusively sold using a face-to-face approach. Sitting with a senior at their kitchen table went a long way in moving the HECM product from an oddity to a solution for seniors in need of money for retirement. “There’s a level of trust established when you’re face-to-face with a borrower,” Apanay says. “First, they give you a quizzical look while you’re explaining the concept. But it is pretty rewarding to see the moment when they start to get it.” In fact, the success of the call center model still surprises Morris: “I didn’t think this product could ever be sold over the telephone or the Internet.” The moment when a senior saw how a reverse mortgage could improve their situation was the life force during the program’s early years. “When we first got into the business, we made money on a small origination fee,” says John Nixon, who ran both the forward and reverse sides of Seattle Mortgage’s business. “The people that were in the business, they were there because they really wanted to do something for seniors.”
CHA-CHA CHANGES “For the first eight or nine years nothing really changed,” says Joe Morris of the early years of HECM. “Now, it seems like there’s something new coming out every week.” Given the changes the product has undergone, it’s no wonder Morris feels this way. Refinancing was introduced in 2004. Two new options, the HECM for Purchase and HECM Saver, were launched in 2009 and 2010, respectively. Perhaps nothing has changed the future of the product as much as the institution of Financial Assessment. Implemented this year, the genesis of Financial Assessment began in 2010, according to John Nixon. Designed to limit the risk of technical default, lenders must consider a potential borrower’s credit history and income sources in lending decisions. If the assessment determines it is needed, a portion of loan proceeds will be set aside to ensure the borrower is able to comply with the loan terms by continuing to cover required expenses, including property taxes and insurance. Financial Assessment is the latest revolution that aims to improve the future position of the product. 36 | TRR
Keeping the focus on seniors has helped the industry weather challenges, from unflattering press to the drop in home values during the financial crisis. “If the industry executes and takes care of the customer first and foremost, we can avoid most of the things that could set us back,” Mahoney says. Some things—the return of dramatically sinking home values or soaring interest rates—are certainly outside of the industry’s control, but as long as the focus is on helping America’s seniors retire in a safe and secure manner, the reverse mortgage industry will have a successful future. Nixon takes pride in the role he and his fellow pioneers played in shaping the past, and the work they’re doing to secure the future. He hopes the next generation will maintain a dialogue with all stakeholders, including NRMLA, HUD and Ginnie Mae, and echoes Mahoney’s sentiment that seniors must stay at the center of all future plans. “We made sure borrowers were treated with respect,” Nixon says. One of the perks of the reverse industry is business success and personal fulfillment aren’t mutually exclusive. “We got to blend a successful business with the moral satisfaction of really helping people out and changing their lives,” he adds. Thousands of seniors become eligible for a reverse
mortgage every day and statistics show many aren’t financially prepared. Seniors will increasingly be in need of tools like reverse mortgages as they approach retirement. Part of setting up the HECM product for future success is working with people outside of the mortgage industry and trying to get everyone to understand the power of the reverse mortgage. Transitioning the product from purely needs-based to part of a smart portfolio planning is a main item on the agenda. The more financial planners and asset managers know about reverse mortgages, the likelier they are to consider the product for their clients. But that will take time. Nearly three decades after she first joined the industry, Apanay, like all those we spoke with, is bullish on the future and confident she made the right decision when she made the jump to reverse all those years ago. “I felt in the beginning that I was on the ground floor of a great industry,” she says. “It’s come along slower than some of us would like, but I think it’s definitely still healthy and we’ll continue to grow.” Looking back, Morris wouldn’t change a thing. He didn’t intend to work in the reverse industry, but he’s glad he stayed. What advice would he give to someone who is hesitant to work in the reverse space? “Remember that you can put yourself in a position to influence and improve many senior citizens’ lives.” n
“Part of setting up the HECM product for future success is working with people outside of the mortgage industry and trying to get everyone to understand the power of the reverse mortgage.”
LOOKING FORWARD
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The Reverse Review August 2015
LAST WORD
RR
REJOICE
RR
RR
Celebrate “HECM With Dignity!” Atare E. Agbamu
Optional Election (MOE) assignment, lenders could have been forced to kick many seniors out of their homes. That could have triggered many costly legal battles and related horror stories in the media and in social media. Now, the story is one of joy and hope, it’s about lenders helping spouses stay in their homes.
Recent policy changes have given the industry a reason to rejoice. The outcome of HECM policy bloodletting over the last six years calls for celebration. That is why the absence of singing and dancing and partying in the HECM industry is puzzling. What would it take to bring some joy about HECMs back into the business? Joy from issuing the safest reverse mortgages in the world, the “gold standard,” as HUD’s Edward J. Szymanoski—my friend and a key architect of the HECM 27 years ago—calls them. Joy from selling a credit product that gives older consumers the opposing values of borrowed cash and peace of mind, assuming they pay their taxes and insurance. And joy from knowing that a major financial and reputation headache, the displacement crisis of surviving non-borrowing spouses, is behind us. The crisis had taken HECM’s reputation hostage since the litigation in 2011. 38 | TRR
It ended with FHA Chief Edward L. Golding’s decision to grant lenders access to a special assignment for loans with surviving non-borrowing spouses. For an issue that had overpowered other FHA bosses, Mortgagee Letter 2015-15 was a milestone for the industry. Many spouses who feared displacement are now rejoicing. We should rejoice with them because it is the industry’s victory too. Mary Blevins of Cedar Hill, Texas, is one of the spouses. For years she lived in terror of displacement from the home she has shared with her husband for almost 30 years. In part, here is her reaction to ML2015-15 in an email: “I so dreaded the thought of losing my husband and home at the same time. Truthfully, I think I would have been a total basket case. Now I feel like I can face widowhood with dignity instead of desperation. I can live here in my house while I adjust, and I can make decisions without the stress of a looming foreclosure.” The policy letter averted looming financial and reputation crises for lenders and the HECM industry. Without access to the Mortgagee
It is a compassionate story to tell, and we can borrow Blevins’ potent phrasing: “Widowhood with dignity instead of desperation,” or we can mint new ones such as: “HECM with dignity, age with HECM.” For champions of “extreme” industry rebranding, these phrases could be employed in a fresh strategic communication initiative, which should highlight the new HECM safeguards, including Financial Assessment, while stressing the importance of tax and insurance payments to protect your loan. Let’s celebrate plaintiff and defense attorneys in the NBS litigation for their dogged four-year-plus courtroom combat. Out of their principled struggle for their clients, out of hundreds of pages of motions and counter motions, memoranda, opinions and rulings, has emerged a HECM that is as good as gold in the evolving world of home equity conversion lending. Non-recourse, an essential HECM feature that was made conditional by rescinded Mortgagee Letter 200838 before the litigation, is no longer in doubt. Non-borrowing spouses, originally written out of the HECM and left unprotected from displacement for more than 25 years, have been grafted in, priced in and shielded from latelife displacement when borrowing spouses die. These are critical structural changes that have made the HECM the undisputed gold standard among reverse mortgages. Let’s celebrate “HECM with dignity!” n
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