Page 1

THE

REVERSE DECEMBER 2010 / JANUARY 2011



review

The SAFE Act: Will it Serve its Purpose? The industry anxiously awaits the changes that come with the passage of the SAFE Act. John Smaldone

10 ways to become the

“Go -To” persoN

The Industry’s

2011 RESOLUTIONS

+

new look year


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TRR 12.10/01.11

Q 18

Moving Forward in Rever se

u

n ra

ins

ce

social security 24

28

32

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the Essentials

The SAFE Act: Will it Serve its Purpose? 18 The industry anxiously awaits the changes that come with the passage of the SAFE Act.

John Smaldone

2010...And We Thought 2009 Was Rough? 24 Finding the good in the year behind us.

Michael Banner

Unwinding the Property Tax and Insurance Obligation

28

Spotlighting the concerns that lenders and brokers are facing.

Lori Eshoo

Taxation on Foreclosure - Part III

32

Determining the amount of debt forgiven.

James E. Veale l

the The Report 7, 9 Ask the Underwriter

10

The Perspective 12

Core The Advisor 14

The Conversation

16

The Resources 36 The Last Word 37

4 | TRR


Meet the Team Publisher

Aman Makkar Your greatest strength is knowing your greatest weakness.

Letter from the Editor

Editor-in-Chief

Emily Vannucci “You’re trying too hard... try less.”

l

e

Copy Editor

Kersten Wehde I can’t read a menu, text or wedding invitation without proofreading it. With 2010 coming to an end, I’ve taken some time to both reflect on all that has happened this year and prepare for the year ahead. Here at The Reverse Review we have been listening to your advice, suggestions and comments, and we took them to heart while redesigning the entire publication. After many sleepless nights and research overload, we are thrilled to finally present a new layout, design and overall feel for the new year! The staff here at TRR weren’t the only ones who have been hard at work; our lineup of contributors for the Dec/Jan 2011 issue have stepped up to the plate with a selection of exciting articles and columns.

As you turn the pages to the Essentials, you will find all our informational, opinionated and sometimes eyebrowraising articles, as well as the feature article for each issue. John Smaldone, who wrote this month’s feature, has contributed an article that he has been putting together for some time. The article highlights a lot of what is not talked about within the industry and brings to light some topics people aren’t quite aware of. As a seasoned professional within the mortgage industry, he has seen all of the highs and lows and shares it in “The SAFE Act: Will it Serve its Purpose?” John put a lot into this article and it certainly shows.

To make it easier on you, we’ve divided these articles into two sections: the Core and the Essentials. Within the Core, you’ll find all of our monthly columns, including ones like the Conversation, written by Dave Bancroft. This month he puts his humorous and witty HECM spin on ‘Twas the Night Before Christmas. The Core also debuts a new column this issue called the Advisor, which will be answering your industry-related marketing questions on a regular basis.

While I believe that nothing can ever be perfect, I still like things to be as close as possible. So if there is something you see that we can improve upon, please let us know! The time spent with The Reverse Review should be your time away from work, emails and the phone – your time to sit back and enjoy the experience of reading a magazine. Please enjoy all of our hard work that went into the Dec/Jan 2011 issue.

National Accounts Manager David Peck Changing the industry... one ad at a time.

News Editor

Brett Varner “He who spends too much time looking over their shoulder, walks into walls.”

Advertising Information phone : 858.832.8320 e-mail : advertising@reversereview.com Subscriptions and Editorial Content phone : 858.217.5332 e-mail : information@reversereview.com website : reversereview.com

Editor-in-Chief emily vannucci

Tray-Sea Knight I don’t even know how to spell my own name. Sorry, Kersten.

Printer The Ovid Bell Press

Until next time,

{

Creative Director

}

© 2010 The Reverse Review, LLC. All rights reserved. The Reverse Review, LLC is a California limited liability company and is the publisher of The Reverse Review magazine. Reproductions or distribution of any materials obtained in the publication without written permission is expressly prohibited. The views, claims and opinions expressed in article and advertisement herein are not necessarily those of The Reverse Review, its employees, agents or directors. This publication and any references to products or services are provided “as is” without any expressed or implied warranty or term of any kind. While effort is made to ensure accuracy in the content of the information presented herein, The Reverse Review, LLC is not responsible for any errors, misprints, or misinformation. Any legal information contained herein is not to be construed as legal advice and is provided for entertainment or educational purposes only. Postmaster : Please send address changes to The Reverse Review, 16745 W. Bernardo Drive Suite 450 San Diego, CA 92127


l

the Contributors

Feature Article l

John Smaldone

l

Dave Bancroft

1 1

The SAFE Act: Will it Serve its Purpose? pg 18

The Conversation, pg 16

Dave Bancroft, Founder and former President of Omni Reverse Financing Inc., is an industry expert in the origination of reverse mortgages, FHA and VA government loans. Dave founded Omni Home Financing in 2002 in order to specialize in government lending and is now one of the largest originators of HECM reverse mortgages in the country. 949.355.4653| davebancroft@cox.net l

Michael Banner

2

2

2010...And We Thought 2009 Was Rough?, pg 24

Founder of LoanWell America, Inc., Michael Banner is one of few reverse mortgage professionals accredited to teach continued education classes to CFPs, CPAs, attorneys, and insurance agents. Michael has been interviewed by The Wall Street Journal, Tampa Bay Business Journal, and has appeared on the FOX Business Network. 877.753.1705 | Michael.Banner@loanwellamerica.com l

3

John Smaldone, founder of Taylor, Bean and Whitaker and former Senior Vice President of TransLand Financial Services Reverse Mortgage Divisions, is the Executive Vice President of Hanover Financial Services, a consulting firm primarily in the reverse mortgage industry. With 42 years of mortgage banking experience, 10 years being in reverse mortgages, John intends to remain in the reverse mortgage area of the business taking on long term consulting assignments. johnsmaldone@charter.net

6 | TRR

Lori Eshoo

3

Unwinding the Property Tax and Insurance Obligation, pg 28

Lori Eshoo is President and CEO of National Tax Search LLC (NTS), a Women’s Business Enterprise (WBE) based in Chicago and established in 1996. NTS provides comprehensive commercial and residential property tax management, tax certification and sales tax payment processing services. 312.233.6440 | lori.eshoo@nationaltaxsearch.com

4

l

Sue Haviland

4

5

The Advisor, pg 14

Sue Haviland is co-founder of reversemortgagesuccces.com. She has been in the mortgage industry for over 25 years. Unlike many others, Sue originates reverse mortgages each and every day! If you would like to profit from the largest niche to ever hit the mortgage industry grab their free course and profit producing tips at reversemortgagesuccess.com l

Shannon Hicks

5

The Last Word, pg 37

Shannon Hicks is VP of Product Development at Reverse Fortunes, Inc. He draws from his experience as a reverse mortgage originator and prior work in the financial services industry. He has spoke nationally at NRMLA events and is also host of Reverse Fortunes Weekly, the nation’s only weekly podcast for reverse mortgage professionals. 800.805.9328


The Reverse Review December 2010 /January 2011

the Report

November 2010

Top Lenders Report

12345

Wells Fargo MetLife Bank NA Bank Endorsement Endorsement 1783 579

Rank / Lender

Bank of America NA

CHARLOTTE

Endorsement

550

Endorsements

One Reverse Generation Mortgage LLC Mortgage Endorsement Company 338 Endorsement 131

Rank / Lender

Endorsements

6.

1ST AAA REVERSE MORTGAGE

99

29.

MORTGAGESHOP LLC

26

7.

SECURITY ONE LENDING

87

30.

M AND I MARSHALL AND ILSLEY

25

8.

URBAN FINANCIAL GROUP

87

31.

ASPIRE FINANCIAL INC

24

9.

MONEY HOUSE INC

80

32.

FIRST MARINER BANK

21

10.

GUARDIAN FIRST FUNDING GROUP L

76

33.

SENIORS REVERSE MORTGAGE

21

11.

GENWORTH FINANCIAL HM EQUITY

65

34.

ENVOY MORTGAGE LTD

20

12.

FINANCIAL FREEDOM ACQUISITION

60

35.

WEBSTER BANK

20

13.

AMERICAN ADVISORS GROUP

55

36.

STAY IN HOME MORTGAGE INC

19

14.

PNC REVERSE MORTGAGE LLC

54

37.

SENIORS FIRST MORTGAGE COMPANY

18

15.

NET EQUITY FINANCIAL INC

49

38.

WILMINGTON SAVINGS FD SOCIETY

18

16.

UNITED SOUTHWEST MORTGAGE CORP

48

39.

ROCKLAND TRUST CO

17

17.

SUNTRUST MORTGAGE INC

46

40.

TRADITIONAL HOME MORTGAGE INC

17

18.

IREVERSE HOME LOANS LLC

41

41.

CHERRY CREEK MORTGAGE CO INC

15

19.

EQUIPOINT FINANCIAL NETWORK

40

42.

HOME SAVINGS OF AMERICA

15

20.

NEW DAY FINANCIAL LLC

37

43.

MONTGOMERY MORTGAGE INC

15

21.

MIDCONTINENT FINANCIAL CENTER

33

44.

OPEN MORTGAGE LLC

15

22.

SENIOR MORTGAGE BANKERS INC

31

45.

PRIMELENDING A PLAINSCAPITAL CO

15

23.

FIRST NATIONAL BANK

30

46.

UNIVERSAL LENDING CORPORATION

14

24.

M AND T BANK

30

47.

UPSTATE CAPITAL INC

14

25.

GREAT OAK LENDING

29

48.

AUGUSTA MORTGAGE INC

13

26.

ROYAL UNITED MORTGAGE LLC

28

49.

HARVARD HOME MORTGAGE INC

13

27.

PRIORITY MORTGAGE CORPORATION

27

50.

UNITED NORTHERN MORTGAGE BANKERS

13

28.

MAS ASSOCIATES

26

TRR | 7


l

the Contributors l

l

Alain Valles

John K. Lunde

6

6

The Report, pg 7, 9

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

7

7

8

9

The Advisor, pg 15

Alain Valles, CRMP, is president of Direct Finance Corp, Hanover, MA. He has obtained the CSA designation, a masters in Real Estate from MIT, an MBA from the Wharton School, and graduated summa cum laude from the Univ. of Massachusetts. Alain’s mission is to improve the quality of life through responsible financing. 781.878.5626 | avalles@dfcmortgage.com

l

l

Ralph Rosynek

Brett G. Varner

Ask the Underwriter, pg 10

Ralph Rosynek has been The Reverse Review Ask the Underwriter for more than two years. He is an industry HECM consultant and trainer, leveraging many years of executive and owner skills and knowledge in the reverse mortgage space including HECM Direct Endorsement credentials. Ralph is currently a seated Director for NRMLA and co-chairs the Professional Development Committee. 708.774.1092 | rrosynek@yahoo.com

10

The Perspective, pg 12

Brett G. Varner is the newly appointed News Editor for reversereview.com. He has served the mortgage industry for 10 years in leadership capacities in sales, marketing and operations. His unique and knowledgeable perspective is focused on developing useful content and strategies in a forum of open and lively debate. brett.varner@reversereview.com

9

8

10

11

8 | TRR

l

l

Brian Sacks

James E. Veale

The Advisor, pg 14

Brian Sacks is co-founder of reversemortgagesuccces.com. He has been in the mortgage industry for over 25 years. Unlike many others, Brian orginates reverse mortgages each and every day! If you would like to profit from the largest niche to ever hit the mortgage industry grab their free course and profit producing tips at reversemortgagesuccess.com

11

Taxation on Foreclosure, pg 32

James E. Veale is a Senior Vice President at Security One Lending, Inc. Jim is also a California CPA and real estate broker with a master’s degree in business taxation from the University of Southern California.


The Reverse Review December 2010 /January 2011

the Report

INDUSTRY SUMMARY Retail Endorsement Growth

-14.21%

September Endorsements Retail and Wholesale Volumes

Wholesale Endorsement Growth

-4.27%

- Reverse Market Insight

Total Endorsement Growth

-10.21%

We already knew that September was a down month for endorsements in the industry overall, but now we can look at the tally in a bit more detail.

* Figures Above Reflect Change from Prior Month

Trailing Twelve Month Endorsements

After several months of the broker/wholesale channel losing the volume battle, the down market showed less decline (-4%) than the retail/direct channel (-14%). One month isn’t going to change the tide of regulation

and resulting transformation of some brokers consolidating into direct

lenders while others become loan officers at larger institutions. That said, brokers are nothing if not scrappy and we’ll see more than a few stay on the broker/wholesale side as it transitions to TPO.

10,000

We’ve also been closely following the breadth of our industry’s recovery

8,000

from the May volume lows, as measured by lenders above/below their

6,000

May volume figures. We’ll be the first to caution that normally you

shouldn’t look at individual months as especially important when using

4,000

endorsement data, but in this case the decline and recovery have each

2,000

been severe enough and long enough to make for interesting comparisons.

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

Wholesale *Numbers Represent Months

RETAIL UNITS CHG%

WHOLESALE

TOTAL

UNITS CHG%

UNITS CHG%

10

4,081

4.56%

4,692 -15.72%

8,773 -7.36%

11

3,836

-6.0%

3,901 -16.86%

7,737 -11.81%

12

3,954

3.08%

4,326 10.89%

8,280

1

3,171

-19.8%

4,450

2.87%

7,621 -7.96%

2

3,124

-1.48%

3,890 -12.58%

7,014 -7.96%

3

2,783 -10.92%

3,038

-21.9%

5,821 -17.01%

4

2,692

-3.27%

2,813

-7.41%

5,505 -5.43%

5

2,465

-8.43%

2,086 -25.84%

4,551 -17.33%

6

2,900 17.65%

2,404 15.24%

5,304 16.55%

7

3,358 15.79%

2,521

4.87%

5,879 10.84%

8

3,969

2,672

5.99%

6,641 12.96%

9

3,405 -14.21%

2,558 -4.27%

5,963 -10.21%

TOT

18.2%

39,738

39,351

7.02%

Among the top 10 lenders specifically, several companies seemed to lag behind in increasing loan volumes, while others leaped forward.

As you can see, nine of the top 10 lenders have increased volume since

May, with several showing dramatic increases. As of just two months ago, only five lenders had increased volumes at an almost identical industry

volume (1.4% higher in September). Whatever your thoughts about each of these lending leaders, we can all agree that it doesn’t progress our

industry forward to see volume declines wash out major lenders from our business. g

79,089

TRR | 9


The Reverse Review December 2010 /January 2011

ask the Underwriter then took a deep breath and read the message again. “Thought you might

want to have this before you leave for the holidays,” my assistant wrote.

And there it was, the 2011 desk calendar.

In my rush to finish all of those last-minute items on my checklist before setting out

to enjoy the holidays, I completely forgot

that upon my return, the new year will be under way.

A second wave of reality soon resulted, as

the arrival of this calendar gave way to the dreaded new year’s resolution thoughts that most of us experience at this time

of the year. Rather than procrastinate, I decided to take action.

Recalling the guilt I experienced as I failed each of my 2010 resolutions, I

decided to alter my strategy for 2011

A Different Strategy for 2011 Ralph Rosynek

Yes, without warning, it happened one morning. Such a

kind and thoughtful message attached to

a jolt of reality. I stared at it for a moment,

10 | TRR

and concentrate my efforts in the area of

improving my reverse mortgage skills and knowledge. Pen in hand, I wrote the word “IMPROVEMENT” in the box of the first day of each month for the entire year.

You see, my only 2011 resolution is to review my list of actions thatwill improve my ability to achieve and be s u c c e ssf u l .

My thought process includes: Personal Education

While licensing and regulatory/legislative requirements have created specific

guidelines to continue participating

in offering the product, it is important

that once these minimums are met, we

each continue to participate in accessing available education situations that

challenge our ability to improve beyond those minimal requirements. Customer Education

Sharing knowledge is crucial to improving market share and new customer efforts. Participating in meetings, events and

various forms of media communication to showcase reverse mortgages and provide direct access to product information and availability is a tremendous benefit to those individuals participating in the transaction or seeking information to become a customer.

Best Business Practices

Knowing well what constitutes a best

business practice and adhering to a code of how we conduct our daily business objectives is key to improving the

customer experience as well as raising

the level of professionalism within the industry.

Quality of Work Product

Producing a quality work

product throughout the entire

process is an important component

to a successful transaction and satisfied customer. Extra attention to detail and

communication improves the efficiency of all participants in the transaction.


Communication

Keeping all participants in

the transaction informed and

staying on top of the transaction

will also improve its success, as well as the efficiency in which we are able to provide service to the customer.

Industry Participation

to the reverse mortgage product continues

approach to improving your skills and

borrowers. I believe a focused concentration

I believe adopting a “sum of the parts” knowledge is a long term-success strategy. A wider perspective, gained through sharing and participating in the reverse mortgage

space, will reward the commitment of extra

time spent in many aspects of your personal efforts as you continue to provide service.

Pen in hand, I wrote the word “IMPROVEMENT” in the box of the first day of each month for the entire year.

Monitoring and Adjusting

Evaluating your progress and performance through feedback and reflection on issue

resolution in prior transactions will improve the ability to provide a higher level of

service and greater ability to achieve going forward.

2011 will no doubt present another handful

to address the needs of today’s eligible

on skills and knowledge is a tremendously defensive position to maintain given the implementation of new and/or revised legislation, regulation, guidelines and

definition criteria we will experience in the coming months.

I wish you the best of health, happiness, success and IMPROVEMENT for 2011 as we turn the page, and hope that in sharing you will consider a less guilt-ridden approach to your new year’s resolution…chances are your greater efforts will burn off those 10 pounds anyway! g

of opportunities and challenges as access

TRR | 11


The Reverse Review December 2010 /January 2011

the Perspective participants at the annual NRMLA

mass consolidation and the end of the small

outlook for the coming year was cautious

who are seeking to grow, these challenges

conference in New Orleans, the common

optimism. Generally, most people I spoke to felt that 2011 is going to be a better year than 2010, but there are several

A big concern is the status of the housing

environment. As the housing market begins

see further dips in 2011 before leveling

off and rebounding toward 2012, fallout from value issues looms as a major

issue. Strengthening resources, tools and skills in the initial estimates of home

values continues to be a major focus for

to recover and the size of the qualifying

population continues to grow, combined

with increased recognition of this product as a viable financial tool in retirement

planning, the potential of this industry will attract new competitors. It is just a matter of time.

When the dust of the recession settles and

support for their opinions that will sway

will remain true: Third-party originators

increasingly cautious underwriters and investors.

The rapidly changing regulatory

environment also presents interesting

12 | TRR

industry is a product of the larger economic

originators. At the same time, appraisers work to find the level of detail and

As I look to 2011, I have been thinking of the stories I am most interested in watching unfold. Talking with industry

targets for acquisitions.

Contraction in the reverse mortgage

analysts predicting that home values will

Brett G. Varner

become marketing tools when approaching

uncertainties.

market. With a growing number of

The Small Business Battle for Survival

business broker in 2011. For some lenders

storylines. As the federal and state governments continue to use new

regulations to root out undue risk and restore confidence in the mortgage

industry, there is increased scrutiny on the reverse mortgage sector and

perceived potential abuses. With the

launch of the new Consumer Financial

Protection Agency and the changing tide in Washington, most people agree that

keeping up with the ongoing changes will

continue to keep compliance officers up at

the energy of growth rekindles, one fact

(aka brokers) will continue to be a viable and powerful force in this industry. The truth of the matter is that brokers create efficiency and reach that lenders will

never be able to fully replicate. Of course, bearing more of the responsibility over the originators they sponsor, lenders

will closely manage the quality of loans

provided from those sources. More than likely, lender sponsor guidelines for

approval will ball fairly close to the current requirements for FHA authorization.

Successful brokers have always been an innovative and entrepreneurial force in

the mortgage industry and they will find opportunity on the bumpy road ahead.

night.

The application of compensation rules

For me, however, the most intriguing

also find ground in common sense before

story-line for 2011 is the business makeup of the reverse mortgage industry. There has been much talk about the change in FHA authorization and originator

compensation changes that will lead to

that are rumored to doom the broker will taking effect in April. The primary goal behind these rules is transparency and

fairness to the consumer. It is primarily

about making it clear to the consumer what they are paying for, while also making sure


Ask the

Appraiser

that originators are not over-incentivized

to increase costs, loan amounts or interest

rates beyond what would be customary in a competitive environment.

The wholesale leaders report from Reverse Market Insight continues to show an

industry that is evenly split between retail

and wholesale loan production. Of the top 10 lenders in the industry, only two have

retail channels that are sizably larger than

their wholesale. In both cases, wholesale is not a focus of their business models.

In any case, this is a story with much

intrigue for the reverse mortgage industry and will be watched from every corner. I

look forward to hearing your perspective as

we follow it closely on reversereview.com. g

You’re very own appraiser

You’ve asked &

who is willing and able to answer any question you

throw his way. This spring, The Reverse Review will

debut Ask the Appraiser,

a monthly column fielding many of your unanswered

we’ve delivered.

appraisal - related questions.

Email questions to information@reversereview.com Look for your answer in an upcoming issue.

ORNEY A TT

TRUST REVIEW 

If you are a Lender and you review Trusts in house, you are taking unnecessary risk! Title companies insure that a trust owns the property but does not insure a trust meets HECM guidelines. In an industry that focuses on Risk Management, Attorney Trust Review eliminates the Risk of a loan being unsalable because a Trust approved by the lender turns out not to meet HECM guidelines. We provide: • Risk Management • Amendment To Trust containing required HECM language • Attorney Opinion Letter • 48 Hour Turn Around No risk to lender, our fee is paid only if the loan closes.

Paul N. Lovegrove PC Representing lending institutions for reverse closings for over 15 years

631.669.4370 plovegrove@AttorneyTrustReview.com • www.AttorneyTrustReview.com TRR | 13


The Reverse Review December 2010 /January 2011

the Advisor suggested taking him to the emergency room just to get it all checked out.

10 ways to become THE “Go-To” Person *Try a few at first, but don’t do them all at once. Most

We got him up and dressed but he didn’t

importantly, you cannot be a fake “go-to“ person. You must

look good. As we were helping him down the stairs, he passed out. I mean really

passed out - his eyes rolled into the back of his head and he was not responsive.

Naturally we called 911 and an ambulance

be an expert and you must produce good results.

1

Write articles for local publications about senior challenges and how a

reverse mortgage might resolve the

quickly arrived.

problems. Incorporate success stories of your own.

After getting him stable, the EMTs told

us they were taking him to a particular hospital, Sinai, in Baltimore.

THIS WAS NOT THE CLOSEST HOSPITAL, NOR THE ONE WE INTENDED TO TAKE HIM TO!

Before we discuss why, let me first tell

you that he is totally fine. He was a bit

dehydrated, which caused him to pass out. So why did they take him to a hospital farther away from our home, and…

Becoming the “Go -To” Person Sue Haviland and Brian Sacks

WHAT DOES ALL OF THIS HAVE TO DO WITH REVERSE MORTGAGES? The reason they took him to that particular hospital is because they are known for

having the best pediatric care around town. Seems strange that my 6-foot-1-inch kid

with a size-14 shoe is pediatric, but he is.

Now let‘s just take a step back and pull all

Last Sunday our 14-year-old son, Matt, wasn’t feeling well.

He had been complaining of a headache for a few days but we thought it was just the flu or a cold. Since he wasn’t feeling any

better we decided to call the doctor, who

14 | TRR

of this together.

The lesson here is that everyone in my area

knows that this hospital is the “go-to” place when children are involved, much like you need to be perceived as the “go-to” person when a senior needs a reverse mortgage.

2 3

Be a guest on a local TV show.



Be a guest on a local radio show that

deals with financial or senior-related issues.

4

Write a book. It’s not as hard as

you think. In fact we have helped

hundreds of originators create their own books and radio shows.

5 6

Be active in the community.

Get to know accountants, attorneys, financial planners, caregivers and

others in town. This is much more

than just networking; this is building a true professional network and will set you apart as a real expert.

7 8

Create your own blog and post to it (regularly!).

Have an informational website with relevant, up-to-date information.

It should be much more than just a landing page.


9

Contact your local media and ask them to do articles on

10 

the new HECM Saver program – maybe a story on how you

There are numerous other ways to be seen as the obvious “go-to“

the appropriate product for a senior’s specific situation.

is that there are many options available (and they do not need to

you and your program. A good hook right now might be helped a client with it. Demonstrate that you recommend

Need assistance from the Advisor?

Congrats on Your CRMP… Now What? Alain Valles, CRMP

Offer to speak at local institutions and to various groups.

person. But the point we want you to take away from this article

be costly) to achieve this status. Pick a few and continue to perfect them and watch your reverse mortgage originations grow. g

Send your question to advisor@reversereview.com and it may be addressed in the next issue. create awareness of and appreciation for the letters “CRMP.”

Pulling

competence and associate it with CRMP.

This effort should begin while the ink is still drying on your CRMP business cards!

The “pull” part is the job of NRMLA. In

Start with the achievement itself. Make noise

by its members, NRMLA is educating the

releases, announcement cards to referral

order to make CRMP valued and desired

public about the importance of the CRMP

designation. Just as the American Institute

of Certified Public Accountants (AICPA) has made the “CPA” designation the standard by which all other tax and accounting

professionals are measured, so NRMLA is doing for CRMP.

Earning the designation of Certified Reverse Mortgage Professional (CRMP) from the National Reverse Mortgage Lenders Association (NRMLA) is a significant achievement.

By educating the public and aiming specific

— expertise, experience and ethics —

who have attained CRMP status. We want

mortgage services to your clients. But

mortgage to seek out a CRMP in the same

CRMP and understand what it means, the

planning and preparation.

your business.

Pushing

Making CRMP meaningful will require a

at a local level. You need to do your part to

communications at trusted advisors (i.e. attorneys, accountants and financial

planners), NRMLA can give sanction to

CRMP as the sign of a preferred provider.

This will help to “pull” customer inquiries

about your accomplishment through press

sources and ads in local publications. Don’t let people guess what “CRMP” stands for; define the designation and its meaning clearly in order to build recognition.

Make sure you include an explanation of CRMP in all of your collateral materials,

on your website and in all presentations. Talk about CRMP at your business lead exchanges and Chamber of Commerce

breakfasts. Be proud of it and describe why it makes you a superior reverse mortgage provider.

It is proof that you have the “three E’s”

and create a public demand for loan officers

You can’t expend the time, energy and

necessary to provide exceptional reverse

seniors who are considering a reverse

then magically expect the world to recognize

unless prospective clients know about your

way a taxpayer insists on a CPA for tax

designation has very little value to you or

two-pronged approach, a “pull and push” to

The “push,” on the other hand, must come

money required to attain CRMP status and and understand what it means. Becoming certified is only the beginning of the job.

Now you must make the most of the title by

actively and aggressively promoting the fact that you are a Certified Reverse Mortgage Professional. g

develop an aura of professionalism and

TRR | 15


The Reverse Review December 2010 /January 2011

the Conversation The executive staff was hung over with cheer - Grand visions of back-end monies fluffed up their rear.

More products to the streets, with a creative touch - Maybe a real proprietary product am I asking too much?

When at the elevator door, there arose such a fuss - In came the processors, stumbling out from the bus.

Or a company that cares about the people it employs - Not just the few that will die with more toys.

Oh what a sight, one I didn’t expect - “Sit down,” they whispered, “I sent you a text.”

We need quicker counseling and appreciative appraisers - No more HUD letters and underwriters with Tasers.

I tore open my phone and put in my code Can’t trust a soul in this humble abode. It read, “We need a raise per file, and no more late nights - A new hourly schedule and the same L.O. rights.” I glanced behind at the stumbling crew WTF is this and why the new do? I thought at that moment, “This must be a joke - For the industry is down, and the printers are broke.”

The HECM Day After Christmas Dave Bancroft

‘Twas the day after Christmas, working as a lender - Not an

employee was stirring, not after this bender. The pipelines were hung, for the L.O.s not there - In hopes that they might find some time to care.

16 | TRR

They whistled and shouted, “This ain’t no game - We need better rep, more dedication and someone to blame.” I screamed, “O’ Come on Alex, Katie and Ray, - You know the new counseling rules are so gay. I can’t do much with the values of homes Or an underwriter with an eraser that looks like a gnome. So you’d best pump your brakes and get it together - Our reverse mortgage industry is under the weather.” “Captain,” they quipped, “What’s up with this funk? - Maybe we should tell rule makers, ‘Don’t touch my junk.’” Legislatures, you shouldn’t tinker or prod Let the markets run their course, don’t touch, just nod.

Less compliance, audits and expensive bonds - Cool should be the tempo, bring back the Fonz. More approved lenders and Ginnie guarantees - We want straight talk from all, especially pressured A.E.s. After a while, I slowed to a sigh - It’s been a long time coming for this diatribe. Cozy in my chair, I stared at the staff - Joy overcame me and I let out a laugh. We are all still working, and most doing good - Yes, there are problems, but this is our ’hood. Santa may have left, but opportunities abound - Right then through the door, came FedEx Ground. Arms stacked with packages, oh what a sight! - He said, “Sign here and here,” and disappeared to my right. I turned on my heel and couldn’t help but smirk - Exclaiming, “Stop your bitchin’ and get back to work. Be glad we can offer the HECM product of choice - Bringing happiness and peace to the senior voice.

Here’s to our futures, may they be steady and bright, Happy Christmas to all, and to all a good night.” g


the

E

Essentials

The Essentials | i’sen sh l | - your monthly source of in-depth information, industry updates, highly opinionated views and at-your-fingertips news. John Smaldone Michael Banner Lori Eshoo J a m e s E. V e a l e

It takes a lot to create an attention-grabbing, informative article and The Reverse Review is very fortunate to have worked hand in hand with industry leaders over the past couple of years. We are always searching for new writers and industry-related articles. If you are interested in contributing your views and have what it takes to intrigue our readers, we would love to hear from you! Email emily@reversereview.com to start the conversation.

TRR | 17


The

SAFE Act:

Will it Serve its Purpose? The industry

Author Name

anxiously awaits the changes that come with the passage of the SAFE Act. John Smaldone


The SAFE Act (The Secure and Fair Enforcement for Mortgage Licensing Act of 2008) is one of the most confusing pieces of legislation put through

Congress in a long time. >>


After the most enormous expansion of values ever seen in the U.S. housing market, we also experienced the greatest economic and housing market crash since the Great Depression. For most of us, this was the beginning of the largest number of loan defaults and foreclosures we have ever seen. Credit tightened and financing became difficult to obtain, even for those with good credit and income. Home prices plummeted. The U.S. home foreclosure explosion was and continues to be a contributing factor in the global economic crisis. Congress, along with the American people, were taken off guard: Everyone was looking for answers. Why did this crisis occur, and how are we going to get this nightmare under control? Congress and the agencies turned their attention to the mortgage lending industry. This was an opportunity for the analysts to put the blame on mortgage loan originators and mortgage companies. The analysts were and are eager to blame the originators. They were also eager to make a point to emphasize that over the years loan originators had been >>

20 | TRR


lax or even deceptive

The analysts don’t mention

Securities were being

loans. This was not an

that were created after

vanilla product, then salt

entirely wrong analysis;

on the contrary, this was

and is a contributing factor to our problems, but not necessarily the primary cause.

We never seem to hear the

real story behind situations such as who is to blame

for the foreclosures, loan

defaults, the economic crash

and mortgage lending fraud. As an example: you do not

hear the analysts talk much about the Gramm–Leach–

Bliley Act President Clinton

signed in 1999. This was the act that eliminated much of the The Glass Steagall Act

all the wild loan programs the act was signed and

introduced, such as “No

Income, No Asset Loans,” “Option ARM Loans”

“Negative Amortization

Loans” and even the “125% Loans With Stated Income Only.” I could go on and

on about the kind of loans

that were created between

1995 and 2007; this hayride went on for more than 12 years. Loan originators

were making more money

than ever and the subprime market was here to stay. I

could go all the way back to Reg-Z, but that story is for another day.

and opened the floodgates

The entire lending industry

did away with the most

competition was keen. In

to borrowing. This bill

normal and prudent loan underwriting guidelines.

We rarely hear the

federal government or the news media stating that the

real intentions were to stimulate a false, long-term growth by creating the

largest amount of

debt in the hands of

the American people. Housing loans, credit card

debt and overall borrowing soared to record levels. The

continuing accumulation of

debt lasted for over 12 years. The Gramm-Leach-Bliley Act signed by President

Clinton was the fuel that started the fire!

was uncontrollable. The order to compete in the

marketplace, lenders were creating new and wild

lending programs that Wall Street, Fannie Mae and

Freddie Mac all supported. Through its “Negotiated

Deals Desk,” Fannie Mae

bought into various lender

created programs and issued commitments on them.

pooled together with

and peppered with toxic loans. Wall Street firms

were getting these securities insured by the likes of AIG as long as they were able to be rated by the rating

agencies. The firms were getting triple – A ratings

on these securities, which were yielding better than a normal triple – A rated

security with 100% vanilla product in them. The

tainted securities were

triple – A rated because

of the insurance feature.

Why do you think so much of the TARP funds and

stimulus money went into AIG for bailout purposes and probably still is?

Claims started to skyrocket in the later years when

loans started to default.

The wave of defaults and

foreclosures are by no means over; they will continue. The federal government

could not allow AIG to go

under. Don’t forget China,

Russia, Germany and other

countries were buying these securities! The yields on

these securities were >>

The federal government says we must put most of the blame on the mortgage originator and the mortgage companies – they were the No. 1 culprits for all that has happened.

The truth is,

in qualifying buyers for

NEW YORK, NY -- SEPTEMBER 30, 2008: A Television Camera is Ready for Action Outside the New York Stock Exchange on September 30, 2008, the day after the record-breaking 777-point drop in the Dow.

the federal government, through its own deceptive methods of growing the economy, lured the predatory originators into the industry.


very attractive, enough for these countries to hop on the bandwagon and buy, buy, buy.

federal (SAFE Act) exam and meet any state requirements.

Fannie Mae and Freddie Mac were right in

What is the goal or purpose? The goal of

some of these securities from Wall Street for

government oversight and control over

the thick of things. In fact, they were buying their own portfolio! Do we actually believe all of this had no bearing on why we are where we are today?

this legislation was and is to establish more individual mortgage loan originators, with what government assumes will increase consumer protection.

The process is expensive and in many cases

the originator is paying the freight. All statelicensed and federally registered mortgage

loan originators must be registered with the Nationwide Mortgage Licensing System & Registry (NMLSR) maintained by the

Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

The federal government says we must

Government oversight did not work before

In my opinion, the new licensing

originator and the mortgage companies

Now, all of a sudden, it is supposed to

definitely rid the industry of many of the

put most of the blame on the mortgage

– they were the No. 1 culprits for all that has happened. The truth is, the federal

government, through its own deceptive

methods of growing the economy, lured

the predatory originators into the industry. In short, the bad guys were tempted with candy and they took it!

Something had to be done to control all the predatory lending and deceptive practices

of originators, right? Predatory lending and

what many originators were doing had to be stopped.

However, we must look at why the states

and the federal government along with its

agencies were not capable of enforcing what laws were on the books. Sound familiar?

due to incompetency within the agencies. work because the federal government

makes changes to their creative pieces of

legislation, which they never understood in the first place!

Residential traditional forward loans

Reverse mortgages

Commercial real-estate lending

Consumer lending

Requirements of the SAFE Act For all residential mortgage loan originators, except employees of federally charted institutions

Fingerprinted

Background checked and approved

Never have been convicted of a felony

The originator must be solvent

Never have had a revocation of a loan originator license

Complete the 20-hour pre-licensing educational course Correctly answer 75% of a 100-question written test

For each state the originator must post a surety bond, pay into a state fund or prove a minimum net worth

Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Mortgage Licensing Act).

Passage of the SAFE Act did not mean the act was implemented. The projected and announced date for implementation is

here: December 31, 2010. In order for an

originator to originate a loan and for it to be paid, he or she must have passed the

22 | TRR

of this new piece of legislation.

Now we come down to a new and confusing

responded and in July 2008 passed the

However, I see many problems arising out

residential mortgage industry.

System and Registry (NMLSR) for the

interference by big government. Congress

will also temporarily protect the consumer.

for a Nationwide Mortgage Licensing

additional laws.

piece of legislation created through more

predatory type originators, temporarily. It

Let’s look at the lending industry carved into four loan categories:

Primarily, the new law set forth objectives

Instead, our federal government felt that

the way to solve the problem was to create

requirements under the SAFE Act will most

The first two categories are the lending branches affected by the SAFE Act.

The same exam is given to those individuals that do traditional residential loans and to those doing reverse mortgages. You may say, so what? The reverse mortgage and

traditional residential lending industries

are like night and day to one another. The

exam under the SAFE Act is 95% comprised of and based on the traditional lending

industry or the forward lending industry, as we call it.

A mortgage loan originator employed by a

The education received that is in connection

any credit union or an owned and controlled

is very good; don’t get me wrong on this.

only register in all states. All other mortgage

in the business of originating loans, as well

licensed under the SAFE Act and licensed in

good points and benefits of the act.

federally insured depository institution, or

with the federal SAFE Act licensing program

subsidiary that is federally supervised, must

The education will benefit anyone that is

loan originators, without exception, must be

as benefiting the consumer. There are very

any state, where applicable.


predatory tendencies

the consumer any more than they were

before?

play.

than we have ever seen

I feel this will be the

The baby boomer population is soaring. The

We can’t afford to

will be enormous. It is obvious the federal

case in the future.

lose many of those that have been in

good

the reverse mortgage

Are WE losing

people

industry for years. Most of

these individuals are in the

business for the right reasons.

If the SAFE Act holds - up and it probably will - I feel we will need three types of licenses within the act, which I suggest to be the following: •

protected before the SAFE Act came into

A traditional/forward license that would

need and demand for reverse mortgages

government’s goal is to eliminate as much

of the small mortgage broker and even small community banks as possible. The demand for reverse mortgages should be strong;

however, I am afraid as time goes by we are going to see many lenders and mortgage brokers hanging it up.

We will always need people that have the passion for our seniors: individuals that

are educated in our product and those that understand what the phrase “fiduciary responsibility” means!

allow those not interested in originating reverse mortgages to originate traditional loans only. • However, we must

allow those that are not interested in

look at what can

originating traditional loans to originate

occur because of the complexity of the

required licensing act, when it pertains

to the reverse mortgage industry. We have

many originators that are seniors themselves and many of these originators only have

experience in the reverse mortgage industry. I have talked to many originators and a lot of them are not going to take the exam. In fact, some of them are going to leave the industry entirely.

Could we be cutting off our nose to spite

our face? Can it be that while initially we are eliminating the bad blood in our industry and establishing new and strict criteria to become a loan officer, we are also losing good people? Good people who have

served our senior population with passion, excellent service and sound counseling?

Could it be that we will see sharp-dressed, well-educated individuals who can pass exams with no problem but have more

A reverse mortgage license that would

reverse mortgages only. •

A combination license that would encumber both, traditional and reverse mortgages.

The SAFE Act is meant more for those who are not part of or affiliated with a federally

charted institution. Present day, the federal umbrella is the place to flock to if you are

an originator. In the not too distant future,

don’t think for a moment that the SAFE Act requirements will not be implemented for a loan originator working for a federally chartered institution.

This scenario may retain those that would

The industry is changing; many companies

industry and only this industry. The exam

are placing a lot less emphasis on building

should not be as intimidating as what is

goal has always been to establish trust

like to remain in the reverse mortgage

are going to the call center concept. We

will be on the product they know and

relationships, which is sad. Our first

before them today.

between the senior and the originator and

We still fall back on enforcement; those that

that. Will we and can we maintain this trust

relationship-building has accomplished

want to prey on our senior population will

factor with all the change coming our way?

will put us right back where we started.

I am not against change; I know it is needed

If HUD, the states and other regulatory

we go too far in changing our ways and our

are on the books, the SAFE Act just

with traditional methods and values, we

of a program our federal government

program. g

find a way to perpetrate such fraud, which

because of the times we are in. However, if

authorities do not enforce the laws that

approach to the industry by doing away

becomes another administrative nightmare

may see the beginning of the end of a great

created. We then wind up not protecting TRR | 23


The Reverse Review December 2010 /January 2011

the Essentials

Michael Banner

2010...And We Thought 2009 Was Rough? Finding the good in the year behind us.

A

lmost exactly 12 months ago I sat down at my computer to write an editorial for The Reverse Review’s 2009 year-end double edition. I named the article “2009: The Year Success Became a Moving Target.” I had fun writing this piece and received a lot of positive response, which I always enjoy immensely. ¶ I started last year’s article with this statement: “If you are a reverse mortgage professional and you survived 2009, then you deserve congratulations. It was the most unusual year I have experienced in my 28-year career. “ >>

24 | TRR


Well, guess what? If you are a reverse mortgage professional and you survived 2010, then you deserve congratulations. It was the most unusual year I have experienced in my 29-year career!

Did you feel that? It’s reverse mortgage déjà vu… It’s not like there weren’t some incredibly positive moments in 2010. I think there

were two of them, to be exact. And they

may have actually saved this product and our industry from extinction, though few would admit it.

The first was in April. The decreasing of the origination fee, combined with the

elimination of the set-aside fees, was a gift from reverse mortgage heaven, in my opinion. No matter what anyone

says, the No. 1 obstacle that has kept the reverse mortgage from being embraced

as a mainstream product has always been the up front costs. This was an incredibly positive step for us as an industry and I

thank our industry leaders for stepping up to the plate.

The second came in October with the

introduction of the HECM Saver product. Whereas the reduction of fees made the reverse mortgage competitively priced

with other government-insured loans such as the standard FHA or VA, the HECM Saver – with its no upfront MIP – has

closing costs that rival a zero-point, fully documented, conventional loan. This is

incredible and exactly what we needed to

introduce this great product to the financial community.

But these two giant steps forward were severely hampered as home values

continued to plummet throughout most

of the nation. Here in Florida, where I do

the bulk of my business, nearly two-thirds of the inquiries coming into my company

never even made it to the application stage.

obstacle most had with this product: the upfront cost!

In fact, if I had to pick the most popular

With my customary and widely recognized

“My house is worth what?”

Orleans to attend the NRMLA trade show.

five words of 2010, they would have to be

The conversations with clients in 2010 were truly more disheartening than the ones

in 2009. It seemed in 2009 many people

were still in denial as to the value of their

home. They just didn’t want to accept the

bubble had indeed burst. I hated those 2009 conversations. Being the one to explain to a senior in need that the one option they

thought was available truly is not, is a very sad position to be in. And the position it left the senior in was even sadder.

But in 2010 the conversations became even more uncomfortable. In my opinion, most people did come to grips in 2010 with the fact that their home was just not worth what is used to be. What

“glass half-full” attitude, off I went to New

I only attended one breakout session in my three days in New Orleans. My goal for

making this trip was to meet with industry leaders and learn firsthand how 2010

affected their short- and long-term views of our industry, and how they saw 2011

unfolding in the midst of this seemingly never-ending recession.

Here are the results of some of those meetings: I finally had the pleasure to meet with

Marty Taylor, Owner/CEO of Stay in Home Mortgage, as well as his Sales Manager, Dennis Luschen; and his son, Brandon

Taylor, Vice President of Marketing. Marty

after accepting that their home had decreased

in value, they then had to hear that it actually

decreased much more

dramatically than they thought. This was a

double hit to these great seniors, and it really hurt.

2010 was another

rough year. But we survived, we still

have our loan limit of

$625,500 that so many

thought would be gone by now, and we have

two reverse mortgage

options to offer seniors (we literally doubled our product menu!).

Most importantly, we eliminated the No. 1

and I have become good LinkedIn friends via The

I feel made it worse was

It’s not like there weren’t some incredibly positive moments in 2010. I think there were two of them, to be exact. And they may have actually saved this product and our industry from extinction, though few would admit it.

Reverse Review group over the last two years, and it

was great to finally meet him. To me, these three

men embody everything good about the reverse

mortgage industry. They not only survived these crazy times but have

rebuilt their company and are going strong; they did it without straying from their “the good of the

senior comes first” attitude. I met with Mr. Bob Scott, National Director of

Genworth Financial Home Equity Access’ (GFHEA)

Affinity & Correspondent Relations. GFHEA is

Genworth Financial, Inc.’s

reverse mortgage business

in Rancho Cordova, CA. >> TRR | 25


2010

Year in Review

I have known Bob for several years. He is

prosper. Seeing Mark and Dan achieve the

a true gentleman to spend time with.

is a great thing!

one of the pioneers of our industry and just

Hearing about Genworth Financial’s

Lastly, I also had the pleasure of meeting

was enlightening and very positive.

pioneers of the reverse mortgage industry

commitment to the reverse mortgage space

JAN

NMLS launches public mortgage licensing information resource

FEB

FHA appraisal independence rules take effect

MAR

HECM fixed with no servicing or origination fee introduced

APR MAY 

First 4.99% Fixed HECM introduced

Lender paid MIP introduced, first no upfront fee HECM introduced

JUN JUL

First CRMP designations awarded by NRMLA



Consumer Protection Act passed, creates Consumer Financial Protection Bureau

AUG

Federal Reverse releases final rules regarding mortgage originator compensation

SEP OCT NOV DEC

HECM Saver introduced by FHA

Fannie Mae exits reverse mortgage MBS business

Ginnie Mae announces lift of new issuer approvals Congress extends HECM lending limit at $625,500 through Sept, 2011

26 | TRR

success they have with their business model

Personally, I love it when a large and wellknown long-term care insurance company has that much of a commitment to our

industry. I have always professed that the relationship between long term care and

reverse mortgages is a ship our industry just keeps missing…

I also sat down with Mr. Alain Valles,

President of Direct Finance in Hanover,

Massachusetts. He has vast conventional mortgage experience and has embraced

the reverse mortgage arena and achieved success.

Speaking with professionals like Mark

Browning, principal of HomeChex, and Dan Osterhout of Community Senior Capital is always enlightening for me. They bring a

financial planning mindset to their reverse

mortgage business model (a business model that is near and dear to my heart). Their

vision of utilizing the proceeds of a reverse mortgage as part of an overall retirement

plan for seniors mirrors my own. The open discussions we had about the many ways

a reverse mortgage can be used to assist a

senior, other than the present “needs-based product of last resort,” were great.

This type of thinking tends to look at the

reverse mortgage in a much broader fashion than today’s reverse mortgage loan officer.

Again, in my opinion, bringing the reverse mortgage to the financial community – the

literally hundreds of thousands of certified

financial planners and independent financial advisors – and showing them this is not

just a product of last resort but can play a

valuable role in a senior’s retirement plan,

is the only way our industry will grow and

with the group from MetLife. They are true and it is always a learning experience to

spend time with them. Subjects discussed were the future of our industry itself, the potential the HECM Saver brings to the

table, and the potential of other segments of the financial industry becoming educated on the true benefits of this great product we offer. Having an icon like MetLife so

committed to the reverse industry tells me we are all on the right track.

So, what did I walk away from NRMLA with? The major players are in the market to stay.

They freely admit that the reverse mortgage is a work in progress. It’s going to have to keep morphing to survive this constantly

changing regulatory environment, as well

as the incredibly volatile financial markets, that dictate its future. To me this is a clear

message that we, the retail segment of the

industry, also have to be a constant work in progress and morph with the times as well. Now, with all due respect to the major

players, it’s much easier to accept change

and roll with the punches when you have a balance sheet that resembles that of a fairly nice-sized Third World nation.

For those of us that are very concerned

with the new net worth requirements and

upcoming changes in regulations regarding

our compensation in April 2011, it’s not such an easy thing.

In fact, I met many professionals in New

Orleans that came for one purpose only: to


find a new home. They are as committed

in this industry. This happens to be one of

being recognized as the incredible product it

any giant but simply do not have the

input. I’d like to say I’m going to miss 2010.

the needs-based traditional HECM and the

to this industry and serving seniors as

my priorities and I welcome any and all

wherewithal to do so. In fact, there are some

I’d like to say that, but I would be lying.

great opportunities out there right now for

Damn, I’m glad it’s over!

these entrepreneurs and I wish them the best of luck.

We enter 2011 with a certain feeling of

It’s quite possible that 2011 may be the

come and some of them are still unknown.

apprehension. Many changes are still to

year of the “roll up.” I feel there is a great

But as an industry we are still standing

opportunity for retail industry leaders

proud. Thanks to the constant efforts of

to consider joining forces. A handful

NRMLA and all the players, from the giants

of independents strategically located

right down to the small independents,

throughout the country could be a real force

is. We have two great products to offer now: HECM Saver.

So we keep moving forward. We keep the needs of our seniors our No. 1 priority

and we help as many of them as we can.

Nothing silences critics quicker than success. I wish you and yours a very happy, healthy and prosperous 2011. g

slowly but surely, the reverse mortgage is

OLUTIONS

2

RES

11

New year’s resolution: a commitment that an individual makes to a project or the reforming of a habit, often a lifestyle change that is generally interpreted as advantageous. ¶ The Reverse Review asked people in the industry what their new year’s resolution was for 2011 and we received an overwhelming response. Here are some of our favorites…

Sarah Hulbert Seattle Mortgage Dust off my Gratitude Journal and take time every day to record at least one thing for which I am grateful, be it in my personal or professional life. I think it is so important for all of us to step back and reflect on how blessed we are in our lives!

John LaRose Celink Celink resolves to continue fostering an attitude of tremendous gratitude for our industry, our clients and their borrowers. I personally resolve to always do the right thing, not take myself too seriously, and spend more time with my grandchildren.

Dave Bancroft Give more, love more, hug more, kill less, maim less, wound less, pray more, spend less, drink no more and no less!

Atare Agbamu Author, Think Reverse In 2011, I resolve to give thanks more, to laugh more, to sing more, and to dance more.

Lori Eshoo National Tax Search To implement a full-service tax and insurance program for homeowners and lenders.

Michael Detwiller, CEO, Mortgage Cadence, LLC To personally influence two in-need borrowers to consider a reverse mortgage as part of their overall financial plan.

Brett Varner The Reverse Review To align with others that share an entrepreneurial spirit focused on growth and development through innovation, education and teamwork.

Trevor Gauthier Mortgage Cadence, LLC To become the single most sought-after company for origination technology and document solutions in the reverse mortgage space.

Karen Keating Tradition Title Tradition Title’s goal for the year 2011 is to assist our clients to increase their overall reverse mortgage volume by 25%. My personal goal for 2011 is to be in the best shape physically.

Jim Veale S1L As to the RM industry, my resolution is to begin building a relevant educational bridge into the professional gatekeeper community.

John Smaldone Hanover Financial I will help and befriend 10 more of our troops overseas in 2011 than I did in 2010.

TRR | 27


The Reverse Review December 2010 /January 2011

the Essentials

e c n

a r u

s n i

social security Lori Eshoo

Unwinding the Property Tax and Insurance Obligation Spotlighting the concerns that lenders and brokers are facing.

A

ccording to USA Today, over 3 million of the 79 million baby boomers will reach the retirement age of 65 in 2011. Numerous organizations will be perceptibly affected by this substantial occurrence. If each industry sector hasn’t already made the necessary changes to their business structure in anticipation of the tidal wave of retirees, they may want to consider doing so as quickly as possible in order to handle this growing market in a successful manner. If lenders, brokers and other businesses don’t take the appropriate steps, they may lose out in billions of dollars in revenue by not catering to this market for the next 20 years. >>

28 | TRR


Decades ago, the question of how senior

important, but it may actually be the most

Stanley also believes that counseling can

future once they retire was a hot topic

just for seniors but for the lenders and

on the options that are available, but an

citizens would financially secure their

for many organizations. In retrospect, a government solution to this issue was

critical action in the overall process, not third-party vendors as well.

The HECM counseling agencies may

Mortgage (HECM), which is managed

options on lender and third-party services.

through the U.S. Department of Housing

and Urban Development (HUD). As long

as each party adhered to the requirements, the HECM option seemed to be the ideal

financial solution because it benefited both the borrower and lender.

So why is the HECM, which seemed to be

essentially act as the gatekeeper, providing The reverse mortgage counselor’s access and knowledge of various available

reason may be, the industry is determined to find a solution that makes sense for all

relevant parties and ultimately, the senior community.

Here, we will dig a little deeper and

place the spotlight on the most prevalent concerns that lenders and brokers

are currently facing: property taxes

and homeowner’s insurance defaults.

Furthermore, we will discuss how these two factors relate to the overall HECM portrait and the pertinent roles that

lenders, brokers and third-party vendors play.

Counseling with the Right Organization As industry associates may already know,

the first step in helping senior citizens rests on the shoulders of the HECM counselors.

These agencies are responsible for advising the borrowers of eligibility requirements,

financial implications and any alternative solutions to obtaining a HECM. This

initial step may be perceived as the least

paycheck before we could spend it?”

Although seniors who plan on retiring

counseling agencies across the U.S.

determine if their current expenses will

International Senior Vice President of shares his insight from a counselor’s

perspective: “One thing we have learned from all our

will receive Social Security benefits, they

may have to re-evaluate their resources to

Education and Community Relations,

played a considerable role. Whatever the

deduction was not taken directly out of our

(RMCA) is the entity that trains the many

Mortgage Counseling Association

Perhaps the deteriorating real estate market industry during the last several years have

would really save for retirement if our 401k

the consumer and lender. The Reverse

Chuck Stanley, Money Management

and the credit issues that plagued the

also added, “Honestly, how many of us

From the Lending Institution’s Perspective

programs will continue to benefit both

dormant for a while, now seeing a burst of activity within the lending industry?

easier solution in the marketplace is needed for reverse mortgage borrowers. Stanley

to create the reverse mortgage option,

specifically the Home Equity Conversion

play an increased role in educating seniors

be covered by the fixed income. With the

increasing concern that the Social Security system may potentially collapse, finding alternative options for income may >>

experience

in educating consumers is that it is

very hard for

consumers to

save for tangible wants or needs. It is even

harder to save for something they see no immediate

material reward for, such as insurance

and taxes. It

is, of course,

essential to save for insurance

and taxes, but it is easy to

Are you concerned about tax and insurance defaults? National Tax Search, a certified Women’s Business Enterprise (WBE), provides web-based services via our award-winning TaxQ system. Take advantage of the following:

Tax Certification (snapshot of tax status) Delinquent/Sold Tax Monitoring Property Tax Payment Processing Escrow Analysis and Tax Projections Property Tax Credits and Exemptions Insurance and Flood Determinations Property Inspections Death Certification Valuation Analysis and Tax Appeal Services

let immediate

needs or wants take priority.”

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TRR | 29


become a vital necessity within the next

lender’s risk on their investment, seniors

According to studies conducted by the

a more limited loan option with lesser funds

two decades for the senior community.

who are at a higher risk of default are given

trustees who monitor the government’s

elderly programs, Social Security may run

out of funds as early as 2037. Although this date surpasses the end of the baby boomer retirement era, changes in government

policies and regulations may potentially

age of 70 are most likely to default on their reverse mortgage loans, so the HECM

counseling agency and the lender should

needs.

Moreover, with the economy just recently

The HECM has made a big impact on

corporations eliminating pension plans, the

during retirement because in many cases,

emerging from recession and with many

need to secure finances at retirement is even more crucial to balance any obstacles that seniors may face during their retirement

period. With that being said, the lending

seniors in managing their means of living the funds have been used to help pay for the borrower’s remaining mortgage balance, property taxes, homeowner’s insurance, home maintenance and other debts that

industry becomes the main focal point in

the next step as seniors are ready to move forward with the HECM process. The

flexibility of the lending institution and their loan options will determine if seniors will

experience a retirement process that is either manageable or unbearable.

may have accumulated. Without the

HECM, many seniors may even be forced to

postpone their retirement in order to sustain their current living arrangement, keep up

with the costs of living and prepare for the unexpected expenses that may transpire. Although lenders are part of the big

Lenders and brokers obviously want to

make the whole experience for the seniors as painless as possible without losing the

profitability of their investments. Lending institutions and other agencies have been

equation in getting seniors to a point of

financial stability, third-party vendors may

also play an integral role in this multifaceted picture.

service offering that is more attuned to the

Benefits of the Third-Party Vendor Relationship

risk group and the high-risk

Before the borrower decides to accept a

reduce the

fully understand that certain liabilities still

working together to provide a modified different types of borrowers: the lowcrowd. In order to

2

670 , 1 2

9 14, NORTHEAST

WEST

17,4

remain their obligation, such as paying

property taxes, homeowner’s insurance and

66

ongoing home repairs. Unlike the traditional

,0

17

SOUTH

HECM loan, they must also be aware and

26 0,1 6 8,0

9 ,56

MIDWEST

Source: U.S. Census Bureau, Population Estimates as of July 1, 2006.

studies show that borrowers under the

product that optimizes everyone’s financial

expected.

mortgage loan that gives borrowers an

option to escrow for taxes and insurance premiums, a reverse mortgage does not carry a regulatory requirement for an

43 29,

4

number of years until depleted

available from the HECM loan. Industry

focus more effort on education and offer a

end Social Security benefits earlier than

Social Security

escrow account.

Baby Boomer

Population by Region

0

10

20

Yr depleted 30

Yr change in Projected depletion

‘00

2037

3

‘01

2038

1

‘02

2041

3

‘03

2042

1

‘04

2042

0

‘05

2041

-1

‘06

2040

-1

‘07

2041

1

‘08

2041

0

‘09

2037

-4

‘10

2037

0

Source: Office of the Chief Actuary, Social Security Administration.

Borrowers will need to either put away enough funds each year to cover these

expenses or find a way to establish escrow services to reduce the risk of defaulting

on the loan. Ensuring that property taxes and insurance premiums are paid in a

timely manner is essential because once the borrower neglects to make these payments; the lender will also discontinue paying

the borrower the funds from the HECM

loan. Clearly, both parties will lose as the

borrower will be in deeper waters without

the funds, and lenders may not receive the

return on investment they were anticipating. Lenders would, of course, have more control over these liabilities if an escrow account was established.

One solution is to develop a partnership

with a third-party vendor, who specializes

in the administration of property taxes and has the capability to establish an escrow

account to collect the appropriate funds. In this unpredictable market, using a third-

party vendor provides more flexibility and informs all parties of the detailed property tax data, so payments can be made timely


and accurately.

HECM are following protocol

Lenders are aware that

protection needed to retain the

managing property taxes can be a burdensome undertaking and

and will also provide lenders the value of their investment.

unless they are familiar with the

Today, lenders can access critical

each taxing jurisdiction (20,000-

third-party vendor with 24-hour

ever-changing requirements of

plus in the U.S.), property taxes can become delinquent and

accrue penalties. In a worstcase scenario, the property

owner can lose their investment

through a tax sale or foreclosure. Additionally, due to the current

economy, taxing jurisdictions are experiencing budget cuts and a

reduction in staff, resulting in a reduced threshold in assisting borrowers with reporting and

payment requirements. As taxing jurisdictions continue to make changes to their procedures

and requirements and execute late releases, the importance

of working with an expert is accentuated.

Vendors can assist lenders in their efforts to mitigate loss and reduce fraudulent activities by offering other value-added services,

such as property inspections,

insurance monitoring and death certificate searches. Vendors can also provide other services such

as an annual abatement or senior credit review, and tax appeal

services that may directly assist

seniors in reducing the assessed

value of their home and property taxes. Vendors can work with all relevant parties, from the lender to the FHA-approved appraiser, to meet the requirements for a reverse mortgage and lessen

any apprehension the borrower may be feeling. These services

will ensure that borrowers with

The RESPA Challenge

property tax information via a

web-based technology. Property tax vendors can also make the

payment process much simpler by ensuring that payments are properly posted at the taxing

jurisdiction for their escrowed

borrowers and also identifying tax liabilities that need to be

properly monitored when their

non-escrowed borrowers fail to

make their property tax payments. Lenders should also keep vendors in mind who can offer services in an automated method to reduce

errors that may occur with manual processes.

Despite the many barriers, the HECM may become the only option for many seniors. On

the other hand, if borrowers are able to handle their financial

obligations in the most opportune

fashion, the benefits will outweigh

lending institutions and third-

Stricter RESPA rules, lower principal limits, a more complex FM1009 and other changes pose a serious challenge to our industry. Lenders will take on additional responsibilities and need to be meticulous while working with brokers. Brokers will lose all or most of the YSP and any mistake made in the GFE could cut into their origination fee as well.

support of government agencies,

But there is also good news around the corner...

the drawbacks in the long run

and provide the peace of mind

they are seeking. In the end, the borrower must absorb all of the information they have learned in making the best decision

concerning their finances to secure their future after retirement.

However, the counseling agencies, party vendors, along with the

should take the responsibility to properly educate and provide

the tools and resources to assist

seniors in achieving their goals. g

ReverseVision Inc.

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

TRR | 31


The Reverse Review December 2010 /January 2011

the Essentials

James E. Veale

Taxation on Foreclosure Part III Determining the amount of debt forgiven.

W

hen it came to reverse mortgages four years ago, the discussion of foreclosures was received as if it were a fruitless mental exercise into the ridiculous and absurd. The value of homes was accelerating, county lending limits were rising, and the potential for the growth of the reverse mortgage industry seemed endless. High accelerated growth in home values covered up many underlying problems, but then came the downturn in the housing industry. How things have changed.Âś Many seniors reasonably expect their reverse mortgages to terminate into foreclosure or one of several similar transactions. >>

32 | TRR


Most have been told that reverse

is greater than the proceeds

free,” which may prove to be

of the property securing the

mortgage proceeds are “tax-

true for many but not for all. Further clouding the HECM

foreclosure future are technical defaults. These were once

believed to be about 1% of all

outstanding HECMs, but now

even the HUD OIG is telling us that number could be closer to 4%, if not 5%. How HUD will

attack this problem still awaits an answer.

In Part III, we will begin

received from the disposition reverse mortgage; or (2) the balance due is greater than

the fair market value of such

property at the time when the

property is transferred to “the lender.” Since there is little

expectation that discharge of

indebtedness will occur with

reverse mortgages outside of

foreclosure-type transactions,

this series focuses primarily on those transactions.

amount of debt forgiven for

Summary of Parts I and II

probe its components.

By federal law [15 USC

Preliminary

are nonrecourse.

looking at how to measure the income tax purposes and will

1602(bb)], all reverse mortgages

The purpose of this series of

HUD specifically declares

income tax information

only in Mortgagee Letter 2008-

articles is to provide general about the discharge (i.e.,

cancellation and forgiveness) of indebtedness related to

reverse mortgages. It is assumed throughout the series that the property securing the

reverse mortgage has only

been used by the borrower as

HECMs to be nonrecourse not

38 but also in Paragraph 1 3C of HUD Handbook 4235.1 REV-1. Despite industry assertions to

the contrary, it is the note that makes a HECM nonrecourse for a borrower, not FHA “insurance.”

a principal residence (unless

Whenever amounts due are

else. Please see the section

in a taxable disposition such

otherwise noted) and nothing titled “Disclaimer” for more information.

For the purposes of this series,

“foreclosure” includes not only actual foreclosure but also its

subset of transactions including short sale, trustee sale, deed

in lieu of foreclosure, and any

other disposition of the property securing a reverse mortgage where (1) the balance due

The RESPA Opportunity

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forgiven on a nonrecourse debt as foreclosure, specific rules

under Internal Revenue Code

(IRC) Regulation (Reg.) Section (§) 1.1001-2 apply. Although

there are no income tax laws, regulations, rulings, or

Can you afford not to use ReverseVision?

court decisions specifically related to HECMs, one of

the leading cases on the tax

treatment of nonrecourse debt involves an >>

ReverseVision Inc.

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TRR | 33


FHA-insured loan [Allan et al versus

It is important that servicers complete

Mr. Yedinak goes on to say: “Essentially,

856 F.2d 1169 (8th Cir. 1988)]. Despite FHA

Revenue Service (IRS) income tax form,

a new appraisal after the loan has been

Commissioner, 86 T.C. 655 (1986) affirmed taking over the loan through default, the

Tax Court (as affirmed by the Eighth Circuit Court of Appeals) treated the transaction as it would any other nonrecourse debt.

The amount of debt forgiven will generally either increase gain (or decrease loss) since

and file the appropriate federal Internal Form 1099-C, when any part of a reverse

mortgage is forgiven whether or not the loss is reimbursed by FHA. Such information is

needed by borrowers and their tax advisers to prepare income tax returns reflecting the amount forgiven.

the amount forgiven must be treated as

the feature allows borrowers to order

originated and if it indicates the value of the property is less than 80% of the outstanding balance of the note, the

mortgage amount due will cease to accrue

interest. However, Generation has the right to order a subsequent appraisal[s] at its discretion and if the appraisal finds the

additional proceeds received in the taxable disposition. To the extent that accrued

interest is forgiven and increases the taxable

proceeds, it is treated as paid and may result in favorable tax benefits.

When forgiveness simply decreases a loss

on the sale of a principal residence, it has no

It is clear that all loan proceeds that are forgiven must be treated as additional taxable proceeds in the determination of gain or loss – but are accrued interest, fees, MIP, and other costs that may be forgiven taxable in the same way?

practical tax detriment since a loss from the taxable disposition of a principal residence is a personal loss and cannot offset any gains or ordinary income.

Even when the forgiveness increases gain, such gain may be:

1 2

Entirely or partially

excluded under the limited exclusion rules pertaining to the sale of a principal residence.

Determining the Amount Forgiven and Its Components

value of the property is more than 90% of

It is clear that all loan proceeds that are

will start to accrue again.”

forgiven must be treated as additional

It is clear from the RMD article that

MIP, and other costs that may be forgiven

interest that is forgiven can expose the

gain or loss – but are accrued interest, fees, taxable in the same way?

Mr. Jeffrey M. Lewis, gave us a hint of

Partially or fully offset by: a) capital losses or B) o  therwise available

itemized and exemption deductions in excess of

other gains and ordinary income.

how much he believes is taxable when proprietary reverse mortgage debt is

forgiven in company materials discussing the Gen Plus Estate Guard feature, which it distributed to its correspondents. Mr.

Generation Mortgage believes that accrued borrower (or heirs) to significant income

tax liabilities. There is little doubt that this conclusion is correct since the relevant regulation and the courts calculate the

amount of nonrecourse debt forgiven as the difference between the amount due on the

debt and the value of the property and cash received by the lender.

John Yedinak cited a portion of those

Generation Mortgage should be commended

(RMD) article titled “The Return of Jumbo

likelihood Generation Mortgage would

materials in a Reverse Mortgage Daily

Reverse Mortgages: A Closer Look,” dated June 17, 2010, stating: “The benefit is that

despite the nonrecourse nature of the loan,

borrowers and heirs are potentially exposed to significant tax liability if the future home value is not sufficient to cover the accrued loan balance.”

34 | TRR

time of the subsequent appraisal, interest

taxable proceeds in the determination of

Generation Mortgage, headed up by

OR

the outstanding balance of the note at the

for providing Estate Guard. There is little

ever be materially harmed by the exercise of Estate Guard since it is highly unlikely that the value of a home would grow to cover the interest not accrued under the Estate

Guard provision, plus all additional accrued interest even if home value returns. On the other hand, borrowers who exercise Estate


Disclaimer

borrower has in the home for income tax

...borrowers who exercise Estate Guard can potentially reduce the impact of income taxes from the cancellation of debt.

purposes.)

Since the proprietary reverse mortgage is nonrecourse, lenders/investors will receive the same amount paid back to

them whether there is a provision like Estate Guard or not. But by electing

Estate Guard, the borrower is forgiven less accrued interest. This feature may potentially shelter the borrower (the

estate or heirs as well) from at least some Guard can potentially reduce the impact of

exposure to income tax liability if any of

income taxes from the cancellation of debt.

the debt is ever forgiven.

For example, a home

Estate Guard could be a big help, especially

appraised at

interest because of home mortgage

balance due on the

situations, electing Estate Guard could

$2,200,000. In two

interest. This would be especially true if

has grown to $1,900,000 but the balance

the increased gain or lower loss was less

surrenders the deed in lieu of foreclosure

would be lowered through the deduction

netting $1,767,000 ($1,900,000 less selling

the rules regarding the deductibility of

$787,900. The borrower would be forgiven

of articles.

hand, if the borrower invokes Estate Guard

It is very doubtful if a feature like Estate

until it terminates, and the loss suffered

reason is simple: If the lender/investor

($2,200,000 minus $1,767,000) with the

HUD is not required to reimburse it.

This could save the borrower potential

It is important to realize that not only

minus $433,000) of increased gain.

accrued interest and any other costs,

(It is important for readers to remember

exclusion and offsets like capital losses

determined from the information provided

mortgage debt forgiven, most HECM

determined by subtracting the adjusted

income tax liability from the forgiveness of

sales price. The example above provides

may not be true for their estate or heirs. g

is currently

if the borrower cannot deduct the related

$1,500,000 but the

interest limitations. However, in limited

reverse mortgage is

restrict the deduction of otherwise accrued

years at termination, the value of the home

the increased income tax liability from

due is now $2,554,900. If the borrower

than the amount the income tax liabilities

and the bank sells the home for $1,900,000,

of the additional accrued interest; however,

expenses of 7%), then its loss would be

interest are beyond the scope of this series

$787,900 of the debt incurred. On the other

now, the loan would be frozen at $2,200,000

Guard will ever be offered on HECMs. The

by the bank would be artificially $433,000

does not charge interest, under current law

amount of the loan forgiven also $433,000. income tax liabilities on $354,900 ($787,900

The IRS requires that readers are

informed that the information contained in this series of articles cannot be relied upon or used to reduce any income tax penalties (or interest). Readers

are encouraged to consult competent

and knowledgeable tax professionals

experienced in such matters to determine how the information applies in specific situations.

The tax rules described are limited to

federal tax rules; state and local tax rules may vary. The information is time-

sensitive since laws and application of laws can change over time.

The series only addresses simple

situations. Far more complicated

situations may exist including but not limited to: •

nonrecourse but also recourse debt is forgiven.

Applicable property was fully or partially used in a trade

or business of the taxpayer

(including rental activities) at the time of foreclosure or in some prior period.

It also does not address other

complications such as use of funds for purposes of: •

Allocation of gain between passive and non-passive

trades or businesses, portfolio, and personal activities.

can proceeds become taxable, but so can including MIP. With the limited home gain

Situations where not only

Allocation of interest between such activities and home

mortgage interest for tax-

that the income tax gain or loss cannot be

available to borrowers who have reverse

in the example. Income tax gain or loss is

borrowers will not incur any additional

This article focuses solely on reverse

basis of the property from its adjusted

debt related to a HECM, although the same

Housing Administration (FHA), known

no information on the adjusted basis the

deduction purposes.

mortgages insured by the Federal

as HECMs (Home Equity Conversion Mortgages), and proprietary reverse

mortgages provided by major lenders.

TRR | 35


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Number

3,550,000 36 | TRR

The number of people who will be turning 62 in 2011.


The Reverse Review December 2010 /January 2011

the Last

Word the HECM Saver fit? Is it just another loan variation, or is it much more?

Swiss Army Knife The full benefit of the HECM Saver quite frankly escaped me when the product’s early details began to emerge. We

understood there would be a reduced upfront FHA insurance premium in

exchange for less money (thus posing less risk to FHA). However, prior to its full

disclosure, we didn’t know just how farreaching the HECM Saver would be.

In essence, the HECM Saver is the Swiss Army knife for our industry, accomplishing several key objectives simultaneously.

HECM Saver: Swiss Army Knife for our Industry

Shannon Hicks

It’s easy for lending professionals to look at a new loan product or design as just another flavor we offer. But in the

reverse mortgage community, where does

1 2

the veil of reduced upfront costs, the

HECM Saver holds great potential to be an integral part of a retirement plan.

3

Third, and generally

unknown, the HECM Saver has spared the reverse mortgage industry from

exceedingly brutal

principal limit factor cuts, protected the

overall HECM program, and dramatically reduced the subsidy request for this fiscal year.

Low-Hanging Fruit The first people to approach with the

HECM Saver are those who had rejected the traditional reverse mortgage due to

high upfront costs. Even prospects who liked the idea of no origination fee may

not have wanted a fixed rate loan, or still

First, the Saver is chipping

disliked the high upfront insurance costs.

and media’s negative

fairness, the Saver is more evenhanded in

The fixed rate and high

leaves their line of credit mostly untouched

that fueled competitive

the spendthrift who burns through funds?

what happens when the

where the borrower “pays as they go” or

away at the public

If you look at it from the perspective of

perception of high costs.

its approach. Why should a borrower who

profitability of these loans

pay the same up front FHA insurance as

pricing began to help, but

In reality, it’s a “risk-based” approach

markets inevitably change? The HECM

as the loan balance grows, thus increasing

reduced upfront costs. One HUD official

with the substantially lower LTV (loan to

Saver is the long-lasting solution with

the “crossover” risk to FHA. However,

described the pricing as “pay as you go.”

value) the Saver offers, one can quickly see the risk of these loans going upside

Second, we now have a

down is negligible. Thus the ongoing FHA

with which we can

losses anticipated this fiscal year for the

community as a lower-

greater. >>

uniquely priced product

insurance charged on Savers will offset the

approach the financial

Standard HECMs, where the risk is

cost alternative. Behind

TRR | 37


application, problem or case design where

Another market to approach are those who have had their existing home equity lines

of credit reduced or flat-out revoked due to

falling home values. Partnering with smaller local banks and credit unions can help find these homeowners who have lost access

or cannot qualify for a traditional HELOC.

Then, of course, there are those parents who cringe at the thought of using up all their children’s inheritance. When managed,

the Saver can give them the cash they may

need while preserving the estate for the next

While new isn’t always better, the HECM Saver is an improvement, an opportunity to reach the retiring boomer generation and a boost for the overall health of our industry.

Reaching out

them with the same generic messages: “I’m

If we were to honestly evaluate our

(please: not income), “financial tool” and

community and professionals, the word

a trustworthy loan officer,” tax-free cash liquidity.

“lacking” comes to mind. Seniors who are

While these statements are generally

advisor typically fall outside the “needs-

imagination of the financial advisor. In

actively engaged with a CPA or financial

based” client we have attracted in the past, yet for the most part, we have approached

38 | TRR

sales force must educate itself on how to

approach financial professionals. A good place to begin is by identifying the most common challenges their clients face. Is

“debt management” a consideration besides asset management alone?

While new isn’t always better, the HECM Saver is an improvement, an opportunity to reach the retiring boomer generation

and a boost for the overall health of our

generation.

industry’s success in reaching the financial

it can provide a solution. Our current

true, this approach fails to capture the

reality a reverse mortgage is merely a loan (not a financial tool) until it has a specific

industry. Adoption of the Saver is a win-win as we better meet the unique needs of the

borrower and bolster the Standard HECM, insuring its health. A Swiss Army knife, indeed. g


keting Lead Improve Grow Debate Discuss RESPA TILA HECM Save Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Lette FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RE SPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compli ance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Dis cuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Mar keting Lead Improve Grow Debate Discuss RESPA TILA HECM Save Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Lette FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RE SPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compli ance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD Compliance Marketing Lead Improve Grow Debate Dis cuss RESPA Advertise TILA HECM Saver Fixed LIBOR Mortgagee Letter FHA HUD with The Reverse Review | advertising@reversereview.com Compliance Marketing Lead Improve Grow Debate Discuss RESPA TILA

A NEW YEAR

A NEW LOOK


Enterprise Lending Solutions, Document Services and Compliance Solutions In every enterprise, there is an underlying rhythm – a cadence – in the execution of mortgage loans. Those companies that have seamless system integration and dynamic data flow across the enterprise are in rhythm and optimize their efficiency at every step. Their business flows in absolute harmony to increase productivity, retain customers, maintain compliance and reduce costs. Now your company can catch the rhythm and reach a whole new level of performance. Mortgage Cadence is orchestrating the ultimate mortgage origination performance by providing a true Enterprise Lending Solution (ELS) that handles both forward and reverse lending, as well as multiple business channels. With the Mortgage Cadence suite of solutions you have access to full end-to-end loan origination functionality, automated underwriting, business rule management,

Mortgage Cadence gives you the flexibility to easily adapt to industry changes and capitalize on new business opportunities; creating a more efficient, agile and profitable enterprise.

product and pricing, workflow automation, document services, and Web portals within one integrated platform. No other system in the market today can deliver this level of fully integrated performance tools and compliance support to accelerate the tempo of your enterprise. July / August 2010

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The Reverse Review, December/January  

A reverse mortgage publication written by the industry for the industry

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