Two Common HECM Misconceptions
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By Ralph Rosynek As loan originators, our ability to overcome objections is key to successful transaction completion. In the formative years of the reverse mortgage industry, it became very apparent that this is a product which cannot be sold. The HECM (Home Equity Conversion Mortgage) is a product which must be delivered with an educational component from loan origination professionals who also understand the concerns of a class of borrowers who have been targeted over time past due to their lack of information and resources. Significant consumer education and information efforts over the past years by industry professionals, U.S. Department of Housing & Urban Development (HUD) counseling resources and reverse mortgage media discussions has greatly improved reverse mortgage loan acceptance by HECM borrowers. Two of the most common misconceptions addressed by today’s product focus are: 1. The bank owns my home: The bank does not own the home. A reverse mortgage is secured by a primary lien on the property, no different than a forward traditional mortgage, with one minor difference. Upon recordation of the lender’s interest, a second mortgage instrument (not a second mortgage facility) is recorded against the property subsequent to the lender’s first lien position. This second mortgage instrument is in favor of the Secretary of HUD, and allows for the seamless transition of loan control should the first lien holder lender become impaired and unable to be responsible for continuing to service and support the loan.
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2. Reverse mortgages are expensive: In the past, the costs, expenses and fees associated with a HECM transaction were greater than the products being offered today. The more “expensive” years were, in part, due to lesser options, features and benefits; lesser loan volume which restricted potential secondary and investment banker interest; and less vendors and resources that were familiar with the product. Today, the costs, fees and expenses associated with the reverse mortgage transaction have been greatly reduced due to greater secondary market investor opportunities recognizing the quality of the product, the restructure of FHA/HUD Initial Mortgage Insurance Premium (IMIP) based upon the initial proceeds use, and the offering of lender credits resulting in additional borrower proceeds. The HECM product may not be the right fit for all eligible borrowers, however, as industry resources continue to whittle away at these and other product misconceptions. The commitment to preserve HECM for use as a viable choice for eligible borrowers to remain in their home, maintain financial independence and assist with retirement planning options has not changed over the years since product introduction in 1989. Now is the time to look at this growing opportunity to reach more borrowers. Your market entry can be very scalable and requires an initial sales commitment to product education and addressing the needs of this class of borrowers. Most importantly, your most efficient market entry should be partnered with the strengths of a recognized lender with a support system and training program for the guidance and assistance needed to achieve your success. Ralph Rosynek is senior vice president and director of marketing and communications and a seasoned HECM Direct Endorsement Underwriter. For additional information, he can be reached at rrosynek@rmsnav.com or call (281) 404-7970.
NAPMW Past Presidents at the association’s 2014 National Education Conference in Seattle—(Front row): Frances Reinhardt, Mary Ellen Heathcote, Hulene Works, Georgene Peterson Lee, Lucy Collier, Ann Galla Kluge, (second row): Maureen McKovich, Sharon Decker, Jennifer Walton, Pat Hamilton-Bell, Libby Stivers, Stevie Kellogg, Katherine Kosicki Venters, Jackie Nelson, (back row): Candace Smith, Lola Kinzie, Paula Berg, Laurie Abshier, Sue Barnett, Dawn Adams and Iva Deobald
Celebrating 50 Years of NAPMW in the Emerald City By Jill Kinsman n May 15, the National Association of Professional Mortgage Women (NAPMW) came together to honor and celebrate 50 successful years of providing highquality education to people in our industry, and the women and men who worked so hard to make it happen. Seattle put its best foot forward and provided beautiful weather for the entire week, with nary a rain drop in sight! Seattle is the place where NAPMW came to be. Our first national president, Georgene Peterson Lee, joined together in 1964 with eight other women to promote and foster educational opportunities for women in the field of mortgage lending, and we continue to focus on that as our primary goal today and as we look to the future of NAPMW. We were so honored to have Past National President Lee with us at our Opening Ceremonies, along with 23 other past national presidents. Each past national president was recognized with white roses and a golden pashmina as a remembrance of this special event, along with special PowerPoint presentations provided by National Secretary Cynthia Nutter. On the evening of May 16, there was a trade show and reception that helped NAPMW to showcase our generous sponsors, as well as other businesses from the Seattle area. There were 27 vendors and sponsors that participated and our members were able to have a great evening of networking to support them. Our National Conference Committee Chair Debbie Tofte, GML worked diligently with Nita Cook, CME, CMI, our Education Committee chair, along with her Conference Committee members to provide education for our attendees that was outstanding in every way. Keynote Speaker Mary Ann McGarry, president and CEO of Guild Mortgage Company, helped start the day by sharing inspirational insights with her presentation, “Leadership in Mortgage Lending: Past, Present and Future.” Other classes available covered topics such as technology, personal and professional develop-
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