REVERSE “Forward Thinking in Reverse”
review Volume I, Number 2
Ethics Must Deﬁne the Reverse Mortgage Industry Retain a positive consumer perception by integrating ethics into your company mission.
John LaRose Reverse Market Outlook Read about the risks and opportunities of originating in the reverse mortgage industry.
John Lunde Wall Street Prefers LIBOR HECM’s LIBOR vs. CMT: Find out which HECM is better for your borrower.
The Blueprint for Making Your Company “Brand New” Stephen Kinney PAGE
Whether you are seeking to reestablish or repurpose your existing brand, or start a new one, learn how to set your company apart from the rest.
ALSO IN THIS ISSUE
• Are You Sending the Right Markeng Message? • Building the Reverse Mortgage Sales Strategy from the Ground Up • Understanding Reverse Mortgage Loan Servicing Concepts • Looking at the Reverse World from a “Forward” Thinker
NewOpportunitiesInReverseMortgageLending ForFHAApprovedandNonFHAApprovedLenders 1st Reverse Financial Services, LLC, a subsidiaryofafederallycharteredinstitution, exclusivelyprovidesbanksandmortgagelenders withthetoolsneededtobuildsuccessfulReverse MortgageLendingplatforms. LetourexperiencedteamofReverse MortgageProfessionalshelpyoutobuildit!
1st Reverse Provides:
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CompleteTrainingProgramsfortheOrigination andProcessingofReverseMortgageLoans ProductsFromMultipleInvestors OutsourcedBackroomServicesAvailable PrivateLabeledLendingSolutions MarketingAssistanceandSupport AccesstoProprietaryTechnologyPlatforms Proprietary&JUMBOReverseMortgagePrograms
877-574-1000 www.1stReverse.com 410 Quail Ridge Drive, Westmont, Illinois 60559 For lending professionals only and not intended for consumer distribution. © 2008 - 1st Reverse Financial Services, LLC.
Experience 1st Reverse “Concierge” Level Service and Support
Cover Story The Blueprint for Making Your Company “Brand New”
by Stephen Kinney
Volume I, Number 2
11 Ethics Must Define the Reverse Mortgage Industry Formalize a code of ethics for your organizaon to set yourself apart as an industry leader.
by John LaRose
14 Building the Reverse Mortgage Sales Strategy from the Ground Up Learn to improve your sales strategy by adding to your pre-exisng arsenal of skills
by Monte Rose
24 20 Are You Sending the Right Marketing Message? Long-term care is a family issue, but it is more oen a woman’s issue. Are you targeng the right audience?
by Valerie VanBooven
22 Wall Street Prefers LIBOR HECM’s There has been a lot of buzz about the LIBOR HECM. Read the historical analysis of the LIBOR vs. CMT
by Jerry Wagner
29 Reverse Mortgage Outlook Taking a look at the growing risks and rewards of an ever changing reverse mortgage marketplace.
by John Lunde
31 Understanding Reverse Mortgage Loan Servicing Concepts the basics
Note From the Editor
Ask the Underwriter by Ralph Rosynek Industry Snapshot
8 33 34
Directory The Last Word: Looking at the Reverse World from a “Forward” Thinker by Lisa Schreiber
Are you familiar with the costs of reverse mortgage loan servicing? Here are a few things your need to know.
by David J. Cesario If you would like to contribute an arcle for a future issue, please email your arcle for review to email@example.com
REVERSE review Editor Aman Makkar Copy & Design Editor Harpreet Makkar Production Manager Jason Westbrook Sales Manager Gina Smiar Printer The Ovid Bell Press, Inc. Contributing Authors Ralph Rosynek John Lunde Monte Rose Valerie VanBooven Jerry Wagner Stephen Kinney David J. Cesario John LaRose Lisa Schreiber
Rates, speciﬁcaons, and deadline informaon available. phone : 858-217-5332 email : firstname.lastname@example.org
Subscriptions and Editorial Content
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© 2008 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. Reproducons or distribuon of any materials obtained in the publicaon without wrien permission is expressly prohibited. The views, claims and opinions expressed in arcle and adversement herein are not necessarily those of The Reverse Review, its employees, agents or directors. This publicaon 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 informaon presented herein, The Reverse Review, LLC is not responsible for any errors, misprints, or misinformaon. Any legal informaon contained herein is not to be construed as legal advice and is provided for entertainment or educaonal purposes only. Postmaster : Please send address changes to The Reverse Review, 10801 Thornmint, Ste 250, San Diego, CA 92127
“Forward Thinking in Reverse”
Note From the Editor I would like to start by thanking our authors, adversers, advisers, and my staﬀ for helping make the premier issue of The Reverse Review a tremendous success. The feedback we received has been overwhelmingly posive, and the relaonships we have started to build are priceless. I have personally learned more in the last couple months while creang this magazine than I would have ever imagined. I must admit, we have been fortunate to collaborate with wonderful individuals who are very passionate about our industry. As some of you know, many of my experiences have come from the online world. Over the last ﬁve years in the Internet space, we have become accustomed to developments like social networks, blogs, online video sites, etc.. Many of you have heard of MySpace, Facebook, Wikipedia, YouTube, and the like. Many of us have even started our own blogs, created websites, or created personal or business proﬁles on one of the many social networking websites. These online portals all have one thing in common: user generated content (UGC). The key to UGC is that all content created is by the end user. Now, think about the impact user generated content has had on our society. Without people like you and I geng online and creang this content, many of these companies would not exist. The big successes of companies like YouTube and MySpace are simply due to the fact that normal people like us get online and create proﬁles or upload videos. The web has given us the ability to express ourselves in any way we would like. User generated content has become so powerful and mainstream that this year quesons for the presidenal debates were brought in from users on YouTube. In another example, earlier this year, Apple lowered the price of it’s iPhone shortly aer it’s launch. Many buyers who had paid a higher price were furious. Collecvely, the online voice was so powerful that “protests” on chat forums and blogs lead Apple CEO Steve Jobs to refund $100 to thousands of his customers. (WOW! I know I’ve bought a computer before and within weeks aer my purchase it was a few hundred dollars cheaper. I need to start protesng online!) Point being, the future of our society is not about a few people running the show, but about everyone geng involved, expressing their opinions, and making their voices heard. I believe the inial success of our magazine was truly the success of our authors and everyone else involved. The Reverse Review is a magazine and website in which we want everyone’s parcipaon, comments, and feedback. Anyone who chooses to can be an author and have their opinions heard. Therefore, every month we invite new authors to contribute, and if we haven’t invited you, we ask you to invite yourself by sending us an email at firstname.lastname@example.org. Thank you, and we look forward to hearing from you soon!
Aman Makkar Editor May 2008
Ask the Underwriter by Ralph Rosynek
Recently one of my loan ﬁles was suspended by the Underwriter for addional comparables. When I checked the appraisal I was confused as all comparables indicated by the appraiser appeared to be within HUD guidelines making the loan insurable – so why is the underwriter suspending the ﬁle?
The Secondary Market connues to become more conservave in reviewing and accepng collateral. Unfortunately, many mortgage professionals and appraisers have not been keeping current with the various changes in market values. Remember, the investor manuals, handbooks and suggested review procedures are just as presented – guidelines for collateral analysis and not hard and fast rules in many cases. Reverse Mortgage Loans carry a dual collateral performance requirement. The loan must be “insurable” by FHA/HUD guidelines and it must also be “saleable” in the Secondary Market. In the case of your queson, there would appear to be a disjoint between current secondary market standards and insurability. More than likely, the Underwriter is requesng addional comparable informaon because the 3 current comparables may meet HUD guidelines, but one or more may be unacceptable to the Secondary perhaps because of its age, locaon or the number of days on the market prior to sale. Addionally, if the property is located in a declining market, the appraiser may not have made the appropriate/ necessary adjustments or commented suﬃciently to support the value indicated. In general, be aware that the review of comparables has become much more conservave than in the past – a quick review list for comparables prior to submission for underwring should indicate the comparables as compared to the subject property are:
more current than not – the comparable sale date ages should be less than 90 days if at all possible. Be aware of the number of days on the market for a property – that is a big indicator as to the stability, supply and demand for properes in the neighborhood. more “closer” than not – the comparables should be less than ½ mile if at all possible and represent similar types of neighborhoods – the further the comparable is from the subject, the greater the likelihood that there are other factors which could eﬀect its appropriateness as a value support for the subject property. more similar than not –the lot and physical structure type/age/design of the comparable should be as similar as possible to our subject – look at the pictures of all comparable as compared to the subject. more “toward the middle” than not – the ﬁnal value suggested by the appraiser – is it more in the “middle” than at the upper end of reconciled values. Generally high end values should be avoided in markets where declining values, over supply, or unstable condions are noted by the appraiser. Also, look at the date of your appraisal as opposed to the date of your submission to underwring and the esmated closing date. For example, a 45 day old appraisal, while “current” could contain comparables that as of the date of the report were already 120 days old, which now are 165 days old and will possibly be 6 months or more old by the me the analyst in the Secondary Market reviews the ﬁle for purchase and pooling. Think of the changes that have occurred in many housing markets in the past six months and ask yourself, what is the likelihood that properes similar to the subject would connue to hold their values? Lastly, impress upon your appraiser to provide supporve comments and jusﬁcaons for choices and values beyond the “standard” language. While it is the Underwriter who determines the ﬁnal value of the subject property, it takes a team eﬀort. There is plenty of “room” for the appraiser to provide addional narrave support in the report and in
“Forward Thinking in Reverse”
most cases, that addional informaon would be of beneﬁt to the underwriter and the borrower(s).
HUD Foundation Specialists
Is it permissible to take a HECM applicaon prior to counseling?
The originaon of a HECM loan is a two-step process involving the actual compleng of the forms as well as compleon of required counseling. There is no prohibion to taking an applicaon prior to counseling, however, no services resulng in costs to be paid for by the Borrower(s) can occur prior to counseling and the Borrower(s) properly execung the counseling cerﬁcate.
M Manufactured actured Hou Housing sing Troubleshooters T rouble FFoundation nnspections, Upgrades & Repairs
My queson would be more common sense in approach – knowing the added value and protecons to the Borrower(s) which counseling provides, is it in the Senior’s best interest or the Originator’s best interest to engage the applicaon process prior to counseling?
EEngineer Certiﬁcatio C ons
Please take a moment and provide us your feedback which we will feature in next month’s column. A note about our subject maer expert: Mr. Rosynek has been involved in mortgage lending for over 30 years with the last 5 + years exclusively providing reverse mortgage lending soluons. To contact Mr. Rosynek or to learn more about 1st Reverse Financial Services, please visit www.1streverse.com or call 877-574-1000.
Have a question for the underwriter? Send your questions to email@example.com
Private Label Reverse Mortgage Sub-Servicing
Private Label Loan Origination System
Your “Go To” Team for Reverse Mortgage Solutions Marc Helm • 281-404-7824 • firstname.lastname@example.org Ken Austin • 281-404-7825 • email@example.com Reverse Mortgage Solutions, Inc. 2727 Spring Creek Drive, Spring, TX 77373 www.RMSnav.com
Reverse Mortgage Industry Snapshot As Of March 2008 Stascs Provided by Reverse Market Insight
Top 10 Rankings by Region Rank Chg Region 1 1 Southeast/Caribbean 2 -1 Pacific/Hawaii 3 - Mid-Atlantic 4 - Midwest 5 2 Southwest 6 -1 New York/New Jersey 7 -1 New England 8 - Northwest/Alaska 9 - Rocky Mountain 10 - Great Plains Industry Totals
Active Lenders Endorsements 2008YTD YTDChg% 2007TOT 2008 Chg% 7,404 474 20.94% 24,014 132.35% 5,994 454 -13.42% 25,612 50.83% 3,692 213 13.67% 11,956 88.5% 3,234 279 3.49% 11,434 48.4% 2,653 178 27.43% 8,073 79.8% 2,229 171 -4.05% 8,322 85.87% 1,769 191 -16.4% 6,963 59.17% 1,678 12.69% 5,790 170 84.78% 1,052 20.37% 3,296 105 50.0% 9.09% 2,827 91.84% 828 94 5.07% 108,287 1,666 75.37% 30,533
Region Share 2008YTD Chg% 24.249% 15.11% 19.631% -17.59% 12.092% 8.19% 10.592% -1.5% 8.689% 21.28% 7.30% -8.67% 5.794% -20.43% 5.496% 7.26% 3.445% 14.56% 2.712% 3.83%
10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates. Also includes acve lenders and growth
Lender Distribuon by YTD Growth Rate Growth Rate -100% -99% to -1% 0 to 100% 101% to 200% 201% to 300% 301% to 400% over 400% New Lenders
Lenders 210 361 223 71 26 13 46 926
YTD MIC Last YTD 1,250 13,081 21,971 5,851 4,278 2,830 1,194 549 161 192 42 2,876 165 5,154
Lender distribuon graph and table, showing number of lenders growing at various growth rates YTD vs. prior YTD, including volume aributable to each group of lenders. Client Noces 1)
Help improve data quality in the Reverse Mortgage industry. If you believe your company’s numbers on this report are inaccurate, please email us (firstname.lastname@example.org) and we will review your feedback promptly. Please include your name, company and contact informaon along with a thorough descripon of the suspected inaccuracy. Thanks! If you received this report as a trial or sample and would like to purchase this report or future reports for your company, please visit: www.rminsight.net/MICreports. php If you’ve been looking for a source for Reverse Mortgage intelligence beyond MIC endorsement numbers, we’ve got just what you need. Find out more at www. rminsight.net/rmarket.php
“Forward Thinking in Reverse”
24 Month Penetraon and Unit Volume 12,000
2 year trend graph of monthly HECM unit volume and industry penetraon against 62+ homeowner households naonally. Appendix 1) All stascs based on retail originaons from HUD’s Monthly HECM MIC reports 2) Loans are in unit volume, based on HUD reported mortgage insurance cerﬁcate issuance 3) Lenders are aggregated using HUD’s lender idenﬁcaon numbers and unique lender names, along with feedback from reporng lenders HUD Regions and Corresponding States/Territories Region 1 - New England Conneccut Maine Massachuses New Hampshire Rhode Island Vermont
Region 3 - Mid-Atlanc Delaware District of Columbia Maryland Pennsylvania Virginia West Virginia
Region 5 - Midwest Illinois Indiana Michigan Minnesota Ohio Wisconsin
Region 7 - Great Plains Iowa Kansas Missouri Nebraska
Region 8 - Rocky Mountain Colorado Region 2 - New York/New Jersey Region 4 - Southeast/Caribbean Region 6 - Southwest Montana Arkansas North Dakota New York Alabama South Dakota New Jersey Florida Louisiana Georgia New Mexico Utah Oklahoma Wyoming Kentucky Texas Mississippi North Carolina Puerto Rico South Carolina Tennessee U.S. Virgin Islands May 2008
Region 9 - Paciﬁc/Hawaii Arizona California Federated States of Micronesia Hawaii Nevada Region 10 - Northwest/Alaska Alaska Idaho Oregon Washington
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Getting to the Kitchen Table Unite Insight and Action for Maximum Marketing Impact
At the Kitchen Table
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“Forward Thinking in Reverse”
Ethics Must Define the Reverse Mortgage Industry by John LaRose
When headlines out of Capitol Hill in 2007 touted passage of an ethics overhaul bill, I have to admit I was unimpressed. Before it even came up for a vote, Congress was hailing the work as “a landmark ruling … historic, momentous.” Ulmately, the bill passed the House, 435 to 11; the Senate, 83 to 14. Barely had the President’s signature been aﬃxed to the legislaon than there came reports of members of Congress who had found ways to skirt the bill’s intent regarding travel expenses. Well in advance of the iniave, Jeﬀ Rundles, former editor for ColoradoBiz, said, “Legislang ethics is like capturing air in your ﬁst.” I couldn’t agree more. Yet, Rundles’ take on codes of ethics runs somewhat counter to mine: he says, “the ethical don’t need them and the unethical won’t heed them.” On that, I disagree. A code of ethics is a window into the soul of a company. It says: we value partnerships, but not at the cost of our values. It says: our integrity is not for sale. So what does Capitol Hill’s ethics bill have to do with us? Plenty, if we don’t want to risk having our industry’s ethics legislated. What has happened in the sub-prime lending sector is all the warning we need. No one took seriously enough the ﬂashing “TILT” light that all but blinded us, unl it short-circuited. The cost? More than $300 billion to banks and other lenders … 1.8 million distressed or displaced homeowners … 20 percent of the mortgage industry workforce without jobs … and a permanent stain to the industry. Could something similar happen to the reverse mortgage sector? It not only could happen, but it will happen if we don’t do what it takes to protect and preserve our industry now. Each of us needs to ask ourselves—as if children were listening and our answers were broadcast on the evening May 2008
news: Am I taking a stand against unscrupulous business pracces? Am I willing to sacriﬁce proﬁts for principle? Am I turning out the predatory and welcoming the principled? If not, consider our landscape from this view: • Reverse mortgages soared from 7,800 in 2001 to 107,500 in 2007. • The 308,000 Americans who have taken out reverse mortgages since 1990 represent a mere 1 percent of the senior home market. • Every day for the next 18-20 years, more than 8,000 of the esmated 76 million Baby Boomers will turn 62 and become eligible for a reverse mortgage. • Older adults now hold $4.3 trillion in home equity; by 2030, when the youngest Baby Boomers rere, it’s esmated the total in home equity held by Americans 62 and older will top $37 trillion. But look carefully for what else is on the horizon: • 172 U.S. lending operaons (and counng) have imploded in the sub-prime bust—ﬁling bankruptcy, ceasing or liming operaons, or being acquired in a ﬁre sale. • 100,000-plus mortgage workers are jobless, according to the U.S. Bureau of Labor Stascs. It follows that at least some out-of-work sub-prime mortgage brokers—some of the same people who preyed on at-risk borrowers—are now seeking a home and a paycheck in the reverse mortgage industry. It also follows that how and with whom we do business will determine how long we do business. An FBI study found that 80 percent of all reported mortgage fraud losses come at the hands of “industry insiders”—people with the knowledge and wherewithal to fool the experts themselves. Not you? Not in your house? How can you be sure? Industry insiders turned the subprime home mortgage industry on its head. It can happen anywhere: In 1999 I witnessed the ﬁh-largest bank failure in FDIC history, brought about by fraudulent mortgage pracces of the bank’s chairman, CEO and CFO.
Simply agreeing in theory that ethics maer isn’t enough. It maers what ethics look like in pracce. Experts cite common prevenve measures as among the best weapons against nefarious praconers and ill-goen gains: staying abreast of fraudulent pracces, educang employees, implemenng technological safeguards, and keeping the door closed to “un” professionals. No less important, say those same experts, is having a company code of ethics. Therein lies the opportunity for you to stand out as an industry leader—not because a trade associaon issues a call for ethical standards … not because a commiee is charged with naming your ethics for you … not because you’re compelled by compeve pressures to accede to professional upgrades … and not because it’s the “in” thing to do. Such movaons are no diﬀerent than saying you’re commied to losing weight because the neighbors think it’s a good idea. How can you set yourself apart as an industry leader? By making ethics as visible throughout and beyond your instuon as is your company logo. By being ﬁrst in line to formalize your code of ethics and mandate it as inviolate corporate policy. By exacng high standards of insiders and outsiders alike. And by sounding the clarion at the ﬁrst threat to the values your code represents. Why? Because the more, the sooner, and the louder we make clear what the “right thing” is, what we will tolerate and what we will not—as an industry, as industry leaders, as professionals, and as individuals—the beer and longer we can serve one another, our investors, and our borrowers.
Perhaps the landscape has changed enough since then, as to elicit some noise this me around. I encourage you to make a lot of noise throughout your companies and the industry on behalf of ethics, and to make certain integrity has a voice—the voice of a leader. About John LaRose: John LaRose has worked relessly for more than 20 years to promote the obligaon and need for ethics in the mortgage industry. Recognized throughout the reverse mortgage industry as a niche-markeng specialist, he is also frequently called upon for his advice and counsel. To learn more about how Celink formalized its Code of Ethics, visit www.celink.com and click on “Code of Ethics,” then “Read the history of our code of ethics,” A (true) tale of two cies.
“Individually and collecvely, we must make integrity as much an aracon for like-minded clients and investors, as it is a repellent to those who do not share similar values.”
Formalizing a code of ethics and publicly comming to the values it represents is a crical ﬁrst step. Because saying we’re ethical isn’t enough; we must be willing to put our ethics front and center so everyone knows who we are and how we do business. Each of us must live our code of ethics day-in and day-out. And we must leave no doubt about how much we value … values. You neither need permission nor an act of Congress … not a commiee or an associate’s (or associaon’s) approval. You only need an ongoing commitment from within to always do the right thing at the right me for the right reason. Individually and collecvely, we must make integrity as much an aracon for like-minded clients and investors, as it is a repellent to those who do not share similar values. Some years ago, I spoke on the topic of ethics at an industry conference of sub-prime lenders. When I concluded, I was met with silence.
Commentary by First American eAppraiseIT
MORTGAGES A GROWTH OPPORTUNITY WORTH INVESTIGATING
Over the last 20 years, 345,000 reverse mortgages have been originated. Last year, originations hit a new high: $20 billion. As the US population ages, the market has responded with new and innovative products and services geared towards keeping seniors in their homes for longer periods of time. National lenders in need of market diversification have migrated to reverse mortgages in an attempt to make up for lost business in other markets. Recently Michael Fosser, senior vice president of First American eAppraiseIT, offered his perspective on this market and the opportunities and challenges that it presents to lenders.
Why are so many lenders including reverse mortgages in their product mix? Today many market segments continue to be depressed and markets like sub prime and Alt-A are almost nonexistent. Reverse mortgages tend to be more “need driven” and less tied to market conditions. In the US today, more than 38 million eligible reverse mortgage customers own their homes outright. That’s $4 trillion in untapped equity. This offers a great opportunity for lenders to grow their portfolio of business in a market that is less sensitive to fluctuations in the real estate market.
Are some appraisers more qualified than others to service this market? Over 90% of today’s reverse mortgage originations are insured by FHA. Not every appraiser or appraisal management company is qualified to complete these assignments. At eAppraiseIT we have a nationwide network of more than 8,000 appraisers who are FHA certified – one of the largest panels of FHA appraisers available in the industry today. To ensure a successful reverse mortgage offering, lenders need to work with an appraisal management company that can provide national coverage and still maintain reasonable turn times. In our case, that is five to seven days.
What challenges does a lender face servicing this market? AARP recently conducted a survey of reverse mortgage customers and one of its findings was that their properties frequently need repairs. This of course can complicate the underwriting process and salability of a loan. To reduce lender concern, eAppraiseIT has created a new product specifically geared for the reverse mortgage market called “Value View”. It helps lenders assess the condition and value of a property while the loan is in the lender’s portfolio. This low cost inspection report includes a current photo of the subject property, an automated valuation using two comprehensive AVM’s, and an inspection report that answers questions regarding a property’s condition, marketability, and neighborhood. Value View is a great peace of mind option for any lender interested in originating reverse mortgage loans. Contact Michael Fosser 800.281.6200 www.firstam.com
Building the Reverse Mortgage Sales Strategy from the Ground Up by Monte Rose
What are the crical requirements of a successful RM sales strategy? The act of successfully “selling” reverse mortgages is actually a minute segment of a comprehensive, carefully orchestrated process. Taking the applicaon (or more to the point, funding a loan) represents the proverbial “p of the iceberg.” Beneath this event lies a series of interconnected events, the results of which essenally determine the success (i.e., the eﬀecveness and eﬃciency) of the sales eﬀort. A comprehensive sales strategy depends on the successful integraon of two dimensions: insight and acon. A producer may or may not consciously arculate characteriscs of the respecve components (much less the dynamic relaonships) of these two dimensions. Nevertheless, one’s sales “acvies” are based on key assumpons on how the market operates, and how one “executes” based on this insight. How does the idea of “integrang insight and acon” apply in managing and growing the sales team? A comprehensive sales strategy must be able to provide clear and praccal answers to the following groups of quesons. Success hinges both on the quality of insight and the applicaon of these ideas in real me:
maker, and how do I connect and inﬂuence them? 3. How do I diﬀerenate and elevate myself amidst the cluer and noise of the current compeve landscape? How do I create a personal brand, establish a strong presence, and create customer (and/or advisor) engagement that propels my business with a strong referral engine component. What skill sets (and learnings) are necessary to establish this? 4. What systems, tools, and learning strategies do I need to install in my sales pracce that will: (a) integrate the soluons to the above quesons, (2) will guarantee my successful adaptaon to marketplace and environmental changes (e.g., shiing demographics and regulatory condions aﬀecng product and distribuon strategies), and (3) leverage my me and eﬀort? How do I create sustainable momentum and stamina? In simple terms, what mind set and strategy do I use to “Get to the Kitchen Table,” how do I successfully present and close at the Kitchen Table, and what do I need to do aerwards to engage the client in order to create a strong referral base? The answers to these quesons necessitate a clear understanding of four basic areas (strengths, segmentaon, skills, strategy) that aﬀect sales producvity. This is shown in the following illustraon:
1. What do I do best? What are my strengths, i.e., beyond the skills and knowledge (competencies which are teachable), what are my talents (non-teachable), and what are my areas of “non-strengths” that have to be augmented or managed that create obstacles and resistance points along my sales cycle? How do I leverage my unique talent blueprint in an opmal way that is proﬁtable, compeve, and sustainable? Is my “porolio” of sales acvies opmally calibrated to reﬂect my “signature strengths?” 2. What is my niche? What are the segments (in the customer and advisor markets) appropriate to my unique customer value proposion? How do I locate the decision
Some producers aain relave success by focusing on the acon dimension alone. Through the process of trial
“Forward Thinking in Reverse”
and error, they manage to create a workable “strategy” based on a few key tools and “taccs” used in their previous sales jobs, or a judicious use of street sales savvy combined with markeng common sense. Some producers are gied with the stamina to “put in the miles” and through sheer discipline and hard work are able to create a viable business. Some originators have discovered a logical niche by default, either through their previous careers (and accompanying social network) or by eﬃcient harvesng of high quality leads supplied by their organizaon. Sales skills development and applicaon, implemented in “the same old way,” will yield “same old” results. In order to improve one’s outcome, one has to personally improve one’s insight (about one’s self and the market) and skilled acon, preferably both, in a dynamic way. Business will improve only if we personally improve our game. We can improve the way we think. We can improve the way we act. Or we can choose to do both. If these two are carefully and systemacally coordinated, it stands to reason that our chances of success will improve exponenally. To get results we have not goen before, we need to: Change the way we think about acon, and change the way we act about thinking. How important is insight in achieving success in the ﬁeld? Isn’t it enough to have the right eﬀort and energy day in, day out, to get in front of our prospects? Insight should inﬂuence the kind of skills one should focus on, and how they are to be applied. Conversely, the eﬀects of sales acons and implementaon strategies will necessarily aﬀect our understanding of the market and how to connect with the customer more eﬀecvely (assuming of course, that we have ways of monitoring and tracking our eﬀorts). Sales success depends on correct focus. Correct focus depends in turn on successfully aligning insight with the axis of skillful acon and strategy implementaon. Finally, this “integraon” has to be sustained by a system (i.e., an infrastructure) that maximizes eﬃciency (such as a CRM tool, me management methods, and performance dashboards that give useful feedback and informaon about the eﬃcacy of sales methods used). It is not enough to say “sales are down,” but instead ask a series of “whys,” (the famous Five Why Method pracced by Japanese eﬃciency experts) with the end view of hing the fundamental cause of less-thandesired performance.
What is the importance of a “system” that has a built-in feedback loop? The objecve of a “system” is the ability to see causeand-eﬀect relaonships between acons, insight, and results. It allows us to eﬃciently replicate (and reinforce) the behaviors that yield the results we want. Sales is one big “experiment.” One has to idenfy and measure the behaviors that contribute to the producer’s boom line, and how they can be sustained, changed, or ampliﬁed. If the manager knows how to coach at this level, movaon, stamina, and producvity improves. The biggest leverage is the front-line manager’s coaching prowess. It’s one of the most important variables in the success equaon.
“Sales success depends on correct focus. Correct focus depends in turn on successfully aligning insight with the axis of skillful acon and strategy implementaon.” The praccal knowledge of the vercal dimension, i.e., the “strengths lens” interacng with the “market lens” is something that is virtually unknown in our industry. At our consulng organizaon we have dissected and applied cung edge research in these two disparate areas. The end view is to be able to shed light on how to link sales talent with the appropriate market segmentaon knowledge. The idea of niche strategy is not new. What is new is that we are at a stage when we can actually apply science to the queson of “Who will succeed and where?” Most importantly, we can train the manager to consistently coach the “how.” This is where I think the sales profession needs to direct its creave energies, if it expects to adapt to the changing compeve environment. The axis of insight primarily dictates the quality of eﬀecveness, or “doing the right things.” The axis of acon primarily relates to level of eﬃciency, or “doing things right.” The more compeve the market becomes, the more one needs to personally have a method that systemacally manages these two polaries in a synergisc fashion. Maslow once said, “to a hammer, everything looks like a nail.” Some companies react to tougher condions by hammering harder, hammering more, or both. Others adapt by buying more hammers. Unfortunately, the game has changed. These taccs will no longer work. Merging insight and acon (i.e., “aligning the crosshairs”) allows eﬀecve and eﬃcient eﬀort in the least amount of me. To excel in this game, you must unite theory and pracce.
What is strengths-based learning, and how does that help performance? The foundaon of sales strategy is self-awareness and selfknowledge. Research from the behavioral sciences and the neurobiology of performance indicate that peak performance is ed to the relaonship of how an individual’s unique talent conﬁguraon is applied to everyday tasks. The closer (and more frequently) one applies one’s “signature strengths” to the acvies of the sales cycle, the higher producvity becomes. The corollary is that the greatest areas of li in sales producvity is not to be found in constantly “improving” one’s weak areas, but in leveraging one’s unique talents. The 80/20 rule of thumb applies: the greatest li comes from capitalizing on one’s strengths 80% of the me, while spending 20% of one’s me and energy creang workarounds and compensaon strategies on “weaknesses.” Unfortunately, many in the ﬁeld sll believe that “ﬁxing weaknesses” is the most producve use of one’s me, despite overwhelming research evidence to the contrary. Two pragmac soluons are required for a strong foundaon in this area: (a) proper assessment, and (b) skillful, strengthsbased producvity coaching. The ﬁeld of talent assessment has a long history, though in the last 10 years, researchers in the ﬁeld of Posive Psychology have created instruments with robust psychometrics and praccal applicaon (i.e., idenfying work-related “themes” strongly correlated with high successful performance and achievement). Strengths-based coaching ulizes a salesperson’s “talent map” as the starng point for producvity enhancement. The key objecve is one of praccal skill building based on what could be termed “meta-learning on steroids” – i.e., learning about “learning to excel,” based on a deep ﬂuency of the strengths language and systemac eﬀorts to focus one’s talents on those acvies that yield the greatest return. (One of the sales manager’s most important tasks as a “strength-based” partner is to concurrently facilitate strategic partnerships/structures to bolster the sales staﬀ ’s areas of challenge - i.e., the “boom drawer strengths”). In my experience, skillful and in-depth strength-based training and coaching is a key foundaon to a successful sales strategy for two reasons: (a) It creates a highly engaged sales staﬀ, which translates not only to personal sales producvity, but also yields a high level of customer engagement in the long run. Human Sigma, which is a concept/tool rapidly being adapted by cung edge performance-oriented organizaons, in fact measures the potency of the salesperson-engagement-to-customerengagement linkage as a key driver of business proﬁtability. The latest ﬁndings from neuroscience research is telling us that employee engagement is achieved primarily through “managing
“Forward Thinking in Reverse”
from strengths,” i.e., structuring a logiscal, psychological, and social environment where both manager and sales staﬀ converge on strategies that incorporate the concepts of strengths ﬂuency and movaon. Successful sales teams ﬂourishing within posive organizaonal cultures have always accomplished this. However it is only in the last 5-10 years that methodologies for tagging and replicang these successful approaches have been published and taught as part of the coaching lexicon. (b) Behavioral change eﬀorts are more eﬀecve and sustainable when they take into account the “wired-in” talent proﬁle of the salesperson. Strengths-based coaching, mentoring and training energizes the individual, builds performance stamina in a non-coercive way, enhances eﬃciency, decreases turnover rates, and increases staﬀ retenon. In today’s highly compeve talent marketplace, this is a key strategic advantage. Not only does this result in high performance, it also creates an employment brand that aracts highly talented people into the organizaon. Thus one creates a fully self-propelled posive dynamic that starts from eﬀecve selecon, and comes full circle with connued sales excellence and customer engagement as eﬀects. Eﬀecve strengths management is the underpinning of eﬀecve sales strategy. It is the key to focusing movaon. It is the framework for developing the agility, sensivity, and stamina required for succeeding in the mature market. How important is it to understand market segmentaon in the mature market? There are two major subdivisions in this area: (a) direct to consumer (“D2C”), and the business-to-business (“B2B”, or referral) market. The old “62 and a pulse” understanding of the mature market is not only obsolete, it’s also completely useless as far as formulang markeng strategy. Unfortunately, most players are sll quite in the dark about the psychographics of aging. D2C. Tradional market segmentaon typically covers geographic, demographic (e.g., income, ethnicity, etc.), psychographic (e.g., atudinal, values, and lifestyles) dimensions of understanding consumer preferences and buying behaviors. These kinds of segmentaon applicaons are very prevalent in tangible consumer products, and certain types of ﬁnancial products such as credit cards. In our industry, however, market intelligence has not yet reached a level where there has been a systemac invesgaon of buying preferences within the senior populaon. Most large organizaons segment based on geo-demographic variables such as age and income, and fail systemacally (quantavely/qualitavely) to assess the heterogeneous May 2008
distribuon of seniors as a funcon of: (a) where they are in the aging process, and (b) the various biophysical and psychosocial determinants of needs and wants. Suﬃce it to say that there are certain consumer segments we have discovered that: (1) respond to speciﬁc promoonal and posioning strategies, (2) have disnct media and channel preferences, and (3) have speciﬁc recepveness/resistance to the reverse mortgage oﬀering. The eﬀecveness of one’s path to the kitchen table, how one manages the conversaon at the kitchen table, all depends on one’s understanding of the various “mind-set” classiﬁcaons of the respecve mature market segments. There are several gerontologically based market segmentaon approaches we ulize in training sales staﬀ in order to help them understand the senior client psyche (the emoonal and cognive components of the “buying decision”). The advantage of gerontological segmentaon is that it incorporates the biological, social, and psychological dimensions of aging. It creates useful “mind maps” of how we can serve the senior populaon based on what they need and want. Perhaps most importantly, it yields insight on how they are likely to process informaon
in terms of form and content. It takes into account the natural processes/dimensions of aging, alongside crical life events that necessitate adjustments and dislocaons in lifestyles and ﬁnancial posion. Knowledge of mature market segmentaon equips the salesperson with beer insight so that he/she can ancipate where and how to connect with the client. Understanding the client and quality of customer service goes hand in hand.
What is the link between strengths-based performance coaching and market segmentaon knowledge? Eﬀecve strengths assessment and proﬁling gives a good indicaon of the segments one can be reasonably successful at. In addion, the talent proﬁle will give good insight on what parcular skills are easy to learn and apply. The talent proﬁle will give a clue as to the appropriate markets (D2C vs. B2B) that are a natural ﬁt. There are certain ways to reach speciﬁc segments (e.g., channel/media vs. seminars, vs. networking for example) that are inherently easy for some, and painstakingly diﬃcult for others.
In training our clients, we teach a gerontological segmentaon lens to focus on customer variaon. Age is not a ﬁnal diﬀerenator of need and/or want. More oen it is where one falls on the declining biological/psychosocial The key is to coach individuals to their strengths in “energy” scale that determines recepvity to ﬁnancial terms of Geng to the Kitchen Table skills. Certain strength products and soluons. Eﬀecve promoon and educaon proﬁles naturally predispose individuals to also requires the formulaon of speciﬁc “Eﬀ ec ve strengths parcular markeng methods, which means buyer personas (i.e., based on these assessment and proﬁling that they will consistently be resistant previously idenﬁed market segments) to and/or blocked in some paths. Certain cases understand the direct-to-consumer market gives a good indicaon of -- movaonal issues, call reluctance, and dynamics. the segments one can be demoralizaon (all contributory to poor B2B. Many successful originators successfully reasonably successful at.” performance) -- are caused by managers build their business through the ﬁnancial/ demanding producers to consistently use legal professional advisor market. However, there are also their “boom drawer strengths” to grow the business. other advisor inﬂuences besides these two. They include For example, forcing individuals with very low “Woo” community inﬂuencers, family members, and social work/ theme to constantly “ﬁsh” in cocktail networking events can health providers. An enre strategy can be built on eﬀecve be a painful exercise. If this person had a high analycal and networking and relaonship building with these populaons. deliberave talent, he/she could have been more eﬀecvely Just as in the D2C segmentaons, B2B approaches need coached to explore the B2B terrain, because the expression to systemacally idenfy the “movaonal maps” of the of analycal and deliberave sensibility is more valued in various segments within this sector. this market. In general, people who have more themes in However, not everyone has the temperament or the cognive and impacng categories are generally more capabilies to fully ulize this market portal. They require natural B2B players, compared to those with high relaonal a diﬀerent talent set, a diﬀerent level of competencies and talents (e.g., Empathy, Connectedness), which tend to be product knowledge, and, in many cases, a diﬀerent level of more eﬀecve in the D2C arena. business approach to be successful. B2B markeng needs Some producers are more ﬂexible, and can dial down to be tailored based on the unique talents and competency or dial up their energy levels quite easily because of certain proﬁles of the sales staﬀ, in much the same way that D2C clusters of strengths that allow such mobility. Others need campaigns are orchestrated. to sck to a certain kind of customer to be eﬀecve. For these kinds of producers, oscillang between diﬀerent sales Understanding the key segments of this market in terms personas can be very draining. of: (a) their primary senior targets, (b) their own posioning and promoonal strategies, and (c) their understanding of About Monte Rose: Monte Rose has helped hundreds of equity conversion as soluons to their mature market clients, seniors obtain a reverse mortgage during the past 17 years. whether they are in the non-proﬁt or ﬁnancial advisory He is an accomplished speaker and widely quoted industry role, and their understanding of the various gerontological expert, appearing in ﬁnancial publicaons and naonally market segments themselves, will aﬀect how they are to be syndicated media. He was head of naonal retail sales for approached. Financial Freedom Senior Funding Corporaon. Monte is a Cerﬁed Senior Advisor and a Cerﬁed Strengths Coach with Gallup University. For more informaon, call 800-516-0545 or email firstname.lastname@example.org.
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Are You Sending the Right Marketing Message? As Elder Care Needs Increase, Families Search for Soluons by Valerie VanBooven
As our populaon ages, elder care needs increase, and therefore cash ﬂow needs increase. The three simply go hand-in-hand-in-hand. According to a recent joint Cornell and Purdue University study, supported by the Naonal Instute on Aging; aging mothers are nearly four mes more likely to expect a daughter to assume the role of their caregiver rather than a son if they become ill or disabled. These mothers also are much more likely to choose a child to whom they feel emoonally close and who has values similar to their own, report Karl Pillemer, Professor of Human Development at Cornell, and Purdue sociologist Jill Suitor, in the journal, “The Gerontologist”. (The Gerontologist 46:439-448 (2006) © 2006 The Gerontological Society of America Making Choices: A Within-Family Study of Caregiver Selecon Karl Pillemer, PhD, and J. Jill Suitor, PhD ) The Markeng Message The point with regard to Reverse Mortgages (and the markeng of your Reverse Mortgage services) is that in order to send the right message, you have to understand your audience. We, as an industry, are not just speaking to the 62+ homeowner. We are markeng to- and educangthousands and thousands of adult children. Although it’s much more diﬃcult (ok impossible) to purchase as list of “adult children of aging parents”, our atudes, our sales pitch, and our overall message needs to convey credibility and trust.
Although we see increases in male caregivers all the me, the fact remains, that when it comes to long-term care for our family members and our spouses, today women carry the weight. Daughters, daughters-in-law, wives, sisters and nieces oen accept the role of caregiver for aging adults in the family. Across the U.S. there are women commonly referred to as “the sandwich generaon” who are playing dual roles in their families. They are oen mothers themselves, while caring for their own aging parents at the same me. The level of stress and frustraon can be overwhelming. Careers are being put on hold, and promoons passed up, in order to accommodate the busy schedules of their children, and their parents. Even so, there is sll not enough me for these women to meet everyone’s needs. A ﬁnancial burden results as well. Women in America also tend to marry men who are older than they are. Therefore, they oen end up caring for a chronically ill spouse in later years. When this happens, it is somemes the case that all of the rerement funding and assets are used to pay for the long-term care needs of the “ill” spouse, leaving nothing in savings to care for the “well” spouse later in life. It is esmated that one out of two women will need long-term care at some point in their lives. One out of three men will also require long-term care. So why do more women need services? A woman’s life expectancy is sll longer than the average male. So there is your audience- seniors, adult children of aging parents, and women.
Your Audience Long-term care is a family issue, but it is more oen a woman’s issue. Throughout history women have been the caregivers in our lives. As we have seen, women also live longer than men on average. From beginning to end, women oen care for family members young and old. Now as our populaon begins to age, it is even more important that we understand what lies before us.
“It is esmated that one out of two women will need long-term care at some point in their lives. One out of three men will also require long-term care...As we have seen, women also live longer than men on average.”
â€œForward Thinking in Reverseâ€?
Generang Success Do you have the right markeng message? Is your message conveyed using the right media? Do you even have a markeng plan? The most successful Reverse Mortgage originators understand full well that family involvement is a big deal, an important consideraon, and not something they try to avoid. As elder care needs increase, families are looking for soluons. You may have that soluon. If your community trusts you and believes that you are a credible professional, the business will fall into your lap with very lile eďŹ€ort. Establishing that level of credibility and trust takes me. Start a new markeng plan KNOWING who your true audience is, and move forward from there. About Valerie VanBooven: Valerie VanBooven RN BSN is the Naonal Markeng Director for Next Generaon Financial Services, a Division of 1st Mariner Bank. She is a professional speaker and the author of the books â€œAging Answersâ€? (2003) and â€œThe Senior Soluonâ€? (2007). Her websites are www. ngfs.net and www.seniorserviceselling.com . Valerie can be reached at valerie@nextgenďŹ nser.com
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Wall Street Prefers LIBOR HECM’s Will they be kind to your clients? by Jerry Wagner
Since the incepon of the Home Equity Conversion Mortgage (HECM) program in 1989, the tradional loan was based on Constant Maturity Treasury (CMT) rates as published every Monday by the FED. The Note Rate was based on the one-year CMT rate plus an investor margin. The Expected Rate is used for ﬁnding how much money is available and in calculang Service Fee Set-Asides (SFSA) and payment plans. The Expected Rate was based on the tenyear CMT rate plus the same investor margin. In October of 2007, HUD authorized HECM’s based on the London Interbank Oﬀered Rate (LIBOR). The Note Rate is based on one-month LIBOR as published every Monday in the Wall Street Journal, plus an investor margin. The Expected Rate is based on the ten-year LIBOR Swap Rate, as published every Monday by the FED, plus the same investor margin. For background, see our ﬁrst arcle in this series at The Reverse Review Website. What’s the Diﬀerence? Table 1 compares the LIBOR and CMT HECM as shown on a seller/servicers website for the week of April 22. Note that this company is playing the LTV lookup game – Expected Rates are rounded to the nearest eighth for LTV lookups subject to a 5.50% lookup ﬂoor. The LIBOR margin here is the highest that will sll allow the Expected Rate to round down to 5.50% (nice folks!).
Table 1 Short-term Index Investor Margin Inial Note Rate 10-Year Index Investor Margin Expected Rate LTV Lookup LTV Factor Max Claim Amount Principal Limit Loan Fee Upfront MIP 3rd-Party Costs Available Aer Costs SFSA Available Beneﬁts
LIBOR HECM 2.874% 1.222% 4.096% 4.340% 1.222% 5.562% 5.500% 0.715 362,790 259,395 -7,256 -7,256 -2,211 242,672 -5,603 237,070
CMT HECM 1.67% 1.75% 3.42% 3.67% 1.75% 5.42% 5.500% 0.715 362,790 259,395 -7,256 -7,256 -2,211 242,672 -5,682 236,990
What might we expect? We are in strange mes – rates are low and the spread between short-term LIBOR and CMT rates is high. Historically the one-month LIBOR has been only 0.13% higher than the one-year CMT rate. If this spread comes back in the future, the borrower will be much beer oﬀ in the LIBOR HECM. The chart below shows the history of the two Note Rate indexes.
The LIBOR HECM gives an extra $80 in available beneﬁts because its higher Expected Rate gives a lower SFSA. But its inial Note Rate is 0.676% higher. If this spread holds, this 73-year old borrower will owe an extra $26,454 in ten years – all for an extra $80 up front!
“Wall Street has temporarily backed oﬀ from invesng in reverse mortgages. Luckily for the reverse mortgage industry, Fannie Mae, the tradional investor, is sll buying in a big way.” 22
“Forward Thinking in Reverse”
But the historical average spread in the Expected Rate indexes has been 0.58% (LIBOR higher than CMT). This means that in the future, when rates go up a bit and the annoying 5.50% HUD lookup ﬂoor has no eﬀect, LIBOR HECM’s must have a margin that averages 0.58% less than the margin on CMT HECM’s in order to give similar beneﬁts. The chart below shows the history of the two Expected Rate ten-year indexes. You can see how consistent the spread is between the LIBOR Swap Rate and the ten-year CMT.
If you believe that historical yield spreads will reassert themselves in the next few years, your client will be beer oﬀ in a LIBOR HECM if their inial beneﬁts are equivalent to those from a CMT HECM. The LIBOR HECM will need a 0.50% or so lower margin to match the beneﬁts of a CMT HECM, and if the future Short Spread is less than 0.50% (history is 0.13%), the LIBOR HECM will have materially lower future loan balances.
“We are in strange mes - rates are low and the spread between short-term LIBOR and CMT rates is high.” Hopefully the “American Condion” will be a short-lived phenomenon.
What products should you oﬀer? Wall Street has temporarily backed oﬀ from invesng in reverse mortgages. Luckily for the reverse mortgage industry, Fannie Mae, the tradional investor, is sll buying in a big way. But we believe that Fannie prefers CMT HECM’s. When Wall Street rehires their trading desks, LIBOR HECM could well move to the forefront. It all depends on the spreads between the ten-year indexes and your percepon of the future spread between the two Note Rate indexes (“Short Spread”). We can prey well predict that the ten-year spread will average 0.58% -- the wild card is the spread on the two Note Rate indexes. In the chart below you can see the material eﬀect the sub-prime and rate spread melt-down has had on the Short Spread. The Long Spread has stayed fairly consistent averaging 0.58%. The Short Spread has gone haywire!
About Jerry Wagner: Jerry Wagner is President and Ashok Shinde is CTO of Ibis soware based in San Francisco. Ibis has been the Standard of the reverse mortgage industry since 1995. Wagner graduated from Harvard Business School and has a Ph.D. in Economics from Harvard. But he’s sll a fun guy and can be reached at 800-566-5077 or email@example.com. To learn about Ibis soware, see www.reversemortgagehomepage.com)
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The Blueprint for Making Your Company “Brand New” by Stephen Kinney
According to a recent survey by Reverse Market Insight, there are 1667 acve reverse mortgage lenders in the USA today. Fiy-ﬁve percent, or 926 of those lenders, are new to the business. Currently, these new lenders account for about 16% of ﬁrstquarter 2008 producon. With so many new lenders entering the business, diﬀerenang yourself and your company from others in the industry is going to become more challenging and more important.
“Forward Thinking in Reverse”
One of the best ways to do this is to establish a strong brand, one that sets you apart from the compeon and creates a percepon in the marketplace that you are diﬀerent, beer, and someone a consumer should consider doing business with. Branding is important and can have tremendous value to an individual or company. Look at Donald Trump; his branding has become a business unto itself. Lending his name to mortgage companies, board games, even neckes, creates revenues for “The Donald”. With each new venture, he further establishes the value of his brand. For reverse mortgage sellers a strong brand name and promise can create conﬁdence, familiarity and, most importantly, reduce the percepon of risk in the public’s eye. Done well, a strong brand may even allow you to command a premium price while making it diﬃcult for competors to gain a foothold in your marketplace.
“Take the me and do the research to understand your target audience’s age, gender, income, educaon level, locaon and emoonal state.” Creang a brand identy is a collaborave, meconsuming process. You want to start with a creave team, one that represents everyone in your organizaon who will be aﬀected by the branding plan you create. If you can aﬀord it, you may want to seek out some professional help as well. The branding process can be broken down into a four part process Listening, Quesoning, Creang, and Delivering. Let’s take a look at each of these.
gather the informaon you need and assign tasks to the members of the team or seek out other resources. Take the me and do the research to understand your target audience’s age, gender, income, educaon level, locaon and emoonal state. What movates them to acon? What turns them oﬀ? What gets their aenon? What are their hot buons? What do they love, hate, fear? Use a spreadsheet to set up customer proﬁles and create a plan to target them. Finally, evaluate the results and ask how your conclusions ﬁt your goals and what value your new brand can bring to helping you reach those goals.
Quesoning Creang a brand is more than just designing a logo, creang a slogan, or deciding on some colors. You want your brand to create a posive mental imprint in the public’s mind, an imprint that is reﬂected in everything you do. Like most successful markeng eﬀorts, building a brand starts with asking a lot of quesons. The ﬁrst of these quesons revolve around the 4 P’s, purpose, personality, promise and percepon of diﬀerence. Let’s look at these and lile more detail. What Is the Purpose of My Brand? What do you want your brand to do for you? What idea, emoon, thought, and result do you hope to accomplish when someone sees your name, logo or byline? Your brand purpose should be clear, concise, praccal and measurable.
Begin by assessing your premise and the desired conclusion of the branding process. Invesgate your current brand and the assets and image it brings to your organizaon. Start by listening to your employees, customers, and competors. Assemble focus groups of employees and customers. Learn from your team and your clients the percepons (brand image) that your brand has in the marketplace, the posion it has established, and the promises it has made, kept, and broken. Brainstorm and strategize with your team on how to move your brand to the market presence you want to establish.
What Personality Do I Want My Brand to Convey? You want your brand to be reﬂecve of your company’s personality, or at least the personality you want to convey. What is the emoonal response you want customers to have when they come in contact with you or your company? When you think of Donald Trump, chances are you think of money and boldness. Geico uses humor to portray a personality of a company easy to deal with. Financial Freedom and Lender Lead Soluons use James Garner and Robert Wagner and create a customer friendly personality for their companies. What personality do you want your brand to convey?
Outline the core concerns of your target audience and how to posion or reposion the brand to develop new clients. Ask how you can diﬀerenate yourself from your competors. Start from scratch or use your current brand presence as a starng point. Determine the best way to
What Is My Brand Promise? Your brand promise is the idea that you want the marketplace to take away with them when they see or hear your brand. A well executed brand promise can have a dramac impact on your business.
A brand promise should….
• maer to customers • be unique or diﬀerenate you or your company • be believable • be aainable
Create concepts for developing a brand identy and brand message. Review what you learned in the quesoning process and work collaboravely with your team to capture a brand promise and presence that it is consistent, clear, and can be promoted by the whole company.
The brand promise helps you posion yourself in the minds of your prospecve customers and helps you create a posive reputaon in the marketplace. What Is the Percepon I Want My Brand to Convey to the Public? Percepon of diﬀerence is one of the most important things a brand can do for you. This diﬀerence can be real or perceived. Early in my career I had to be dragged kicking and screaming to the understanding that “percepon is reality.” Your Percepon is oen related to how the public perceives how you deliver on your brand promise. You may want to create the percepon you are the most experienced, or the fastest. While all or none of this may be true, if your branding creates that percepon in the public’s mind it will have succeeded. Of course delivering on the brand promise (at least most of the me) is the best way to insure that you will maintain the proper percepon of diﬀerence over me.
Develop the brand message, which should include collaboraon sessions with your team and customers if possible. Plan at least two rounds of revisions to the talking points, tagline, and sales pitch. You may want to update your exisng logo and slogan to align with your new image. Choose a Brand Name While your name is certainly not everything, it is an important piece to building a lasng brand. Great brand names: • Are emoonal • Are memorable • Have personality • Tell a story and communicate Should a name be literal and descripve, or obscure and emoonal? Both can have impact. Obscure and emoonal
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“Forward Thinking in Reverse”
can lead to very disncve brands, but literal and descripve can speed up the process of communicang your message to your audience. When you have come up with a name or slogan, research it. Can you secure a domain name that is consistent with your brand name? Also, check the internet and the trademark oﬃce to see if anyone else is using it.
“Percepon of diﬀerence is one of the most important things a brand can do for you.” Try to be original. Generic names like Senior Mortgage, Reverse Mortgage Lending, or Senior Lending may just make you spend more and work harder at building a brand. They will likely be the same or to similar to other companies in the marketplace, and will make it harder to diﬀerenate your company from these competors. As names get harder to come by, many modern companies create names that are a combinaon of words (i.e. Verizon, Costco etc.) to insure they are unique. Being descripve - as opposed to being generic – can be a good thing for names. Given a limited budget, it can actually be a great way to go. Try to be original so that your name stands out, so that it means something, so you can own it, and so it will be much harder to copy. Avoid names that are hard to spell or pronounce. Ask yourself, how will the market receive the name? Will the market get it? Will it jive with your strategic posioning of the brand? Are there negave connotaons or associaons with the name? Perfect brand names are hard to come by and there’s no fool-proof method for tesng names, so don’t get too bogged down. Under pressure to come up with a descripve name for my company, one that I could get a reasonable domain name for, I gave up and decided to use my own name. It’s easy enough to pronounce, but the spelling is unusual. However, if you Google Stephen Kinney you will see that I am ﬁrst or second on the list. Come up with a few ideas and then test a lile, talk to your colleagues, customers, friends and family, listen to people you respect, trust your gut feelings, and make a choice. While the brand name is important, few brand names can stand on their own. Great brands become part of the public consciousness as a symbol of your story, diﬀerenate your company in your marketplace, and trigger a memory, emoon, or posive percepon. The brand name and how your branding campaign is executed are essenal to building brand awareness.
Create a Logo The right logo makes a great ﬁrst impression. A logo is the visual image of your company that will be used in a variety of applicaons. When you are considering a design, start with simple. Many of the most eﬀecve logos are one or two colors. For a start-up, this can save you a lot on prinng and markeng expenses. It is important to test how your logo photo copies and works in a digital environment, fax, website, leerhead, etc. Sample other venues that you may grow into, like posters, print adversing, or promoonal items. Can it work as well on a small or large scale? Whether your logo is full-color or one color, make sure you leave customers with the best possible impression through the use of high quality business cards, leerhead and envelopes. The good news is that in this age of computer graphics and low cost printers, it shouldn’t cost a fortune.
Delivering Brand markeng is communicaon that diﬀerenates you from competors and increases awareness of your brand promise. Brand markeng sets the stage for adversing, direct markeng and other communicaon by posioning your product in the minds of potenal customers. Direct markeng or product markeng then hones in on customers and gives them an opportunity to buy with conﬁdence, as they are aware of the brand promise your branding campaign has imparted to them. Integrated Markeng Communicaons (IMC) is the process that aligns communicaons to build posive and lasng relaonships with customers and others. It is a customer-centric approach to markeng and branding that stresses communicang to consumers in order to speak with one voice through mulple forms of media. In other words, it’s how you present your company or adversing and prevent it from having mulple, conﬂicng messages. A good IMC plan balances a company’s responsibility to create awareness with its need to generate results. Make a List of all Your Touch Points Every me you touch a customer or prospect, you should see your brand coming through. This should include your workplace, promoonal acvies, correspondence, and even how your phone is answered. Remember a brand is the summaon of your company’s promise; infuse your brand
in as many contact areas as you can. Be sure to include each of these touch points in your IMC plan so that your branding speaks with one voice. Create a Demand for your Brand Your product’s performance, your customer service, follow-through, and the quality of your adversing, markeng, and communicaon add up to the brand experience. Posive experiences create new and repeat business. Your branding can make the consumer’s choice easier and more comfortable. Customers will know you, seek you out, refer you to friends, and remain loyal. The power of a well executed brand can make your fortune! A poorly executed plan will yield no beneﬁts and may actually hurt business (remember “New Coke”). Monitor your Results Evaluate how your new brand is working. Convene anonymous surveys and focus groups to evaluate your percepon in the market place. Are you geng more calls? Are your markeng eﬀorts becoming more eﬀecve? Is your business increasing? Are you delivering on your brand promise at all levels of your organizaon? How has the public’s recognion and percepon of your company changed.
Conclusion Whether you are seeking to reestablish or repurpose your exisng brand, or start a new one, creang and building a brand is a collaborave, me-consuming, and ongoing process. It requires research, creavity, dedicaon and salesmanship. It requires a branding plan that permeates the culture of your company and is reﬂected at every touch point you have with your customer. The right branding can permanently change the fortunes of your company, reduce customer acquision costs, and allow you to successfully compete without consistently being the low cost provider. About Stephen Kinney: Stephen Kinney is a 26 year veteran of the mortgage industry and CEO of Stephen Kinney Associates, Inc., a company that specializes in the providing training and consulng services to company’s seeking to excel in the Reverse Mortgage Industry. Stephen can be reached on the web at www.stephenkinney.com or by calling 973-842-0081.
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NARMLO Reverse Mortgage Today Monthly Teleseminars and Webinars NARMLO Blog Discussion Forum Marketing Tools Lender/Lead/Service Resources Educational Materials for your seniors NARMLO.org is the place to find answers to all of your questions NARMLO.org offers an interactive discussion forum where you can exchange ideas and express constructive opinions with reverse mortgage Loan Officers throughout the world
“Forward Thinking in Reverse”
Reverse Market Outlook by John Lunde
In a world full of investors, you have undoubtedly heard the disclaimer, “past performance is no guarantee of future results”. Of course, you probably also noced this typically follows a large chart and table trumpeng past performance stascs. You may wonder why the seeming contradicon, but I’ll venture a guess that in looking at an uncertain and unknowable future, the past is oen our best foundaon for guiding future expectaons. In that vein, I’d like to ask a simple queson about our industry. What can past performance tell us about the future of our industry? In parcular, I’d like to focus your aenon on two important topics that will play a major role in shaping the near term success of originators and by extension, the growing group of supporng vendors. We’ve all heard about how the number of companies selling reverse mortgages has expanded rapidly in recent years. Even if you haven’t seen the ﬁgures, you’ve undoubtedly felt it ﬁrst hand in increased compeon for customers. So let me put some numbers around this for you:
Risks 1) Home Value Declines In many ways, the proprietary products which have been introduced in our industry to date have ﬁlled the ‘jumbo’ product niche above the federal lending limits. With a substanally lower LTV curve in place in most proprietary products than HECM, borrowers typically don’t see addional cash unl home values are 150-200% or more of the lending limits.
Exisng Loan Limits Percent of HECM Unit Volume 2005 2006 2007 2008 YTD
Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
The graph above tells the tale of our market, illustrang how unit volume growth has outpaced acve lender growth in some years and vice-versa in others. Last year the growth in the number of lenders was 40% higher than volume growth, the highest gap in recent years, triggering a perceived shrinking of the opportunity among lenders and leading to declines in markeng and sales conversion rates. The challenges have clearly grown for originators, so what opportunies and risks exist today?
There is evidence from the table that declining home values against mostly stable lending limits has incrementally contributed to a shi in volume toward HECM, although the much clearer factor behind this has been an illiquid secondary market. Even in the higher value market of California, the trend has been signiﬁcant and sustained as home values fall from the peaks seen in 2005/06. The larger implicaon of this shi is more striking – that HECM is taking up a larger share of the potenal transacon volume of exisng ‘jumbo’ focused proprietary products, even if the secondary market were operang at full capacity. For the foreseeable future, HECM will connue to dominate the industry unless and unl a convenonal conforming product is created to compete against HECM at the lower home value segments.
2) Ancipated Higher Loan Limits Everyone is hoping for higher loan limits on the HECM, but what would the actual impact of such a change be? The tables below show the impact on the previous table for both $417,000 and $550,000 naonal loan limits. Single Naonal $417K Loan Limit Percent of HECM Unit Volume Naonal
Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
California Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
Single Naonal $550K Loan Limit Percent of HECM Unit Volume 2005 2006 2007 2008 YTD
Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
Value <= Lending Limit
Value <= 120% Lending Limit
Value <= 150% Lending Limit
These tables make it crystal clear that increased loan limits will have a larger impact on HECM market share than any home price decline and potenally more than the current secondary market issues. While it is not clear when legislaon may pass or what the ﬁnal form of loan limits and originaon fee changes might be, originators should expect and prepare for connued HECM dominance in this landscape. Where in the past we’ve seen proprietary products make up the lion’s share of proﬁts at many companies, the combinaon of factors liming the proprietary jumbo opportunity is a major factor aﬀecng business planning around the industry. In a capped HECM originaon fee world, the industry runs a signiﬁcant risk in losing proﬁtability on a macro level without a realisc proprietary product outlet.
Opportunies Where there is risk, there is also opportunity, and two of the most immediate opportunies you’re likely to ﬁnd today revolve around the two risks highlighted above. Increased lending limits will almost certainly lead to a mini boom of reﬁnance business for those ready to take advantage. Whether you focus on retaining your previous customers or farming other lenders’ porolios, this opportunity isn’t likely to knock twice. The HECM expected rate ﬂoor, limited home price appreciaon and other factors are combining to ensure that future reﬁnance opportunies are signiﬁcantly more modest than the present wave. Second, as borrowers with home values previously above the lending limits are able to access more cash, a signiﬁcant number of transacons will have the numbers work where they previously were too lile to payoﬀ exisng obligaons and/or meet the liquidity needs of the borrower. Reviewing old leads and re-running the numbers for each using the new loan limits and current interest rates is a prime way to garner new business while keeping costs associated with lead generaon down. Lastly, product innovaon remains a large opportunity although likely not an immediate opportunity for most market parcipants. Whether through a HECM competor, bundling, or re-invigorated jumbo pricing, the connued lack of penetraon in the vast senior marketplace remains a crucial indicator of product gaps in our industry. The outsize proﬁtability of the early jumbo products points the way toward large rewards for successful innovators, although the risks and costs of failure can be daunng. In closing, as each of us confront these risks and opportunies every day, it’s crucial that we also keep in mind the overall perspecve of the industry beyond the immediate landscape. Each day our growing industry is helping more and more customers fulﬁll their ﬁnancial and lifestyle objecves. This history of performance should be intensely sasfying to all of us, no maer what our future holds. If there’s one thing that’s certain, it’s that everything changes and today’s compeve challenges will give way to tomorrow’s rewards for successful innovators. About John Lunde: John Lunde is President and founder of Reverse Market Insight, the premier source for market intelligence and analycs services in the reverse mortgage industry. RMI clients include mulple top ten reverse mortgage lenders and servicers, as well as some of the largest ﬁnancial services ﬁrms in the world. Find out more at www.rminsight.net or call 949-429-0452.
“Forward Thinking in Reverse”
Understanding Reverse Mortgage Loan Servicing Concepts by David J. Cesario
One of the longest relaonships that exists between a borrower and lender is the relaonship established through the servicing acvies of their mortgage loan. Since the reverse mortgage loan has a variety of unique features, the servicing aspects are somewhat diﬀerent with respect to how the loan is managed aer closing. But something else that makes servicing of reverse mortgage loans diﬀerent is the eﬀect servicing has on the qualiﬁcaon ability of the borrower. Therefore, it is very important to understand, and diﬀerenate servicing aspects of reverse mortgage loans compared to servicing of forward mortgage loans. Since most new reverse mortgage borrowers will have had experienced servicing of forward mortgages, it is important to be able to explain the diﬀerent funcons and expense components to your reverse mortgage borrowers. Servicing expense is not necessarily a concept discussed with most forward mortgage borrowers, but it is absolutely a concept dealt with for reverse mortgage borrowers. As with any mortgage loan, there is an expense incurred by the lender for the servicing of that mortgage loan; and a reverse mortgage is no excepon to this rule. Reverse mortgage servicing has many similar funcons as forward mortgage servicing including monthly statements mailed to borrowers, the maintenance of a customer service call center, and handling payoﬀ requests. But unlike forward mortgage servicing, reverse mortgage servicers may be making outgoing monthly disbursements (payouts) to borrowers instead of collecng incoming payments. They may also be dealing with borrower requested changes to the payout methodology selected, which can be changed as many mes as the borrower desires, aer the loan is funded. The biggest diﬀerence in the servicing of a reverse mortgage loan versus that of a forward mortgage is how the cost or expense for servicing acvies is paid for. In a forward mortgage, servicing expense is collected (or paid) from the incoming monthly payment of principal and
interest. The lender will typically pay a ﬁxed fee to the servicer for their services. This monthly revenue stream does not exist for reverse mortgage loans as no incoming monthly payment is required. The queson then arises how to collect for (or pay) the servicing expenses incurred? The soluon was to charge the borrowers a monthly servicing fee as part of the ongoing expense of a reverse mortgage loan. This monthly servicing fee is typically added to the outstanding loan balance each month that the loan connues in force. According to HUD guidelines, lenders are not required to charge servicing fees on a reverse mortgage loan. Instead, HUD recognizes that a lender may charge a higher interest rate, or build the cost of servicing into the rate, instead of charging a monthly servicing fee. This typically would be disadvantageous to borrowers who then would be incurring higher interest rates over the life of the loan. Therefore, most FHA reverse mortgage lenders have chosen to charge a monthly servicing fee. This has the eﬀect of lowering the overall borrower expense while sll providing servicers with a source of revenue to pay for their services. According to HUD Handbook 4235.1, Rev. 1, Secon 1-12, reverse mortgage servicing has the following features: SERVICING. The lender is permied to charge the borrower a servicing fee if this cost has not already been priced into the borrower’s mortgage interest rate. A. If the lender chooses to assess a servicing fee, the fee is established at closing as a monthly ﬁgure and the amount necessary to pay this fee throughout the life of the loan is calculated and set aside from the principal limit at closing (see Paragraph 5-7B. for calculaons). B. The servicing fee that may be charged on ﬁxed rate or annually adjustable loans may not exceed thirty dollars ($30.00) per month. The servicing fee that may be charged on monthly adjustable loans is uncapped. C. The lender adds this fee to the borrower’s outstanding balance monthly, and cannot assess any other fees to cover the costs of servicing.
So there appear to be straighorward guidelines on how servicing expense can be recaptured by the lender, with certain program limitaons to protect the borrowers. Something that is unique to reverse mortgage loans is the concept referenced in subsecon A of Secon 1-12; the concept of a servicing set aside. The reference to secon 5-7B of the Handbook describes where the descripon, calculaon and methodology for the set aside can be found. It is important to note that there are speciďŹ c limits in place on ďŹ xed rate HECMâ€™s and annually adjusng HECMâ€™s, while there is no limitaon on the monthly adjusng HECMâ€™s. Market forces currently have the monthly adjusng HECMâ€™s servicing fees is ranging up to $35.00 per month. Since the level of the fee established at the lenders discreon, you may want to make sure that your wholesale lenders oďŹ€er you mulple levels of servicing fees to oďŹ€er your borrowers.
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Fannie Mae HomeKeeper loans and most Proprietary and Jumbo reverse mortgage loans also have monthly servicing expense. The monthly servicing fee limit on the HomeKeeper is a maximum of $30.00 per month and Proprietary and Jumbo products individually determine what monthly servicing expense is to be charged. The monthly servicing fee, and ulmately the servicing set aside calculaon, inďŹ‚uences the amount of available funds a borrower will be able to access along with amount of revenues available to the lender. Having the ďŹ‚exibility to ďŹ nd the right combinaon should be one of your primary concerns for both the borrower and your company. During the next part of this two part series, we will discuss how the servicing set aside is calculated, we will debunk erroneous explanaons of what the set aside truly is and we will cover how to explain the set aside to reverse mortgage borrowers. About David J. Cesario: David J. Cesario is a naonal speaker and educator on Reverse Mortgage Lending. He serves as the Execuve Vice President of 1st Reverse Financial Services, LLC, a naonal wholesale reverse mortgage lender, located at 410 Quail Ridge Drive in Westmont, Illinois, 60559. The companyâ€™s website is www.1stReverse.com where informaon can be found about 1st Reverseâ€™s wholesale lending programs and opons for lenders interested in oďŹ€ering reverse mortgage loans.
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“Forward Thinking in Reverse”
David Cesario 1st Reverse Financial Services, LLC 410 Quail Ridge Drive Westmont, Illinois 60559 (877) 574 - 1000 email@example.com
Jerry Wagner Ibis Capital, LLC 2101 Paciﬁc Avenue PH 701 San Francisco, CA 94115 (800) 566 - 5077 reversemortgagehomepage.com firstname.lastname@example.org
America’s Recommended Mailers, Inc. 1680 S. Hwy 121, Bldg. B Lewisville, TX 75067 (800) 992 - 2722 armleads.com
Lender Lead Soluons 3 Hunngton Quadrangle Suite 303N Melville, NY 11747 (800) 562 - 6755 lenderleadsoluons.com Lisa Schreiber
10801 Thornmint Rd Suite 250 San Diego, CA 92127 (877) 229 - 7799 appraiserlo.com email@example.com
John LaRose Celink Reverse Mortgage Servicer 3900 Capital City Blvd Lansing, MI 48906 www.celink.com firstname.lastname@example.org
FirstAmerican/eAppraiseIT 5 Cherry Hill Dr Suite 200 Danvers, MA 01923 eappraiseit.com (800) 281-6200
LSK Consultants, LLC 39821 Foxglove Court Lovesville, VA 20180 (540) 822-9710 lskconsultants.com email@example.com Monte Rose
17100 Gillee Ave Irvine, CA 92614 (800) 516 - 0545 monterose.biz firstname.lastname@example.org Naonal Associaon of Reverse Mortgage
Loan Oﬃcers 22 Polly Drummond Hill Rd. Newark, DE 19711 (877) 2NARMLO (877) 262 - 7656 narmlo.org Valerie VanBooven
OnTheLevel 2982 Ora Avo Terrace Vista, CA 92084 (800) 909 - 1110 email@example.com
Reverse Market Insight, Inc. Aliso Viejo, CA (949) 429 - 0452 rminsight.net firstname.lastname@example.org
Reverse Mortgage Soluons, Inc. 2727 Spring Creek Drive Spring, TX 77373 (888) 918-1110 rmsnav.com
Smart Markeng 6722 Vista del Mar Suite A San Diego, CA 92037 (888) 811 0208 smart--markeng.com email@example.com
Tradion Title Agency 1991 Union Boulevard Suite C Bay Shore, NY 11706 (631) 328-4410 tradionta.com firstname.lastname@example.org
Next Generaon Financial Services Reverse Mortgage Naon 3301 Boston Street Balmore, MD 21224 (888) 973 - 8377 ngfs.net
The Last Word review
Looking at the Reverse World from a “Forward” Thinker by Lisa Schreiber I’ve been in the “forward” mortgage industry for over 22 years. From my start in post-closing all the way through retail and wholesale sales to sales management and EVP of American Brokers Conduit, I thought of myself as one of many knowledgeable people in our industry. Since starng my new venture as a consultant, I have relied on my experience and past industry partnerships and colleagues to build my business. Truth be told, I knew of reverse mortgages and like many didn’t think posively of the product as my percepon was that they negavely impacted the consumer. Of course what I have found out through educaon is, there is a great place for this type of lending for many in our communies. Educaon is a primary goal for me in any thing I undertake. I learn from asking lots of quesons and listening to the answers. As a consultant I found I had opportunity to be valuable to clients that had either reverse aspiraons or reverse plaorms. So how did I get started? First I went to one of my old colleagues that I admire for her sense of integrity and knowledge. I asked her to give me a Reverse Mortgage 101 crash course. She gave me all the industry data and taught me about the diﬀerent way you had to think about a reverse mortgage. She also opened my eyes to the risks and beneﬁts from the borrower and lender aspects. It was a terriﬁc presentaon and I learned a lot! Next, I started to get industry publicaons so I could keep up with the changes and issues that confronted the reverse world. Finally, I bought a cket to the MBA Reverse Mortgage Conference in San Diego last month. I found out later that there was a NRMLA conference in Philadelphia that same week, which would have been handy informaon as I live in Northern Virginia, but all part of the learning curve! The MBA Reverse conference was a good one as it looked at reverse mortgages as a newer enty for most, which it was for me and was geared to educate from that perspecve. Through the conference I learned the industry stascs, although each speaker had a diﬀerent number associated with the current available equity, from 2.5-4 trillion, understandable as home valuaons are an issue for any type of mortgage these days! So what were the main things I learned about the reverse world? Besides all the things you already hear; reverse is really a new business and not a product as its sales cycle is protracted due to the fact that you are selling to not only the senior but their
family (many cooks in the kitchen) and like our forward world, is highly regulated and becoming more so each day. If you are gun shy about things like suitability and further scruny regarding your originaon pracces, I am thinking this world is not for you. What I do see is opportunity for those that are willing to be educated. Per my conference speakers, only 2% of the eligible populaon has been penetrated. I am not sure what the number should be, as many will never need a reverse mortgage, but when I think of my own family members or those of my friends, I can see a real value to many. If we just think of the higher taxed areas of the US where the elderly are living longer than ever before, I can clearly see how the ability to tap the equity in your home to help you through your later years can be a huge beneﬁt. In the forward world without income to qualify for the payments, these same clients have been underserved. Another example of the major diﬀerences between forward and reverse worlds is the issue for servicers in the non-payment of taxes and insurance. Think about it, typically we have an escrow payment included in our mortgage payment that goes towards taxes and insurance, even if we waive the escrow (or impound) we understand it is our responsibility. A reverse scenario is more like when we pay oﬀ our mortgage and we are now on our own, so many forget that this is now their responsibility. I was happy to hear that servicers are now oﬀering a hold back opon to pay taxes and insurance for their borrowers. In the forward world I also advocate partnerships to develop referrals and talk about expanding your reach by using the internet. In the reverse world the internet is not the primary tool to market to, unless of course you are talking to the children of the seniors you are looking to educate. My favorite thing I learned is the places that make the most sense to hold markeng and educaonal seminars, Bob Evans and Sizzler restaurants as an example and make sure it is in me for the early bird special! This is not meant in any way to make fun of or denigrate the importance of this product or its clients! I am just really fascinated by the way my brain started thinking when I learned more about the reverse world. As a “forward thinker” I am glad I took the opportunity to understand the possibilies of helping those that need it the most. About Lisa Schreiber: Lisa Schreiber is currently a mortgage consultant and speaker with LSK Consultants, LLC. Lisa is a 22 year mortgage industry veteran, formerly execuve vice president with American Brokers Conduit and regional vice president with Bank of America. Her experse resides in building the bridge between corporate goals and successful ﬁeld implementaon. She can be reached by email email@example.com or by phone 540-8229710.
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To contact Lender Lead Solutions call 888.775.3631 or visit our website at www.lenderleadsolutions.com *As of March 17, 2008. Lender Lead Solutions is a division of World Alliance Financial Corp., a member of the KBC Group. ©2008 World Alliance Financial Corp.