The Reverse Review - September 2010

THE

REVERSEreview

S E P T E M B E R 2 0 1 0

ReveRse MoRtgages: an oRiginatoR’s tale

Simple and easy marketing strategies can improve your credibility in the reverse mortgage field

Sue Haviland

| TRR July / August 20102

It’s hunting season... Security 1 Lending is on the hunt for Reverse Mortgage brokers interested in becoming lenders and established loan officers looking to receive live transfers.

Join our team today!

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TRR 3

| TRR September 20104

A“ M o v i n g F o r w a r d I n R e v e r s e .”TRR09.10

i’m a Reverse Mortgage originator and Damn it, People like MeSometimes reverse mortgage originators must toughen up and deal with personal and professional criticismMichael Manfredi 12

Winning Battles While losing WarsDon’t waste your time and breath--convey important information when you get the opportunityJonathan Neal 22

Please say it again: “i Will not Make these Common Mistakes!”These seven common mistakes are easy to commit, but even easier to avoidSam Collins 24

FEATUREReverse Mortgages: an originator’s tale Simple and easy marketing strategies can improve your credibility in the reverse mortgage fieldSue Haviland 16

note from the editor ask the Underwriter industry stats

Directory the last Word

The Best is Yet to Come

5

Get Ready To Tackle That Summer Beach List 6

May 2010 8

Cost Effective Reverse Mortgage Marketing 101 3029

“How can a reverse mortgage originator continue to thrive in an ever-changing marketplace such as the one we are faced with now?“ page 16

| TRR July / August 20105

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As many of us watch or read the daily news, we all take a deep breath and try to believe the worse seems to be over regarding the US financial crisis. The stock market collapse is history, and the nation’s economy seems to be picking up momentum. Summer is almost over so it’s time to get back on track and close out the rest of the remainder of 2010.

Here at The Reverse Review we have been busy planning a wonderful September issue filled with many sales & marketing tips aimed to help you finish this year on top. Additionally, we hope these suggestions will enhance all originators ability to help seniors in the months to come.

This issue focuses on achieving credibility in the reverse mortgage industry. Michael Manfredi, who is an originator out of Arizona and a new contributor to The Reverse Review, shares his take on the meaning of credibility and how it brings him much success in our community. However, promoting such credibility can be just as important which is why we invited Sue Haviland to break down the marketing strategies that have contributed greatly to her success.

We can reclaim our industry by sharing tips of success within The Reverse Review magazine or on reversereview.com. Plenty of work still remains to be done in 2010 so let’s start by working together and growing the community as a whole in order to help promote the important reverse mortgage product.

Erica EnglishEditor-In-Chief

THE

reviewREVERSE

The Best is Yet to Come…

| TRR September 2010 6

For many of us parents, the delight in hearing the school bells ring has arrived, unfortunately with the passing of summer.

So what did you do on your summer vacation?For me and about two hundred other participants, there was a need to attend a HUD Appraisal Underwriting webinar! (No doubt, with that comment you now realize that August is a slow month for some of us!)

Many thanks to the gang at the HUD Denver HOC for an excellent presentation – is there a HUD form to file a complaint about that manufactured housing poll most of us missed?!

Not wanting to completely jolt you back into the desk chair, as a few more weeks of summer are remaining, perhaps a few general questions from the review material of the appraisal webinar I attended will start the blood flowing and motivate you to attack your summer beach list you created last month.

Q. What is the expiration date of an appraisal completed on August 17, 2010?

Q. What are the requisite “data” elements you must have in order to proceed with a reverse mortgage loan application?

Q. Where is the data plate located on a manufactured home?

Q. When does the name of the Lender have to be changed on the appraisal report?

Q. What is the new guideline for the maximum annuity amount you can sell to your borrower?

Q. If the comparable were better than the subject, would the appraiser line item amount be added or subtracted?

Q. Can a manufactured home foundation inspection report be used more than once?

Q. Which item does FHA not automatically require an inspection for - wells, septic, termites, or flat and unobservable roofs?

Q. With regard to the previous question, as an underwriter, which of the available responses would be your primary concern?

Q. What do the acronyms HRAP and DELRAP stand for?

It is important to carefully determine the condition of the subject property in a HECM transaction. In many situations, an appraisal and third party review of the subject property may not have occurred since their last “forward” mortgage transaction. Borrower age, financial stability and physical ability may have contributed to an increase in deferred maintenance potentially creating unsafe and unsound living conditions.

get Ready to tackle that summer Beach list If you haven’t completed your summer to-do list, here are some questions to ask yourself and

some tips to help you finish itralph rosynek

September 2010 TRR | 7

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A face-to-face interview with the Borrower, when possible, is an excellent way to avoid surprise appraisal issues and value concerns arising from poor property conditions. Alternatively, asking the right questions at the time of interview will also provide better overall assistance to the Borrower and help to avoid those surprise conversations down the road.

Key to an initial subject property conversation is the condition of the heating, cooling, electrical and plumbing mechanicals. Questions regarding the age of the roof, understanding structural issues (if any) and the Borrower’s ability to conduct routine maintenance are also essential.

As the summer comes to a close, the arrival of fall for many also represents a time of focused preparedness for the upcoming winter with respect to “getting the house in shape.” Product education with local licensed contractors is an excellent origination strategy when considering the nature of HECM repair features and benefits. Seriously, if you have not participated in a “refresher” course of late, you would be surprised how worthwhile it is to take a moment and get back to basics – I highly recommend it.

We have some tremendous industry agenda items on our plate, anticipated HUD changes, and some good news: increasing volume and interest in the HECM product. This sounds like a recipe for a busy fall.

The implementation of a new counseling protocol in combination with continuing consumer advocacy and state legislative efforts has certainly placed a great deal of focus on how we transact and deliver reverse mortgage loans to senior consumers. The key to maintaining a high level of professionalism and consumer safeguards is to remain fully educated and informed with the many facets of this product.

Welcome back from vacation!


After a very tough May for the reverse mortgage broker business, June provided a welcome bounce that almost kept pace with retail/direct endorsements. Broker volume grew 15.2% while retail/direct grew slightly faster at 17.6% as the overall business regained some traction from May’s trough levels. Retail/direct volumes have continued to outpace broker loans, continuing the trend started last month, but we’ll wait a while before calling this the new world order for reverse.

One of the interesting trends we’re watching is the consolidation of lending in the reverse mortgage market toward fewer larger lenders. We’ve written about this before, and it’s an interesting complementary perspective to the count of active lenders and average loans per lender.

• In 2008, there were 2,950 active lenders, compared to 3,151 in 2009.

• The 100 largest lenders for 2008 shrank -6.8% in 2009, but the other 2,850 lenders actually grew by 4.6%.

• The number of lenders shrank from 2,483 in Jan-Jun 2009 to 1,883 in 2010.

• The 100 largest lenders for Jan-Jun 2009 shrank -42.2%, while the other 2,383 shrank a smaller -32.6%.

So if the number of lenders is shrinking but the largest lenders aren’t staying ahead of the market as a group, what is the trade-off? Survival.

• Only one among the top 100 2008 lenders was not active in 2009 (1%), compared to 827 disappearances among the other 2,850 (29%).

• It got worse for both groups in 2010, with 3 of the top 100 2009 lenders gone (3%), but a whopping 1,136 (47.7%) of the smaller lenders leaving the business.

Of course, there were certainly some big winners among the survivors in the non top 100 lenders in both years, otherwise the growth rates would be lagging the top 100. It’s never been easy to be small, but right now the risk/reward is more exaggerated than ever. Big may not be beautiful these days but it’s a lot less ugly than being small.

inDUstRY sUMMaRY

retail endorsement Growth

17.65%Wholesale endorsement Growth

15.24%Total endorsement Growth

16.55%

tRailing tWelve Month enDoRseMents

10,000

8,000

6,000

4,000

2,000

07 8 9 10 11 12 1 2 3 4 5 6

*Numbers Represent MonthsRetail Wholesale

* Figures Above Reflect Change from Prior Month

5

6

7

8

9

10

11

12

1

2

3

4

ToT

UnITs ChG% UnITs ChG% UnITs ChG%

40,436

3,681

3,903

4,081

3,836

3,954

3,171

3,124

2,783

2,692

2,465

2,900

10.62%

-17.02%

6.03%

4.56%

-6.0%

3.08%

-19.8%

-1.48%

-10.92%

-3.27%

-8.43%

17.65%

5,392

5,246

5,567

4,692

3,901

4,326

4,450

3,890

3,038

2,813

2,086

2,404

16.63%

-2.71%

6.12%

-15.72%

-16.86%

10.89%

2.87%

-12.58%

-21.9%

-7.41%

-25.84%

15.24%

9,828

8,927

9,470

8,773

7,737

8,280

7,621

7,014

5,821

5,505

4,551

5,304

13.84%

-9.17%

6.08%

-7.36%

-11.81%

7.02%

-7.96%

-7.96%

-17.01%

-5.43%

-17.33%

16.55%

Retail Wholesale total

May endorsementsThe reverse mortgage lending market is showing

signs of consolidating into fewer larger lenders reVerse MarkeT InsIGhT

41,026 47,805 88,831


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Ralph RosynekRalph Rosynek is President and CEO of 1st Reverse as well as a HECM DE Underwriter. Mr. Rosynek has been involved in mortgage lending for over 30 years, with the last 5+ years exclusively providing reverse mortgage lending solutions. To contact Mr. Rosynek or to learn more about 1st Reverse Financial Services, please visit www.1streverse.com or call 877.574.1000.

sam CollinsSam Collins is the President of Sam Collins Reverse Marketing, LLC and Founder of REMALO, the Reverse Mortgage Association for Loan Officers. REMALO is a web based national sales, marketing, training, and full service center, created exclusively for Reverse Mortgage loan officers, correspondents, branch managers, key executives, and brokers. www.remalo.org or 877.262.7656.

John K. lundeJohn K. Lunde is President and Founder of Reverse Market Insight, Inc., a performance data analysis and consulting firm specializing in the reverse mortgage industry. RMI clients include 8 of the top 10 reverse mortgage lenders plus investors, servicers and vendors to the industry. Find out more at www.rminsight.net or call 949.429.0452.

contributors

Michael ManfrediMichael Manfredi is a Reverse Mortgage Originator and the CEO of Reverse Mortgage Concepts. Michael has originated hundreds of reverse mortgages since 2003. Michael is the married father of two boys, whose family enjoys exploring the Grand Canyon State. He is a licensed loan officer and mortgage broker in the state of Arizona.


Jonathan nealJonathan Neal is the senior partner at CCG-Capital Consulting Group, LLC, a sales and training consulting firm located in Atlanta, Georgia. Through his 30 years of experience, Jonathan’s primary focus has been on post-retirement and estate planning. Jonathan is recognized nationally as an author and coach, managing and training financial/insurance professionals who work principally in the senior market place. Jonathan can be reached by phone at 678.906.2850 oremail at [email protected].

sue havilandSue Haviland, CMI is the founder of Reverse Mortgage Success, a leader in education and training for loan originators who want to embrace and excel in the reverse mortgage arena. Sue is an author, coach, speaker, and an originator. Reach her at 410.557.0294, reversemortgagesuccess.com, or [email protected] .

John sorgenfreiJohn Sorgenfrei is the president of Assurance Home Loan, a correspondent lender located in Melbourne, Florida. Assurance Home Loan has been offering Reverse Mortgage programs to seniors since 2004. They also provide forward mortgages through FHA and VA. With over 25 years of uninterrupted lending experience, John can assure you the best quality service and the knowledge that only a time tested professional possess. John can be reached at [email protected] or 321.728.0101.


I have been a salesman all of my life and I’ve been in financial services for over 15 years. I have been required to pass many background checks, fingerprint checks, have credit reviews, and audits. As a result, everything you would ever want to know about me can be found on the internet. I have a U4, an MU4, and my life’s history is available online with the NMLS and the NASD. Basically, I am who I say I am, and I have never done a client wrong. My family, friends, and customers respect how hard I work and I display the evidence of my compliance on the walls of my office, as well as on every website, business card, and advertisement I produce.

I had spent two years searching for a career that would allow me to use my considerable experience to make a positive difference in the lives of my clients and secure my family’s future when I entered the reverse mortgage business almost a decade ago. During that time, there were many avenues I investigated and eventually ruled out because I could see a potential conflict of interest or I had a bad feeling about the industry in general. I finally chose the reverse mortgage industry because, unlike traditional mortgages, I could see a true net benefit for every client and I would be doing business with people who would honor a handshake promise and appreciate a job well done.

Years ago, it was not easy to make a living in the reverse mortgage business. The transactions would be capped by lending limits based on median home prices and public awareness was at an absolute minimum. There were no lender premiums and no fixed rate

products and almost no support from the government or related industries. Customers were few and far between and the country was just waking up to the possibility that reverse mortgages might be a good idea, but they were skeptical. We were on our own and some customers proceeded with a hint of blind faith, so we persevered and delivered on our promises. I knew it would only be a matter of time before it really caught on.

Competition, like free markets, is healthy for the evolution of an industry and we are certainly seeing our share of it. The growth of the reverse mortgage program has blossomed in the last few years, only to contract under the pressure of the housing value crisis and multiple layers of new regulation. More and more homeowners need reverse mortgages and they are inquiring or attempting to qualify, while fewer and fewer loans are actually closing due to additional barriers to entry, such as tougher qualifying ratios. The industry is consolidating and will continue to do so with the coming collapse of the traditional mortgage broker, as new financial regulations force originators to have banking ties.

The new regulations have not been good for reverse mortgages and it’s getting harder to be in this business. We are a public relations nightmare because we sell a financial service to seniors. Potential borrowers used to balk at closing costs but are now facing other issues like bad press, lower proceeds, higher insurance premiums, and the government imposed gambling on appraisals thanks to the HVCC. Industry veterans are scrambling to roll out new compliance

i’m a Reverse Mortgage originator and Damn it, People like MeSometimes reverse mortgage originators must toughen up and deal with

personal and professional criticismMIChael ManFreDI


with RESPA, NMLS and even Red Flag policies. Counseling has taken a turn for the worse and counselors are now killing another measurable percentage of reverse mortgage transactions. Do we really need all of this because a homeowner, age 62, wants to do a home equity loan with deferred interest?

This is where the big disconnect exists. In the court of public opinions, reverse mortgages do not stand a chance. It is estimated that a mere 75,000 of these loans will close by year end, but high profile politicians and journalists have weighed in with their opinions and convinced millions, for the most part, that reverse mortgages are not so good. They get it dead wrong and disseminate information either by design or out of ignorance. This information encourages lawmakers to tighten up lending laws and over-regulate the industry. The good news is that reverse mortgages have been noticed, but the bad news is that lawmakers look at reverse mortgages like they are the underbelly of an even more sinister industry.

So how is it that I spent so much time and effort choosing a noble career and working diligently to provide a much-needed service only to end up on the worst of the worst list? There are far too many of us doing a lot of good in the world to allow this to happen, yet reverse mortgages have become an easy target, sure to get attention and ruffle feathers. It seems as if there is an irresistible urge to publish reverse mortgage smears in major publications. What they don’t realize is that we are a group of trained professionals that (for the most part) practice good morals and ethics. Furthermore, there are just not enough deals gone bad to warrant the kind of negative attention that reverse mortgages get. It’s kind of like spotting a toupee; you only see the bad ones.

In 2009, there were over 3,000 lenders in the reverse mortgage business. I don’t know how many of them were NRMLA (National Reverse Mortgage Lenders Association) members, but to-date, only two were stripped of the designation as reported by the NRMLA advisory committee. Even if there are a lot more unscrupulous reverse mortgage lenders that have gone undetected, the industry as a whole is too small to hurt this country’s economy or cause another meltdown as some have suggested. In June 2010, the total number of new FHA insured loans topped 150,000 nationwide in one month—only 5,000 of them were reverse mortgages. If all the reverse mortgages defaulted, it would represent just 3% of the total market and, let’s face it, reverse mortgages are difficult to default on. A reverse mortgage may default for reasons that are much different than a traditional mortgage default. Unemployment, rising interest rates, and personal issues like divorce surely don’t make much of a difference in the overall health of reverse mortgage portfolios, but they could devastate traditional mortgages. Since reverse mortgages are not approved based on the borrower’s ability to repay the g

ReverseVision Inc.3310 Pollock Place • Raleigh, NC 27607www.reversevision.com(919) 834 0070 • [email protected]

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

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

The RESPAChallenge


loan, a different set of factors will affect the future quality of these loans, like shrinking home values and tax defaults. So, it’s my guess that when we finally see home values return to normal, we’ll probably stop hearing about how bad reverse mortgages are and HUD just might start increasing PLFs again.

In the meantime, I still need to do my job and that means I have to fight the uphill battle of a bad reputation. Some people lack the confidence they need to help themselves and I try my best to make them comfortable so they do not miss an opportunity. These are the folks that have been poisoned by the media, a neighbor or a family member that comes from that other bunch: the reverse mortgage advice squad. This is the group that was infected by the misinformation and bogus loan scenarios published in major news publications. These individuals are okay with borrowing $100,000, $200,000, or more from a home equity line of credit, as long as it’s not a reverse mortgage. They also believe that once homeowners reach the age of 62, they will need to be more closely watched and regulated and cannot be in charge of their own financial decisions. The problem is that they are only regulating reverse mortgages for this group. There is no limitation for 62 year old investors transferring billions in IRA accounts into stocks, gold, or other commodities. There certainly is no counseling required and the lack of state and federal supervision and control of these ventures is astronomical. This lack is because they don’t need to be supervised and controlled; they are capable of making their own decisions and usually are very conservative. So why, then, are some saying the use of reverse mortgage proceeds needs to be regulated? You can’t argue that you would save the economy from meltdown or seniors from losing their homes, because you would have to regulate the use of proceeds from all home equity loans to do that. People need reverse mortgages for all kinds of reasons. It’s ridiculous to think we should tell them what they can and can’t do with their own money.I talk to people who are losing their homes every day. Some are on their 3rd loan modification, have serious health problems, debt problems, and emotional distress, and they look to me for answers.

I talk to others who would like to turn the equity in their homes into investments, second homes, college tuition, and other viable ideas that they perceive will enhance their existence or make their lives better in some way. They are a good bunch of people and I enjoy serving them—I am motivated to move mountains to help them. I don’t sell investments, but if they want to invest the money or use it to pay bills, it should be up to them. Too many seniors have read something that stopped them from proceeding with the program or know someone who advised against it and that has stifled their ability to get the help they need.

I am working with a young lady right now who is 73. Her mortgage payment and car payment will drain her savings within a few months, but her brother talked her out of the reverse mortgage. He did not offer any financial assistance, but his advice trumped that of the counselor and mine as well. When her money is all gone later this year, I have a feeling she might call me again. Unfortunately, if home values continue to slide as they have been here in Arizona, she will not qualify for the loan anymore and she will lose any future potential equity, her place of residence, and all of her savings will be gone. Is this punishment for living beyond her means? Well, I hear that a lot. Many people would never take the time to think about the health challenges she has faced and the financial assistance she’s given to others in need over the years. The one thing that got her in trouble was a line of credit from Bank of America. Where was her big brother back then? Why didn’t he stop her from over-leveraging with the bank that provided the money, no counseling, and little to no qualifying? If she didn’t have that extra mortgage payment every month, she might have a chance. Why didn’t Bank of America do a reverse mortgage with her back then? That’s a really good question, isn’t it? When she calls me this winter to try to get the reverse mortgage because she has nowhere to turn, chances are I will not be able to help her and she will lose her home. The system let her decide for herself to do a home equity loan with her bank, but now it’s stopping her from fixing an even greater problem because someone has uttered the words “reverse mortgage.”

Over the years, I have had to defend this program and myself much more than I can remember. I have been accused of terrible things like taking advantage of seniors or trying to steal their homes. These accusers have no idea how hard I work to help my clients. In addition to these accusations, I am also part of that motley crew called mortgage brokers and that will raise eyebrows in any room these days. After hundreds of reverse mortgages, I’ve never had even one customer regret it.

“i talk to others who would like to turn the equity in their homes into investments, second homes, college tuition, and other

viable ideas that they perceive will enhance their existence or make their lives better in some way. they are a good bunch of people and i

enjoy serving them—i am motivated to move mountains to help them.


Here is what my customers say:

“i really didn’t know what to expect, but the reverse mortgage literally saved my life.”

“now that i have the reverse mortgage, i don’t understand why everyone doesn’t consider one.”

“i wish we would have done the reverse mortgage a long time ago.”

I have fond memories of many people I’ve helped over the years and I am thankful to have had the opportunity to meet them and work with them. I have written about them often in my blog, but it seems there is a lack of interest in the good stories. Many of them remain my good friends years after their loans have closed. I still hear from them, from time to time, when they have a question or a referral. They are a small group, but I know I’ve made their lives better and that the benefits will last them a lifetime. I feel good about being in the reverse mortgage business, even with all of the criticism; I know my customers appreciate my persistence. I hope I have made a difference, for the good of the industry.

ReverseVision Inc.3310 Pollock Place • Raleigh, NC 27607www.reversevision.com(919) 834 0070 • [email protected]

ReverseVision's international team of software engineers, attorneys and mortgage specialists turn these challenges into opportunities. They build the tools that give their customers a competitive advantage. This is why over 6000 reverse mortgage specialists in over 600 companies rely on ReverseVision every day.

The RESPAOpportunity

Can you afford not to use ReverseVision?

”i talk to others who would like to turn the equity in their

homes into investments, second homes, college tuition, and other viable ideas that they perceive will enhance their existence or make

their lives better in some way. they are a good bunch of people and i enjoy serving them—i am motivated to move mountains

to help them.

TRR 16 Reve

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“You have got to be crazy. This is a lapse in judgment on your part. This program will not be around for long. You’re going to build your business around senior citizens? ” These are the comments I heard from my long time friend and mentor when I told him the exciting news that I had decided to take the plunge and enter the reverse mortgage arena about 8 years ago. Now before you deem him mad, keep in mind that he felt he was looking out for my best interests and could not understand my decision to “give up” the forward world and go into reverse. g

sUe haVIlanD

Simple and easy marketing strategies can improve your credibility in the reverse mortgage field

TRR 17


Whenever I tell people how long I have been in the reverse mortgage business, they usually say I’m a real industry veteran. Not so fast. There are others who have been in the game much longer than I, some who truly were the trailblazers in an uncharted territory and we all have them to thank. But, I will admit to you that in the last 8 years, I have seen a lot of things come and go. Our industry has undergone many changes, and more are on the horizon. It makes perfect sense that as this industry grows and evolves, (many say we are out of the infancy stage and are in the growth phase of the business, and I tend to agree) change is inevitable. How can a reverse mortgage originator continue to thrive in an ever-changing marketplace such as the one we are faced with now? The answer may not immediately present itself, but oftentimes, when an industry is undergoing “growing pains,” the best thing to do is get back to basics. Wherever you are in your reverse mortgage career, stop for a moment and think, “What did I do to get here? What steps did I take to accomplish my goals to this point?” Sometimes the best thing you can do for yourself is tune out all of the “noise” that is going on around you and quit looking at every “shiny object” that crosses your path; stay focused on your goals. That’s not to say that you don’t want to assess your activities and marketing from time to time. You should do quite the opposite; a good look in the mirror is often a healthy thing.

When I first started in this business, things were a lot different, to be sure. For example:

• We only had one product, and it was one size fits all; • Counseling was different;• Origination fees were different;• We ordered our own appraisals;• HECM for purchase did not exist;• There were very few companies even offering the reverse mortgage;• FHA lending limits varied by county; and• What press coverage there was did not frame our industry in a positive light.

I could go on, but I’ll refrain. In many ways the evolution our industry has undergone has been of great benefit to the senior, but has posed challenges for the originator. We now must keep up with frequent changes to programs, pricing, and regulations that can vary from state to state, meanwhile keeping our seniors informed. While the “upkeep” now seems almost constant, I find that sticking with the basics keeps me grounded and focused on the reason I got into this arena in the first place: the senior.

In the early days, my marketing budget was a nice, round number (think zero). Working on a program about which there was limited knowledge on the part of my prospect base, coupled with a limited marketing budget certainly presented some challenges. As I look back now, it was the best situation to be in, since I was forced to develop practical, effective, and low or no-cost ways to build a business from scratch.

The following are some marketing and outreach methods I have used over the years and have found to be tried and true. Note that they are neither costly nor complicated. In some cases, I have added to or revised them, but the overall goal remains the same: getting in touch with the senior prospects in my community and positioning myself as a reverse mortgage expert in my area.

In many ways the

evolution our

industry has undergone has been of great benefit

to the senior, but has posed challenges

for the originator. We

now must keep up with

frequent changes to

programs, pricing, and regulations

that can vary from

state to state, meanwhile keeping our

seniors informed.


It’s All About the Connections

“Way back then,” when I made the transition from the forward world to reverse, there was little direction and it was difficult to find many resources for marketing. So, I did what I had always done in my forward business; I built upon the networking relationships I had already made and simply expanded them to include professionals who worked with the senior population. It was sheer genius (ok, not really but it worked then and it continues to work today). This strategy of building a professional network is among the most basic you will find. It will also be one of the most successful if you continue to work at it. Whether you belong to a structured group that meets regularly or one that meets less often, if you research the groups in your area and see which one(s) mirror the way you like to work, you will reap the benefits. Some originators prefer not to belong to organized groups, but rather to meet individually with other senior oriented professionals in their area. No matter which approach you prefer, the important point is to get connected with as many as possible, and build relationships with those whose ideals and goals most closely match yours.

Here are a few suggestions for professionals to target in your area:• Elder Law or Estate Planning Attorneys• Divorce Attorneys• Bankruptcy Attorneys• Financial Planners• CPAs• Insurance Agents (Life & Health, Property & Casualty, and Long Term Care)• In Home Care Agencies• Funeral Home Directors• Geriatric Care Managers• Home Improvement Contractors (CAPS designation)• REALTORS®

These are just a few suggestions to start or add to your network. It’s not necessary to have every category in your network and you’ll probably add some that I did not list here. I suggest you have more than one from the categories you select. Geographic restrictions and areas of specialty make this a prudent practice. By learning about the services each of these professions offers, you not only build referral sources, you become a source of information for your senior clients. Be sure you are a true partner to these other professionals, and look for ways you can help them build their business. As they say, pay it forward.

One Step Further

In looking at the list above, do you notice something that many of these professions have in common with us in the mortgage industry? Yes, they need continuing education. Why not become that preferred provider? Once again, it’s not costly (it often involves little more than your time) and you become much more than a reverse mortgage originator. You are positioning yourself as a true expert in your community. Think you can’t possibly do this? Think again. I have been offering continuing education for years. REALTORS® were my audience when I was in the forward work, so I simply prepared a course for them on the subject of reverse mortgages (and this was way before HECM for purchase) g

In many ways the

evolution our

industry has undergone has been of great benefit

to the senior, but has posed challenges

for the originator. We

now must keep up with

frequent changes to

programs, pricing, and regulations

that can vary from

state to state, meanwhile keeping our

seniors informed.


and offered it throughout my state. I then received requests to provide the same for other real estate professionals and now do this on an ongoing basis. If you work with financial planners and CPAs, structure a course around their needs.

What about the seniors in your local community? Do you currently provide seminars? If you’re comfortable in front of a room, take this a step further. Many community colleges have experienced the benefits of offering lifelong learning classes on various topics, and reverse mortgages fit in perfectly. The college will be pleased to assist you in getting a course together (another addition to their offerings) and once again, you are the expert. A large part of our business involves educating the seniors and their families, why not simply do this in a more formal setting? Consider teaming up with an elder attorney or financial planner if that model suits you, or just go it alone, professor! There are so many ways to offer education to professionals and to the public; I could probably do an entire piece on that topic alone, but we need to move on.

Just Show Up

In keeping with the strategy of working with other professionals, I am often asked, “where do I find them?” It’s easier than you think. First, enlist the help of others that you already know. Seek a warm introduction to the particular profession you are targeting. Once you have begun to build your network from these, now you need to go where the professionals are. I belong to and regularly attend several networking and education events for professionals OUTSIDE the reverse mortgage business. In particular, look for real estate groups (you should most certainly be a member of and volunteer at your local real estate board), insurance groups, and financial planners associations. You get the picture. It continues to surprise me how often I am the only reverse mortgage professional in the room. Don’t ignore the mortgage industry groups. Networking with your peers can be quite effective if done properly. Be selective and

only attend those functions you think are appropriate. I found that early in my reverse career, some of my best referrals came from loan officers in the forward world who used to be my competition. In addition to professional groups, look into the organizations within your community. The Chamber of Commerce in your area probably does not have a reverse mortgage representative. Of course it makes sense to include a senior oriented professional group, so while these were difficult to find years ago, that is no longer the case. If you can’t find one, start your own, and take the initiative. Civic and faith based groups should be on your list as well. Find a charity that focuses on a cause that resonates with you and do more than contribute funds—volunteer. It’s also important

that your local elected officials understand the importance of the reverse mortgage program to the local community. If you are so inclined, connect with these local officials and offer to be the source of information and updates on the program.

The Media In All of Its Forms

When you think of the media, do you think it only includes being interviewed on radio or television? Think again. If you are not comfortable or think you are not ready to get in front of the camera or microphone,

don’t worry, there are many other opportunities. By the way, you are capable of those things; you just don’t know it yet. Get in touch with your local publications and offer to prepare an article on this fantastic program that is of great interest to area seniors. I have even gone so far in the past as to purchase last minute discounted advertising space (this is a little known secret the publications will generally not tell you about) and used that space for an article. Collect “success stories” and testimonials from past clients and include these in your writing (always get permission).

Now let’s talk about the “new” media: social media. I will admit to being slow to embrace this form of outreach at first. Maybe it was fear of being left behind, or not wanting to appear uninformed, but I finally took action. In a way, I realized how our seniors must feel

Many community colleges have experienced the benefits of offering

lifelong learning classes on various topics, and reverse mortgages fit in perfectly.

The college will be pleased to assist you in getting a course together (another

addition to their offerings) and once again, you are the expert. A large part of our business involves educating the seniors

and their families, why not simply do this in a more formal setting? Consider teaming

up with an elder attorney or financial planner if that model suits you, or just go it

alone, professor!


not completely understanding the reverse mortgage program. So, I did what I knew I had to do. I found someone who is an expert in this type of marketing and learned from her. I now feel much more comfortable, although I am far from an expert in using social media. It enhances the other forms of marketing that I use and gives me even more ways to position myself as the local reverse mortgage expert. As with the other strategies discussed here, it’s not costly and not complicated; it’s an opportunity to learn something new.

Earlier in this article, we talked about presentations and offering classes. Be sure to video and/or audio record yourself when you speak. You can then use short pieces of these presentations to promote yourself on your website. Consider a webinar series that you can offer to prospects, and promote it on your site. Often, children are scattered around the country, while mom and dad are local. Expand your outreach to the children or other trusted advisors with webinars or other electronic means. Be sure to post your newsletters or industry updates on your site as well.

Do You Need A Little Nudge?

When you feel like you are in a rut and your efforts are not paying off, think about this: Who do you take advice from? Do you surround yourself with like-minded success oriented thinkers?

From time to time, we all need someone whom we can bounce ideas off of and get some honest feedback. Maybe you are part of a mastermind group. If so, good for you, if not, consider a coach. You can participate in coaching groups or as an individual.

Review your marketing from time to time. At the beginning of this piece I wrote, “A good look in the mirror can be a healthy thing.” You must be able to assess the success rate of each marketing strategy. Whether you are spending money or time, track each strategy and modify as needed.

We’ve covered quite a bit of ground here and I hope I’ve given you some food for thought. I truly enjoy originating reverse mortgages and sharing what I’ve learned with others in the business. Whether you are a seasoned reverse mortgage originator looking to jump start some old strategies or you are new to this wonderful reverse business, keep yourself focused on the senior and the many benefits the reverse mortgage program can bring to someone’s life. You have found (or maybe it found you!) a profession where the work we do today can have real impact tomorrow. Take pride and continue to serve our seniors.


A number of years ago, I left my house one Saturday morning with the sole intent of buying a new car. I knew what car, color, and accessories I wanted, and I knew what I was willing to pay. There were two dealerships near my house, both of which had the car I wanted, so I went to the closest one first. I found the car I wanted in the lot just as a salesman walked up to me and asked if I needed help, to which I answered, “Yes, I have two questions and if I like the answers, I will buy this car today.” Now, I am sure he heard me, but hearing is not the same as listening, and for some reason, rather than asking what my questions were, he started telling me about the engine. He insisted that I come to the front of the car where he opened the hood and started pointing out all kinds of things that meant nothing to me. Finally, after about ten minutes of him rattling on about everything there was to know about car engines, I said, “Thank you,” and walked away. I got back in my car and drove to the other dealership, met a salesperson, and asked if they had the car I was looking for, to which he said, “Yes.” At which time, I told him the same thing I had told the other salesperson, the difference being that this salesman asked what the questions were. I asked the questions and he answered both as we walked to the car. After completing all the paperwork, I drove my new car home.

Here’s the deal. I don’t know anything about engines and don’t care to learn anything about them. In fact, that overly chatty salesman could have told me that the engine incorporated sterile fallopian tubes and I would have cared less, how could I have, I wasn’t listening. You see, when it comes to cars, what is important to me is that they are comfortable, with windshield wipers, lights, air conditioning, and a heater that all work, and most of all, they start when I want to go somewhere.

When it needs gas, I put gas in it, when it needs new tires, I go to a tire store, and when it needs maintenance, I take it to a service center. In other words, when it comes to servicing my cars, I take them to a specialist who is honest, dependable, and knows what they are doing.

The moral of the story: the first salesman proved to me without a shadow of a doubt that he knew more about engines than I do; the second salesperson made the sale because he put what was important to me ahead of his ego.

Over the last three years, I have spoken to hundreds of professionals working in sales/marketing positions in the Reverse Mortgage and Financial Planning fields and during that time, I have learned a lot of things, none of which is more profound than the communication chasm that still exists between these two groups.

When I say communication chasm, I’m not talking about the contact aspect of the communication process. After all, there can be no doubt that people on the reverse mortgage side of this equation have done an exemplary job when it comes to reaching out to their brethren on the financial planning side. What I’m talking about is what is being conveyed; in short, most RM people are spending a lot of time telling financial planning people things they don’t care to hear about and as a result, they simply aren’t listening. It makes me think of the lyric in the song “Comfortably Numb” that says “your lips are moving but I can’t hear what you’re saying.”

In the process, far too many RM professionals waste a lot of hard earned opportunities because they fail to explain why a reverse

Winning Battles While losing Wars Don’t waste your time and breath--convey important information when

you get the opportunityJonaThan neal


mortgage might be the perfect solution to any number of problems seniors are facing today.

For the most part, Financial/Insurance Advisors don’t know, nor do they care about all the details involved in the makeup of a reverse mortgage. What they do care about is that reverse mortgages can provide features and benefits that can be beneficial to their clients.

They don’t have the time to learn all the ins and outs of your product and that puts you in a great position, because you do know everything there is to know about RMs, which, in effect, makes you a specialist; in other words, your knowledge,

professionalism, and dependability are of value to a financial planner whose business is focused in the senior market place.

If I was working in the reverse mortgage field and had a copy of “Reverse Mortgages – What Every Financial Advisor Should Know,” I would go straight to section two: “Reverse Mortgages

in the Financial Plan.” Why? Because the first section is about the basics of reverse mortgages, which is something you already know. The second section, on the other hand, talks about how incorporating a reverse mortgage in a financial plan can provide seniors with options that can enhance their financial positions.

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

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Reverse mortgage professionals are faced with multitasking and often find that each day becomes so busy that we often don’t see the mistakes that are occurring right before our very eyes. If we are not careful, we can make mistakes that cost us significant opportunities and bottom line profits.

I have found seven mistakes that are common to my everyday business and want to share them with you in hopes that you can avoid them.

#1: Lack of an iron clad system for senior client data collection

How often do you lack the information to contact a senior client because, somehow, their phone number and contact information got lost in the shuffle? The real gold in any business is in your senior client base.

It is 10 times easier to get an existing client to return to you or to recommend someone else than it is to get a new client to do business with you. What would happen to your senior business if you had to constantly rely on selling new clients without the opportunity to work with your existing clients? If collecting and keeping organized client information is so important, why do many originators still fail to collect their client data? Collecting the necessary information allows you to continue to market to your most valuable asset—YOUR EXISTING SENIOR CLIENTS.

#2: Lack of a Referral Program

Who is the second easiest client for you to acquire? The answer is a referral. Unfortunately, most believe the myth that if they treat their senior clients great and give them great service, the clients will gladly refer their friends to them. This leads us to our second common mistake: the lack of a referral program.

The last thing your senior client is thinking when they are finished doing business with you is, “Who can I send to the nice people I know so that they can get some more clients?” It’s not because they don’t want to, but it’s because we are all too busy to be thinking about other things going on in our lives. That’s why you need to have a “Senior Client Rewards Referral System” in place, which will give your existing clients an incentive to refer. A client referral program doesn’t have to cost a lot of money and most times the reward can be as simple as a “thank you.”

#3: Lack of a Lost Client Reactivation Program If a referral client is the second easiest client for you to have, then who do you think is the third easiest client to get? The answer is your “lost clients.” Again, most of us totally ignore the clients that have not done business with us in several years, when in fact, these people are infinitely easier to convert than any new client, as long as you know how. This marketing mistake is the lack of a Lost Client Reactivation Program. g

Please say it again: “i Will not Make these Common Mistakes!”These seven common mistakes are easy to commit, but even easier to avoidsaM CollIns



Guardian First Funding Group, LLC, One Penn Plaza, Suite 1414, New York, NY 10119. Trade/servicemarks are the property of Guardian First Funding Group and/or its subsidiaries. Licensed by the Department of Corporations under the California Finance Lenders Law; Licensed by the California Department of Real Estate (Guardian First Funding Group, Inc.); Connecticut – Mortgage Correspon-dent Lender/Broker # 14560; Delaware, Office of the State Bank Commission, MB License NO.010889; State of Florida Office of Financial Regulation; Georgia Reg.#19764; Maryland, Mortgage Lender 11811; Massachusetts Mortgage Broker License NO. MB 3748 – acting in the capacity of a Mortgage Broker in MA; Michigan – Mortgage Broker #FL 0010711, 2nd Mortgage Registration SR

0010743; Registered Mortgage Broker, NYS Banking Department; New Jersey – State of NJ Department of Banking and Insurance Reference No. 0804609-C20; Licensed with the Pennsylvania Banking Department; and Licensed by Virginia State Corporation Commission License #MC-3327; Texas Mortgage Banker, registration # 84221. Some products may not be available in all states. All loans arranged through third parties. This is not a commitment to lend. Restrictions apply. All rights reserved. We arrange but do not make loans. Equal Housing Lender.

Dedicated to setting the standard of quality and ethical dealings with seniors and providing outstanding education, honesty and knowledge.

Robert WagnerPaid Celebrity Spokesperson

Come and join the most experienced management team

in the business.

Send us your resume!Upload at www.guardianfirst.com/jobs,

email to [email protected] or call us at 1-800-682-1577 (option 3).

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Guardian First Funding Group, LLC, One Penn Plaza, Suite 1414, New York, NY 10119. Trade/servicemarks are the property of Guardian First Funding Group and/or its subsidiaries. Licensed by the Department of Corporations under the California Finance Lenders Law; Licensed by the California Department of Real Estate (Guardian First Funding Group, Inc.); Connecticut – Mortgage Correspon-dent Lender/Broker # 14560; Delaware, Office of the State Bank Commission, MB License NO.010889; State of Florida Office of Financial Regulation; Georgia Reg.#19764; Maryland, Mortgage Lender 11811; Massachusetts Mortgage Broker License NO. MB 3748 – acting in the capacity of a Mortgage Broker in MA; Michigan – Mortgage Broker #FL 0010711, 2nd Mortgage Registration SR

0010743; Registered Mortgage Broker, NYS Banking Department; New Jersey – State of NJ Department of Banking and Insurance Reference No. 0804609-C20; Licensed with the Pennsylvania Banking Department; and Licensed by Virginia State Corporation Commission License #MC-3327; Texas Mortgage Banker, registration # 84221. Some products may not be available in all states. All loans arranged through third parties. This is not a commitment to lend. Restrictions apply. All rights reserved. We arrange but do not make loans. Equal Housing Lender.

Dedicated to setting the standard of quality and ethical dealings with seniors and providing outstanding education, honesty and knowledge.

Robert WagnerPaid Celebrity Spokesperson

Come and join the most experienced management team

in the business.

Send us your resume!Upload at www.guardianfirst.com/jobs,

email to [email protected] or call us at 1-800-682-1577 (option 3).

We Made Reverse Mortgages A Household Name

Loan Officers receive leads from the renowned Robert Wagner Television Campaign

Sponsor LO’s for SAFE Exam and all state licensing

CRM system customized for Reverse Mortgages

Marketing tools to make you a SUCCESS

We invest in you - Training, Technology and Support

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Do you have one in place? Refer to mistake #1, since lacking a system to manage your data is perhaps the biggest reason lost clients get lost. Without a system, you can’t possibly remember who you really lost. You need a lost client reactivation program!

#4: Lack of ‘shameless’ self promotion

One thing that I have discovered in speaking with hundreds of loan professionals is that everyone thinks their particular market is different. Every one of you has something different or special about you: where you live and market. The big mistake you are making is keeping it a secret. You have a great opportunity to promote yourself and your business, and the best part is that you can do it for the cost of a “first class” stamp—just 44 cents. That’s right; write a simple 1-page press release and send it out in a #10 envelope. Your local papers and media are hungry for your story, but they can’t run it unless you give it to them. Making the mistake of believing that they will seek you out is simply that: a mistake. In fact, over 80% of all local news stories are a result of a simple press release. News sources are starving for your story, all you have to do is give it to them.

#5 & 6: Working ‘in’ your business instead of ‘on’ your business; and Not realizing the overall importance of marketing

These two marketing mistakes actually go hand-in-hand. One of the biggest problems I hear from reverse mortgage originators is, “I’m too busy. I’m too busy to do any marketing because I’m the best senior consultant in my market and I need to service all my senior clients personally. Plus, I need to shop the marketplace and know what others are doing.” The problem is you are working “in” your business instead of “on” your business.

If there is one thing that you should write down and post as a constant reminder to yourself, it is this:

STOP SEEING YOURSELF AS JUST A LOAN ORIGINATOR IN YOUR REVERSE MORTGAGE BUSINESS, AND START LOOKING AT YOURSELF AS A MARKETER OF SENIOR CLIENTS.

The marketer of any business will be the one who achieves total financial freedom. The real money is in the marketing, not in actually doing all the tasks within your senior business. Setting aside time to work “on” your business instead of “in” your business will become the most profitable time that you spend during your entire career. Make the time to learn marketing.

#7: Too infrequent contact with current clients

Now, I just told you that referrals and lost clients are the 2nd and 3rd easiest clients to cultivate, and you probably already guessed that your present clients are the first. The best way to accomplish greater response is to simply increase the frequency of your contact with them. If you think you are mailing or calling your clients too often, you’re probably wrong!

The proper frequency to contact your clients is daily to begin with, then taper off to twice a week, then once a week, then once monthly. The real point is that you should never stop unless your senior clients tell you. Did you know for every month that you do not contact your clients, you lose your relationship with 10% of them? So, if you wait 10 months, you might as well be mailing to a list you find in the phone book. You probably have time and money invested in establishing the contact, so don’t lose that investment. Your goal is to become the ‘welcome guest’ not the ‘unwelcome pest’.

For the future

Take time to review these 7 common mistakes. I imagine you are not making all seven, but I guarantee we are all guilty of at least one or two. Take the time to make time, and turn obstacles into opportunities!

”

“the marketer of any business will be the one who

achieves total financial freedom. the real money is in the

marketing, not in actually doing all the tasks within your senior business. setting aside time to

work “on” your business instead of “in” your business will become the most profitable time that you spend during your entire career.

Make the time to learn marketing.


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Here are the five questions you need to ask yourself before you begin to customize your own limited budget Reverse Mortgage marketing plan:

• Where does my target audience live?• What are the repetitive habits of most seniors?• How can I get my message out to Seniors in a cost effective

manner?• What businesses are often visited by Seniors?• Why would a Senior request information on Reverse

Mortgages? Common sense is really your biggest asset when it comes to marketing. I have included a few basic questions you need to ask yourself before you begin a marketing campaign. You will need to measure your results in order to fine-tune your program and really determine what’s getting the job done for you. Do not be afraid of retooling your plan as the market changes. Just keep asking yourself, “What is my audience looking for and where are they finding it?” One thing the last five years in the industry has taught us is that you’d better be flexible because you are going to need it if you plan on surviving.

You need to get out of the office and meet business owners whose clients are predominantly seniors. Some of the more productive possibilities are Accountants, Financial Planners, and Elder Attorneys. Call and set up appointments first, as some business owners may take offense to a cold call, which may interrupt their current train of thought. It may take a while to make that connection, but do not expect the one call close as a referral source.

Having a good attitude is really important too. Most business owners are really attracted to individuals whom they feel are in good spirits. Local businesses are always much more apt to want a local source to refer their clients to, so stay in town (it saves gas too). Other cost effective ways of getting your message out to seniors is by visiting their housing developments and posting a flyer in the clubhouse (ask permission first). Study your product offerings and genuinely listen to your clients’ needs and you will find a way to succeed.

Other often overlooked opportunities are the small trade shows geared toward senior homeowners. Bring file cards with a few simple criteria for the senior to fill out (i.e. name, address, phone number, etc.) and in return, raffle off a plant or candle (everyone likes free gifts). Finally, consider joining a local fraternal organization like Elks, Moose, or rotary clubs. Approach local libraries or churches and offer a free workshop, which explains all the newest advancements and offerings made available through the HECM reverse mortgages. Most seniors don’t know they can receive funds in multiple ways (i.e. a lump sum, line of credit, monthly payments, or a combination of the three). Seniors don’t realize that if they have a mortgage, they can possibly pay it off with a reverse mortgage and relieve themselves of the payments forever.

Marketing is the combination of everything you do to advance your business in the most cost effective manner, yielding maximum returns. All of the above require a small monetary investment and can yield very substantial returns. This just requires a grass roots effort in today’s market, as returns have been continually restricted. Pick up the phone and call five local business owners like those mentioned above; your business will increase and your attitude will improve.

Cost effective Reverse Mortgage Marketing 101 Don’t be afraid to change your marketing plan; stay on top of your clients’ needs John sorGenFreI


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Documents

The Reverse Review - September 2010