HECM FOR PURCHASE BUILDS MOMENTUM New Rules Help Stakeholders Enhance Their Businesses REALTORS LOAN OFFICERS INSIDE: Rethinking Your Role Removing the Mysteries Behind Social Security Final Rule Updates Older Americans Act Regulations P.22 The official magazine of the National Reverse Mortgage Lenders Association www.nrmlaonline.org May-June 2024 Volume 17, No. 3 P.27 P.30
From the Top Neil Sweren, CRMP, Senior Vice President, Atlantic Coast Mortgage By Darryl Hicks 9 Those We Help Homeowner strategically uses the reverse mortgage line of credit By Darryl Hicks 32 Features 16 HECM for Purchase Builds Momentum New rules help stakeholders enhance their businesses By Joel Berg 22 Rethinking Your Role Collaboration with other retirement professionals fosters trust By Thomas A. Barstow 27 Removing the Mysteries Behind Social Security Martha Shedden created a career out of deciphering the intricacies of the retirement program By Thomas A. Barstow 30 Final Rule Updates Older Americans Act Regulations By Darryl Hicks Columns 2 In Reverse Complex rules require professional help By Thomas A. Barstow 4 Steve Irwin: Moving Forward Brookings report boosts reverse mortgages 6 Board Room Playing your part in our industry’s success By Carmalon Batiste Departments 8 Hey, Members A roundup of issues and news for NRMLA members 34 Member News Who’s who in reverse mortgages 36 By the Numbers How far does $1 million go in retirement? May-June 2024 Volume 17, No. 3 CRMP: Across the Kitchen Table A chat with Fernande Marie Bencze, CRMP, Alliance Reverse Mortgage By M. Diane McCormick 12 Contents PUBLISHER Peter Bell pbell@dworbell.com SENIOR EDITOR Thomas A. Barstow thomas.barstow@theYGSgroup.com ASSOCIATE EDITOR Darryl Hicks dhicks@dworbell.com MANAGING EDITOR Therese Umerlik therese.umerlik@theYGSgroup.com MANAGING EDITOR, DWORBELL, INC. Jessica Hoefer PRESIDENT Stephen Irwin NRMLA EXECUTIVE COMMITTEE CO-CHAIRS Scott Norman, Finance of America Reverse Michael Kent, PHH Mortgage Corp. dba Liberty Reverse Mortgage DESIGNER Tara Smith ADVERTISING SALES Natalie Matter Bellis natalie.matterbellis@theYGSgroup.com Reverse Mortgage is the official publication of the National Reverse Mortgage Lenders Association. The magazine is published every two months. For inquiries regarding association membership and/or magazine subscriptions, please call Darryl Hicks at 202-939-1784. Advertising and editorial inquiries should be directed to Natalie Matter Bellis (natalie.matterbellis@theYGSgroup.com) and Therese Umerlik (therese.umerlik@theYGSgroup.com), respectively. Association & Subscription Contact: National Reverse Mortgage Lenders Association 1400 16th St., NW, Suite 420 Washington, DC 20036 202-939-1760 lross@dworbell.com Industry: www.nrmlaonline.org Consumers: www.reversemortgage.org Advertising & Editorial Contact: National Reverse Mortgage Lenders Association 1400 16th St., NW, Suite 420 Washington, DC 20036 202-939-1760 ©2024 National Reverse Mortgage Lenders Association
Complex Rules Require Professional Help That’s True When Talking About Taxes, Social Security or Reverse Mortgages By Thomas A. Barstow OVER THE YEARS, I have written about various tax proposals, knowledge that quickly becomes obsolete because of the ever-shifting nature of our politics. Along the way, I have found a flat tax to be a compelling argument for simplification, whether it was from Steve Forbes or someone else touting a tax return that could fit on the back of a postcard. As common sense as some of those proposals might seem, I quickly realized that simplification would be problematic for the tax attorneys, financial planners, tax preparation companies, federal revenue agents, state workers or anyone whose job depends upon people being befuddled by our tax system. Too many jobs and too much money are at stake to keep it simple. So, it’s best to retain the experts who can help keep you compliant. Just ask Al Capone, Wesley Snipes, Martha Stewart or Willie Nelson. So, what does that have to do with helping companies or loan officers sell reverse mortgages? Perhaps, nothing. Perhaps, everything. The tax situation is one example of In Reverse 2 REVERSE MORTGAGE / MAY-JUNE 2024
how just about everything has become overwhelmingly complex. And the more loan officers understand the financial complexities, the more likely they will be to prosper. Speaking of Complex In this issue of Reverse Mortgage magazine, one theme recognizes Older Americans Month in May. In the article Removing the Mysteries Behind Social Security (p. 27), we talk to Martha Shedden, president and co-founder of the National Association of Registered Social Security Analysts. She and her partner created the organization in 2017 after determining that specialists are needed to help people untangle the rules. Professionals who earn the Registered Social Security Analyst (RSSA) designation can guide people to help them make the best possible decisions for maximizing their Social Security benefits. “No two people are ever the same, and I’ve never had two cases that were the same,” Shedden says in the article. “Hundreds of thousands of claiming strategies are available, so you have to do an analysis. And a lot of money is at stake, too.” Her organization encourages RSSAs to build networks with retirement specialists, such as financial planners and tax attorneys, who can help their clients with details beyond the RSSA’s expertise. In other words, RSSAs don’t need to be tax attorneys or financial planners. They just need to know where to make referrals. Similar networks of professionals help people navigate the complexities of Medicare, the federal health insurance available to people 65 and older. A Service Approach That same advice has been touted by leaders at NRMLA who increasingly advocate for a service approach to selling reverse mortgages. Yes, the ultimate goal is for people to sell more reverse mortgages. But it would be better for the industry, and everyone involved—especially the older adult consumer—if loan officers networked more as problem-solvers and purveyors of sound retirement guidance than simply as experts in lending. In the article Rethinking Your Role (p. 22), Shain Urwin, national reverse mortgage director at C2 Financial, outlines how he has done just that. He says his success has been built on developing a reputation as someone who can help people with their retirement questions, even if he doesn’t have the answers. That has meant building a network with financial planning professionals. His approach might not lead to an immediate sale, but it creates a network of trust that allows his business to grow. He is one of the people who has the RSSA designation. This tool allows him to teach other loan officers how they can help clients with their Social Security decisions. “Just talking about Social Security optimization helps the equity conversation come into play because they have to talk about how they are going to get from age, let’s say, 65 to age 70 and where are they going to get that income if they delay Social Security,” he says. Simplifying the HECM for Purchase Sometimes, new rules and regulations might even lead to simplification. In the March/April 2024 issue of Reverse Mortgage magazine, we talked about the new HECM Handbook, which is now fully in effect. Some of the more notable updates involve the HECM for Purchase, which we explore in more detail in the article HECM for Purchase Builds Momentum (p. 16). Writer Joel Berg outlines how experts in this niche product see tremendous potential as we get deeper into 2024. “The greatest thing about the HECM for Purchase is showing borrowers the ability to get what they want without being strapped with a monthly mortgage payment,” says Alison Calamia, CRMP, and assistant vice president of America’s Mortgage Resource Inc. As the reverse mortgage expert, you can spread those messages to your clients and your network of retirement planning professionals. Again, you don’t need to be an expert in taxes, Social Security or Medicare. But the more you understand those issues—and have the experts who can fill in the blanks for your clients—the more valuable your services become. And with the 2024 election season upon us, I doubt that Washington will be going out of its way to make anything simpler anytime soon. Embrace the complexity. It’s here to stay. Thomas A. Barstow, senior editor of Reverse Mortgage, is a writer and editor based in Pennsylvania. In Reverse REVERSE MORTGAGE /MAY-JUNE 2024 3
Brookings Report Boosts Reverse Mortgages NRMLA Supports the Recommendations By Steve Irwin, President, National Reverse Mortgage Lenders Association AS WE ARE keenly aware, housing wealth remains one of the greatest assets for the vast majority of the ever-increasing population of older homeowners in the United States. And the ability to access that equity, under the right circumstances, is the key to enabling a more secure retirement. How then can we, as an industry, broaden the accessibility to reverse mortgage programs in a boldly creative, yet responsible way? Are there product enhancements that might materially improve many of our older homeowners’ standard of living? It is interesting to note that the Brookings Institution, the think tank that conducts research across various social sciences, has recently published a set of proposals that it refers to as “a new paradigm for retirement” (www.brookings.edu). One of the seven key components of this new paradigm is a focus on better access to reverse mortgages. The Brookings report, however, notes that reverse mortgages can be costly, require preventative servicing and would benefit from more efficient conversions from forward mortgages to reverse mortgages. NRMLA and its Board of Directors agree with this report’s reverse mortgage recommendations. In fact, we will continue to advocate for solutions that will directly address the cost of our products. Some potential solutions to addressing the cost of reverse mortgages might include: • Reducing the initial mortgage insurance premium (IMIP) for a defined portion of the available maximum claim limit. As borrowers in lower-valued homes are faced with higher closing costs as a percentage of available loan proceeds and relatively higher upfront costs remain a barrier to accessing equity for many lower- to moderate-income older adults, such an adjustment in IMIP may enable many more of our older homeowners to effectively age in place. • Increasing incentives to the borrower to use reverse mortgage proceeds to fund home improvements that increase energy efficiency and/or modifications that help ensure the subject property can properly accommodate the borrower’s ability to continue to age in place. • Increasing incentives for borrowers who only wish to access a smaller portion of their available equity. Ginnie Mae has taken a step in incentivizing such program developments by reducing the mandatory pool size, and HECM program enhancements might also be recommended to provide the smaller dollar amounts many older homeowners need to help close any retirement financing gaps. These approaches are but a few of the improvements NRMLA and its Board of Directors continue to recommend. Through the support and participation of our membership, we will continue to work to advance these essential changes. Moving Forward Steve Irwin “Knowledge is the only kind of wealth that multiplies when you give it away.”—Peter Schwartz, business executive, futurist, author and co-founder of the Global Business Network 4 REVERSE MORTGAGE / MAY-JUNE 2024
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AS WE COMMEMORATE Older Americans Month throughout May, I am reminded of my maternal grandparents. They are no longer with us, but in so many ways, they helped shape and guide my successes in life. When I was a child, they set a lot of good examples that I remembered and carried with me into adulthood. My grandfather was a career U.S. Navy man. Even after he retired, he was always awake at sunrise taking care of things that needed to be taken care of. The same can be said for my grandmother, who helped raise a couple of grandchildren and always put her family first. As I progressed in my professional career, I never lost sight of the work ethic I learned from my grandparents. I would take whatever job I was assigned and learn to do it the best that I could in every aspect so everyone—myself, my teammates and my company—succeeded. After I entered the mortgage business, I started as a processor and worked my way up to underwriter. Today, Board Room Playing Your Part in Our Industry’s Success By Carmalon Batiste Carmalon Batiste 6 REVERSE MORTGAGE / MAY-JUNE 2024
NATIONWIDE REVERSE MORTGAGE FIELD SERVICE EXPERTS FOR OVER 30 YEARS 1.800.639.2151 www.nfronline.com Inspections - Preservation - Insurance Loss Inspections - Violation Management - Vacant Property Registrations - Utility Management - REO Services - Special Services I am vice president of operations for one of the fastestgrowing companies in the reverse mortgage business, Traditional Mortgage Acceptance Corp. (TMAC). Knowing what my grandparents instilled in me, I’m happy to be part of an industry and profession that can improve the lives of so many of our older adults. We serve a noble purpose, and each of us should be proud of the role we play. Older generations were brought up with the life goal of owning a home and having that home paid off and owned free and clear. We provide an opportunity for people who worked hard their entire lives to use the wealth they accumulated over many decades of homeownership as a retirement tool to pay for daily living expenses, healthcare, end-of-life planning and so much more. Few programs exist that provide the financial means for allowing our parents and grandparents to age in place with dignity. We should be proud of all our successes. Yet there’s always room for improvement. We must go above and beyond to ensure our clients and their next of kin fully understand the mechanics and terms of their loan and their responsibilities for maintaining it after closing. We should strive to provide consistent messaging throughout the entire reverse mortgage process and recognize that not all of our clients are financially savvy. For example, we work with an appraisal management company (AMC) that takes a slightly different approach to working with reverse mortgage borrowers by using more easily understood terminology when explaining the appraisal process. AMCs don’t use the word “inspection,” which for some older adults sounds invasive. Instead, they explain that an appraiser is coming to look at the home and assign a value to the home for the reverse mortgage they’re trying to obtain. The public’s perception of reverse mortgages has not always been positive. The more we can do to make the reverse mortgage process a positive experience from that first touch point until the payoff of the loan, the more mainstream we can become. I am ready to play my part. How about you? Carmalon Batiste is vice president of operations for TMAC and a NRMLA board member. Board Room I would take whatever job I was assigned and learn to do it the best that I could in every aspect so everyone—myself, my teammates and my company—succeeded. REVERSE MORTGAGE /MAY-JUNE 2024 7
Hey, Members A Roundup of Issues and News for NRMLA Members By Darryl Hicks IN THIS ISSUE, we highlight important news from the first quarter of 2024, with links to more information. If you have questions about any of these topics, please feel free to contact me at dhicks@dworbell.com. • NRMLA, through its State and Local Issues Committee, sent a letter to New Jersey state Sen. Shirley K. Turner that addressed concerns over a bill she introduced (Senate Bill 2520) that would mandate in-person counseling and a seven-day “cooling off” period for reverse mortgages. (https://bit.ly/3sgHyYm) • NRMLA updated the HECM for Purchase Toolkits that members can share with real estate agents and homebuilders to include information on Interested Party Contributions and other changes published in the HECM section of Single-Family Handbook 4000.1. (https://bit.ly/3vL8TWG) • U.S. households increased their total debt by $271 billion during Q4 2023. As a result, households collectively owed $17.5 trillion to start 2024, according to Federal Reserve Bank of New York data analyzed by WalletHub. (https://bit.ly/3SCHVsk) • The Administration for Community Living published a final rule that makes the first substantive changes to Older Americans Act programs and services in 36 years. (https://bit.ly/4bGthZN) See related article Final Rule Updates Older Americans Act Regulations on page 30. • The Employee Benefit Research Institute estimates that couples with high Medicare prescription drug expenditures will need $413,000 to have a 90 percent chance of having enough money to cover future healthcare costs. (https://bit.ly/3UDdIvG) • If you enjoy keeping up with the latest policy discussions on retirement reform, the Brookings Institution held a symposium Jan. 24, 2024, that you can watch via YouTube. (https://bit.ly/3wbBEvU) • The U.S. Census Bureau reported that the U.S. population gained more than 1.6 million people in 2023, growing by 0.5 percent to 334,914,895. A majority of the population gains occurred in Southern states; the Northeast lost ground. (https://bit.ly/3StEfKh) • When compared with 47 countries, the U.S. retirement system ranked 22nd and received an overall C+ grade, according to the Mercer CFA Institute Global Pension Index 2023. The U.S. scored 63 out of 100, down from this past year’s 63.9 and just squeaking in above the 62.9 average of all countries. (https://bit.ly/3HsMzno) • The Pew Charitable Trusts revealed that state-sponsored retirement savings programs have collectively reached over $1 billion in assets as of November 2023, giving more than 800,000 workers who didn’t have access to an employer-sponsored retirement plan the option to save for their retirement. (https://bit.ly/3Sc1rvn) • The retirement planning landscape is getting a major face-lift in 2024 as provisions of 2022’s SECURE Act 2.0 kick in, bringing key changes intended to expand workers’ savings and incentivize employers to provide benefits. (https://bit.ly/3Sc7oIz) • A state-by-state analysis by GOBankingRates.com shows how long $1 million in retirement savings will last. A 65-year-old retiree in Hawaii can expect $1 million to last ten years, while that same amount will last almost 23 years in Mississippi. (https://bit.ly/48NhK9c) • To help address ongoing liquidity concerns, Ginnie Mae announced Jan. 16, 2024, that it’s exploring a new securitization option that would allow HECMs with balances above 98 percent of the Federal Housing Administration’s Maximum Claim Amount. (https://bit.ly/3ufEYFF) Darryl Hicks is NRMLA’s vice president of communications. 8 REVERSE MORTGAGE / MAY-JUNE 2024
NEIL SWEREN, CRMP, got his start in the mortgage business 35 years ago, originating private, conventional and government-insured mortgages. When he was offered the chance to learn about reverse mortgages, he refused, thinking they were a scam. Sweren was later approached by a family member who needed help understanding how they worked. Sweren reluctantly agreed to do some research and would soon learn that everything he thought he knew about reverse mortgages was completely wrong. He became a convert and has originated reverse mortgages almost exclusively since 2006. Today, Sweren is a senior vice president at Atlantic Coast Mortgage (ACM), headquartered in Fairfax, VA, where he helps manage the reverse mortgage division and continues to originate loans. He also serves on NRMLA’s HUD Issues Committee and in 2010 was one of the earliest adopters of the CRMP designation. Reverse Mortgage magazine sat down with Sweren to discuss his long and distinguished career and what makes him successful. Reverse Mortgage: How did you get started in reverse mortgages? Neil Sweren: One of my networking groups had a long-term care agent who approached me one day and said, “Neil, we’d like to work for you and do reverse mortgages,” and I said, “We’re not doing reverse mortgages. They’re terrible.” And she said, “Well, you don’t know anything about them.” I turned her away, and that was the end of that. She went to work for one of my competitors down the street. A few months later, my sister-in-law called me and said her parents in Florida wanted to do a reverse mortgage and could I help her understand it. I tried to talk her out of it, and she said, “Well, I’m pretty sure they’re going to do it. I need your help.” I did the research, and when I dug a little deeper, what I discovered was that there wasn’t another loan product that would or could help her parents out of the situation they were in. They had suffered some stock market losses and had an adjustable-rate loan that had increased to an unaffordable level. The only way for them to be able to afford to stay in their condo was to do a reverse mortgage. They went ahead and got one, and not long after they did the reverse mortgage, her father passed away. The only reason her mother could stay in her condo was because they had done the reverse mortgage. Neil Sweren, CRMP, Senior Vice President, Atlantic Coast Mortgage By Darryl Hicks Neil Sweren From the Top continued on page 10 From the Top REVERSE MORTGAGE /MAY-JUNE 2024 9
From the Top The LTC agent came back to me a while later complaining about the guy she was working for and begging me to let her and her partner come work with us. She promised, “I’ll teach you how to do reverse mortgages.” That was the beginning of my journey, and I’ve never looked back. RM: What motivated you to obtain the CRMP, and how have you benefited from it all these years? NS: I wanted to set myself apart. When it first came out, I already met the qualifications, and what did I have to lose from some extra continuing education (CE)? Any licensed attorney can handle a bankruptcy, a divorce or an estate case, but should they? Are they an expert in those particular fields? You want to set yourself apart as an expert in something, and the CRMP certification was a way for me to set myself apart as someone who is dedicated to the reverse mortgage space, who knows it, understands it. Not just someone who can do reverse mortgages, but someone who does them as a regular part of his business. RM: How do you utilize it? NS: My clients sometimes ask me, “Why should I use you?” Usually, my answer goes like this, “Listen, I’m not someone sitting in a call center who started doing this yesterday. I’ve been doing reverse mortgages for years. I’m an expert in this field and am part of a small group of people who are certified.” That’s the value. I also think people find me occasionally on the NRMLA consumer website as being certified, and that also provides value. I can’t quantify it. I don’t know how many times that happens. But it has taught me that a lot of times people are doing background checks on you before they decide to do business. I’ve seen my LinkedIn profile sitting on the kitchen counter. I want to stack the deck in my favor in any way possible. RM: Tell us about Atlantic Coast Mortgage and what distinguishes it from other mortgage lenders. NS: I think the culture at ACM is different than a lot of other places. Our forward loan officers are an amazing team of top industry producers who are helpful to each other and supportive of what we do in reverse. Our leadership team is generally very accessible, and great guys. The mortgage business in general has a history of being a sort of “good old boys” network, but at ACM, our top producers every year, maybe 90 percent of them, are women. The company is also supportive of reverse mortgages. Reverse mortgage professionals who work in shops that primarily do forward mortgages often say that they feel like redheaded stepchildren. Sure, we have a much smaller team, but I’ve never felt like an “other” here. RM: How many people are part of the reverse mortgage team? NS: The company overall has about 175 loan officers. Our reverse mortgage team has six right now, and we are looking to grow. We’re able to close reverse mortgages in 28 states with licenses pending in a few more. That gives us a pretty good footprint. RM: You’re an active member of the HUD Issues Committee, which spent a great deal of time this past fall reviewing the HECM Handbook. What new policies in the HECM Handbook are you most excited about? NS: I’m a purchase guy, so the improvements there piqued my interest. Interested party contributions are going to be super helpful. Prohibited seller concessions have always been a hurdle for us, particularly with new construction, because it meant many of our buyers were leaving money on the table or the builders in some cases just refused to modify their contracts. Now, we have a method for calculating concessions and moving forward with the transaction. It’s a huge step in the right direction. It’s going to take a lot off our plates not having to explain, amend and rewrite contracts. From a contractual standpoint, HECM loans work pretty much just like a traditional forward mortgage. RM: Do you think allowing for seller concessions will help increase HECM for Purchase (H4P) volume? NS: I am hopeful. Anything we can do to make the reverse seem more “normal” to agents, builders and sellers should help us increase volume. Time will tell. RM: Are there particular approaches to marketing and lead generation that you try to instill in your sales team? NS: We don’t buy leads or do TV commercials. We’re all doing our own thing to generate business, and my team is pretty good at it. We don’t have to do a lot of coaching. A lot of my business comes from referrals. From the Top continued from page 9 10 REVERSE MORTGAGE / MAY-JUNE 2024
From the Top I teach CE classes to real estate agents, who I think are probably some of the best potential clients for this product. They often own nice homes but don’t have pensions, so as they get older, they’re looking for a way to make things work down the road for themselves. The agents who come to my CE classes aren’t generally looking for ways to sell more houses using reverse mortgages. Very often, they just want to learn about reverse mortgages for themselves or a close family member. The hardest part of the business right now is dealing with lower principal limits. It seems like everyone comes in thinking they can borrow 50 percent of the property value. That’s probably our fault; we’ve been saying that for years. We’re closer to 30 to 35 percent, so a lot of them can’t get enough money to pay off their existing debt. The upfront two percent mortgage insurance premium is also a tougher pill to swallow for many when it represents closer to six percent of the loan amount. This is a cyclical business; it will come back. Whether it’s on the forward side or the reverse side, it’s a constant challenge dealing with market cycles. Keeping your head in the game is the biggest challenge for many. RM: Your company does a lot of social impact work. What can you tell me about Project GiveBack? NS: Many of us at Atlantic Coast Mortgage have outside volunteer projects that we work on. During COVID-19, I read an article about a guy in Florida who paid off 114 delinquent utility bills for people in his community for $7,600. That’s a huge impact for a relatively small amount of money. My business partner, Scott, and I reached out to our local utility who put us in touch with The Fuel Fund, and we started a campaign. We contributed some of our own money, and I went to our CEO and asked him if he would be willing to help out. He said, “I’ll tell you what. I’ll match what you can raise in addition to what you guys are putting in.” It was like OK, game on. I love that. We went out and raised a lot more money. The total figure was something like $15,000 total, and we got to choose which ZIP codes the money went to. It had a huge impact on the community; we even made the local news. RM: What are the biggest challenges you’ve encountered managing a reverse mortgage division, and how have you overcome them? NS: For me, the challenges of managing or originating in the reverse mortgage space haven’t changed much. Sometimes they look a little different, but the challenges have been the same. I’ve been originating mortgages since 1989. Economic cycles present challenges. Product changes and guideline changes present problems. It’s just more of the same to me. There will be years when we do well and other years when it’s a little slow, and you have to be able to get through those years. Some people come into the business when it’s great, and they leave as soon as it gets challenging. Some of us stick around and dig a little deeper during those leaner years to keep things going so that when the market does turn, we’re in the right position to take advantage. Whatever challenges we face pale in comparison to what our clients face. If you ask me how business is going, I’m one of those guys who always says, “Unbelievable!” I feel blessed to be in this business and have the opportunity to do what I do. Some of our clients have high six- and seven-figure investment accounts and are struggling. It’s a long story, but I have a client who recently lost her husband. He had some tax issues, and when he died, the Internal Revenue Service took all of the couple’s savings. She found herself in a position where she didn’t know how she was going to pay her bills. The reverse mortgage helped her back on her feet. In the email she sent to me after we closed, she said, “Neil, I haven’t slept in months. I didn’t know what my future looked like. And now I feel like I’m at peace. I feel better about myself. I know that I’m in a good place now.” A reverse mortgage can be, and often is, life-changing for our borrowers. To me, that’s what it’s all about. Darryl Hicks is NRMLA’s vice president of communications. “This is a cyclical business; it will come back. Whether it’s on the forward side or the reverse side, it’s a constant challenge dealing with market cycles. Keeping your head in the game is the biggest challenge for many.” REVERSE MORTGAGE /MAY-JUNE 2024 11
FERNANDE MARIE BENCZE credits her diverse experiences in life and work for the skills she uses daily as a reverse mortgage professional. Consider her time as a young U.S. Army officer. After a childhood moving around as her father pursued a career in the automotive industry, she was offered a swimming scholarship to the U.S. Military Academy at West Point. After graduation, she served as an ordnance officer, responsible for the maintenance of her brigade’s equipment. In Germany, she began as a platoon leader, “a 23-year-old kid, working with 40-year-old guys who have been in the military for 15 or 20 years.” “It was a learning experience,” Bencze says. “You had to figure out your leadership skills. As a woman, especially, the best way to lead those folks was to listen to them, consider all of their experience and then educate them on how to do things differently or how to stay organized.” Out of the Army after five years, she went to Prudential, enjoying her work in sales and educating potential clients on how insurance and annuities could serve their needs. Later stints in automotive finance introduced her to credit reports and short-term loans. She was underwriting commercial real estate for Wells Fargo when a friend’s father was forced into caring for his bedridden wife. She thought a reverse mortgage might help pay for home care. As she learned more, she became intrigued by the possibilities and the clientele. “I like old people,” Bencze says. “They’re kinder, gentler. They’re willing to have a conversation with you. They’re willing to share their story. I just adore making a difference for them.” She enjoys empowering them to truly enjoy their retirement years. “It’s gratifying coming in and giving them the funds necessary to accomplish goals,” she says. Bencze started in reverse mortgages by notarizing loan documents and then processing them. Around 2006, she began originating loans. Her appreciation of working in broker environments, with their choice of lenders, led her to Alliance Reverse Mortgage. “If you have a client with a unique property, typically there’s a lender who’s a unique match,” she says. Her typical client is a 73-year-old woman who realizes she does not have the means to live the rest of her life as she had hoped. “People spend decades working and saving, and they are either forced to retire earlier than they want, or they get to that retirement goalpost and realize how expensive a gallon of gas is,” she says. “They think, ‘I can’t afford to go to lunch with my friends.’ They have beautiful homes. They’ve had them for decades. They’ve been frugal. They’ve done everything right. It’s just that the world moved on and inflation happened. They have big health insurance bills. Medicare is not cheap.” In recent years, Bencze has helped avert foreclosures for four clients. She calls them “stomach-churning, Pepto Bismol-gulping loans.” These are clients whose hard From West Point to Reverse Mortgages A Chat With Fernande Marie Bencze, CRMP, Alliance Reverse Mortgage By M. Diane McCormick CRMP: Across the Kitchen Table Fernande Marie Bencze 12 REVERSE MORTGAGE / MAY-JUNE 2024
choices—perhaps paying for a spouse’s cancer care instead of the mortgage—are catching up with them. For those clients, a reverse mortgage is “a gamechanger.” “To see the relief on their faces is amazing,” Bencze says. “Their shoulders aren’t hunched up around their ears anymore. I’ve had people cry at the loan document signing table because they were so relieved. Those are the kinds of clients I adore. The work is gutwrenching, but I love them.” It is great when their adult children get involved, she says. “If you trust your family members, by all means, get them involved because at some point in the future, they’re going to be calling me, and I’m going to say, ‘Remember when we talked about this?’” she says. “It won’t be a surprise. They’ll understand that they have the decision-making ability to deal with the house.” All of her business comes from referrals, through a network of financial planning professionals and attorneys she has built over the years who share her high ethical standards. “I treasure honesty, and I treasure doing the right thing for the borrower,” she says. To Bencze, the fields of wealth advisers, certified public accountants and elder law attorneys are ripe for education about the difference reverse mortgages can make for their clients. “The way you educate them is to tell a story,” she says. “Without sharing any confidential information, you tell a story of how the loan has helped the client. Now, instead of hearing this dry drivel about numbers and the process, you put it in the back of their mind to remember when they have a client in a similar situation.” She feels fortunate to be on the Alliance team, working with six other loan officers and two processors. Alliance works extensively with member-owned credit unions, which demonstrate “how to treat their members like gold” and how to prioritize the search for solutions over chasing profits. “Everything the credit unions do is to benefit their members,” Bencze says. “They have taught us to think outside the box. What can we do to help this person?” She earned her CRMP in 2016 for the opportunity to establish herself as an expert. While anyone with a California real estate license and National Mortgage Licensing System number can sell reverse mortgages and forward mortgages, it takes a specialist to properly apply and leverage the reverse mortgage for the client’s benefit. “I’ve done only reverse mortgages for the last 18 years,” Bencze says. “I’ve bought a house or two. That’s all I know about forward mortgages.” The CRMP tells the reverse mortgage community that its holder “truly is investing in the borrowers and in making certain that NRMLA’s 12 guidelines are followed, and that people are treated respectfully and ethically,” she says. “To me, it’s important that when people see that CRMP after my name, they understand that I’ve gone above and beyond.” A California resident for 30 years, Bencze recently relocated to the Lake Tahoe area. She and her husband— the parents of “three great kids”—have been empty nesters for about two years. They are learning again to “be individuals, not parents,” using their free time for adventures and travel. “We’re going to Las Vegas to see the Rolling Stones in concert,” she says. However, they might not classify as empty nesters if their four dogs are counted—two dachshunds, ages one and five; a five-year-old from the animal shelter; and a 14-year-old inherited from a client. In her professional role, she wants the public to understand that reverse mortgages are something to learn about and not fear. “It’s a wonderful, empowering product,” Bencze says. “As our country’s population ages, it’s going to be a way to care for people. There’s not going to be enough assisted living or memory care communities. The reverse mortgage is the way to help our [older adults] thrive and stay in their homes with their families.” She knows she has helped hundreds of people, including many who didn’t get a reverse mortgage. When someone comes to her with a problem, she takes a viewpoint of, “What options do you have?” “People feel backed into a corner, and it is so gratifying to provide them choices,” Bencze says. “Sometimes, the choice is doing nothing. Sometimes, the choice is selling your house and relocating, or the choice is taking in a roommate. Sometimes, the choice is getting a reverse mortgage. But still, they have four options now, whereas before they had no choice. They were being pushed in one direction. I think I’ve helped a lot of people that way.” M. Diane McCormick is a writer and editor based in York, PA. CRMP: Across the Kitchen Table REVERSE MORTGAGE /MAY-JUNE 2024 13
REALTORS LOAN OFFICERS 16 REVERSE MORTGAGE / MAY-JUNE 2024
HECM FOR PURCHASE BUILDS MOMENTUM New Rules Help Stakeholders Enhance Their Businesses By Joel Berg WHEN THE HECM for Purchase made its debut in 2009, Alison Calamia was among the skeptics. As a longtime reverse lender in the greater New Orleans area, Calamia wondered whether the product would appeal to people, particularly in Southern states, such as Louisiana, where older homeowners did not move very often. But after taking a job as an account executive for a national company, she worked with brokers in other states where the HECM for Purchase was making HECM for Purchase continued on page 18 Alison Calamia REVERSE MORTGAGE /MAY-JUNE 2024 17
inroads. “It was a great opportunity for me to see it in action,” Calamia says. When she returned to originating reverse loans, she was glad to offer the HECM for Purchase as an option for her clients. “When we do have people who decide to downsize or relocate closer to family or a better neighborhood, the HECM for Purchase is a great, great product,” says Calamia, who is now a CRMP and assistant vice president for America’s Mortgage Resource Inc., a direct lender based in Metairie, LA. And the product is getting even better, according to Calamia and other reverse mortgage executives. In the fall of 2023, the Federal Housing Administration (FHA) unveiled new regulations designed to align the HECM for Purchase more closely with forward mortgages, essentially by allowing greater financial flexibility. In short, buyers using a HECM for Purchase can now take greater advantage of seller concessions designed to reduce closing costs. “The industry has been advocating since the product’s inception for changes that would make the HECM for Purchase more like a traditional purchase transaction,” says Elly Johnson, president of consulting firm All Reverse Pro LLC. “Now that the guidelines are more closely aligned with the forward side of the business, I hope that more realtors, builders and sellers will become better educated on the use of this product, and we will see more HECM for Purchase loans originated this year.” Spreading the Word The HECM for Purchase has made up a small slice of the reverse market over the past 15 years. Nationally, the product has never accounted for more than ten percent of all HECM transactions, and it made up about five percent of the total in fiscal year 2023, according to FHA’s annual report to Congress. But even before the HECM for Purchase was introduced, borrowers were approximating its look through regular HECMs, Calamia says. Homeowners, for example, would take a cash-out reverse mortgage on their home, buy a new house and then sell the house on which they had the reverse. “There were just so many transactions,” she says, noting that the flurry of transactions drove up the cost. Today, Calamia estimates that about two percent of her HECM loans are for purchases, a share that has held steady for years. “We don’t have a lot of people that leave their homes,” she says. America’s Mortgage Resource does forward and reverse loans, and Calamia says she often wondered why the HECM for Purchase carried restrictions that forward loans did not. “It just never made sense to me,” she says. Now that the rules are coming into better alignment, Calamia is optimistic about the potential for the HECM for Purchase. “I do see a huge opportunity there,” she says. Proposed in 2023, the changes allow borrowers to accept up to six percent of a property’s sales price from an interested party, such as a seller, builder, developer or real estate agent. The six percent contribution can be a payment that goes toward a buyer’s origination fees and related closing costs. It is the first time FHA has allowed the use of incentives in the HECM program to reduce closing costs for buyers, according to NRMLA. Calamia plans to reach out to her contacts in real estate and financial planning to alert them to the changes. “The realtors are going to see the buyer first in most cases, not me,” she says. “The realtors are in a position to identify seniors who are looking to buy a house and ask, ‘Have you thought about it? Here’s an opportunity.’” She also sees referrals coming from financial planners, who can help explain the advantages of the product. “The greatest thing about the HECM for Purchase is showing HECM for Purchase continued from page 17 “When we do have people who decide to downsize or relocate closer to family or a better neighborhood, the HECM for Purchase is a great, great product,” —Alison Calamia, CRMP, and assistant vice president at America’s Mortgage Resource Inc. Elly Johnson 18 REVERSE MORTGAGE / MAY-JUNE 2024
borrowers the ability to get what they want without being strapped with a monthly mortgage payment,” she says. In addition, Calamia is looking forward to discussing the newly revised HECM for Purchase in the continuing education classes she has taught for the past five years for the New Orleans Metropolitan Association of Realtors. “When this class is offered up, it is standing room only,” she says. Laying Down the Numbers Education is not just for financial advisers and real estate professionals. Borrowers also need to learn about the HECM for Purchase, just as they do with traditional HECMs. “It is almost as if we need a ‘reset’ or ‘rebranding’ of the product, now that the guidelines have been enhanced to benefit more of our aging population,” Johnson says. “We are seeing many lenders begin to offer training and specific materials geared toward the product, hoping to see this product finally get the recognition it deserves.” But unlike a traditional HECM, where people are staying in their homes, purchase borrowers often must overcome the emotional attachment they may feel to the environment they have lived in for decades. “But once you lay down the numbers and do a side by side, borrowers typically end up saying, ‘I get it,’” Calamia says. “And when they’re working with financial HECM for Purchase continued on page 20 Partnership you can trust. Dedicated to never competing with you - your success is our success. Ready to experience the difference? Visit Celink.com Deep Industry Experience 96% Borrower Satisfaction Rating Independence and Alignment with Clients Robust Specialized Technology Reverse Mortgage Is Our Core Competency © Celink. All rights reserved. NMLS #3020 - http://nmlsconsumeraccess.org. Compu-Link Corporation dba Celink (WA license# CL3020 and 603 018 607) “We are seeing many lenders begin to offer training and specific materials geared toward the product, hoping to see this product finally get the recognition it deserves.” —Elly Johnson, president of All Reverse Pro LLC REVERSE MORTGAGE /MAY-JUNE 2024 19
advisers, they get it right away and they say, ‘OK, yes. This is a win-win.’” Calamia recently worked with a borrower who was deciding between a forward mortgage and paying cash for a new, smaller home. The borrower, who had been referred by a real estate agent, then took a look at a HECM for Purchase and realized she could keep more of her cash in retirement savings. At the newly established reverse division of CrossCountry Mortgage LLC, forward loan officers are an avenue for growing the HECM for Purchase, according to Kelly J. McCabe, vice president and director of credit for the division. She joined CrossCountry in 2023 to help build the reverse business. “They’ve made a huge commitment because they see that there’s so much potential,” McCabe says. Some of the initial steps for Cleveland, OH-based CrossCountry included certification of some of the forward loan officers and offering specialized loan officer assistants (LOAs). LOAs are trained and specialized HECM loan officers who partner with forward loan officers and assist them throughout the entire loan. “It’s all about educating forward loan officers and helping them better understand this product is a viable option,” says McCabe. “The recent FHA revisions should make the product more appealing.” The company has more than 4,000 loan officers across the U.S. who could be offering HECMs for Purchase to new and existing clients. Favorable Trends While the new rules likely will offer a boost, the HECM for Purchase is expected to benefit from the same trends as the traditional HECM. One is the lack of retirement savings faced by many older adults, who nonetheless may be sitting on significant home equity. They can use a HECM for Purchase to move and downsize without having to add a mortgage payment—but also to cash out their equity for retirement. “This isn’t your first-time homebuyer with three percent down, a gift of equity or doing a first-time FHA loan,” McCabe says. “This is a borrower who understands the process.” Older homeowners are also more mobile. As in past generations, they often move to the Southern states for warmer weather. But after a few years, they may look to move back to be closer to grandchildren and other family members, particularly since the disruptions of the COVID-19 pandemic, industry executives say. Thanks to the proliferation of age-restricted communities, older adults have a growing range of attractive HECM for Purchase continued from page 19 Kelly J. McCabe 20 REVERSE MORTGAGE / MAY-JUNE 2024
housing options. “Shea, Pulte, Lennar, all of the builders have these amazing developments that offer a better quality of life,” McCabe says. The new flexibility in the HECM for Purchase means those builders can now offer up to six percent of the sales price in closing-cost credits to buyers using the product, she adds. “This new flexibility is going to make people understand that the purchase option is here to stay. Loan officers and new-home consultants should make the HECM for Purchase a product offering as a mainstream purchase option.” Declining interest rates are another factor that could play into the growth of the HECM for Purchase, executives say. Higher rates deterred people from moving and created a shortage of housing supply, depressing home sales. But with rates expected to drop over 2024, lenders are optimistic that activity will pick up. “We’re coming out of one of the toughest times in the reverse industry,” McCabe says. Nonetheless, she is confident in the approach being taken at CrossCountry. “A year from now, we want to be able to say we are one of the top purchase lenders.” Executives also see continued room for regulatory improvement. Calamia notes that rules still require sellers to complete all home repairs in a transaction involving a HECM for Purchase. “We got a win with everything else, except that,” she says. “I’ll take it, but I don’t want to leave that one alone. Keep fighting for that.” Joel Berg is a writer and editor based in York, PA. “This isn’t your first-time homebuyer with three percent down, a gift of equity or doing a first-time FHA loan. This is a borrower who understands the process.” —Kelly J. McCabe, vice president and director of credit at CrossCountry Mortgage LLC DISRUPTING BUSINESS-AS-USUAL SERVICES Preservation Inspection Title and Diligence Property Maintenance Property Management & Tenant Services Appraisal and BPO REO Asset Management Vacant Property Registration & Utility Processing guardianassetmgt.com REVERSE MORTGAGE /MAY-JUNE 2024 21
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