Mike Kent was recently elected to a fourth term as co-chairman of the National Reverse Mortgage Lenders Association (NRMLA).
He takes the role seriously. Along with his co-chair, Scott Norman of Finance of America Reverse, Kent has played a key part shaping NRMLA’s advocacy efforts during one of the most challenging periods in the history of the HECM program.
Kent became president of Liberty Reverse Mortgage in April 2015. Before that, he spent four years at Reverse Mortgage Solutions Inc. (RMS) as president of loan originations. In addition to his reverse background, he has over 30 years of forward mortgage experience, and he has held leadership roles across various lending functions, including sales, operations and secondary markets.
Reverse Mortgage sat down with Kent to get a better understanding of what it’s like to serve as co-chair of NRMLA, what his priorities for the association will be in 2023, and where he sees the marketplace headed.
Reverse Mortgage: The theme for the March/April issue is sales and marketing. As someone who has been in the mortgage business for 30-plus years and guided Liberty Reverse Mortgage through other challenging periods, what advice would you give to our readers to help them succeed in 2023?
Mike Kent: Regardless of changes to interest rates and macroeconomics, the demographic we serve hasn’t changed. We still have 12,000 people turning 65 every day. We still have roughly 26 million households headed by someone who is 62 years of age, and slightly over half of those households have no mortgage debt. Even in a rising rate environment, which effectively lowers PLFs (principal limit factors), there’s still a significant amount of equity that can be tapped into through a reverse mortgage. Originators need to keep in mind that there’s still a huge market out there that’s untapped. We might have taken a little bit of a break during the last two years because of the unprecedented level of refinancing, but now is the time to get back to the basics of acquiring new reverse mortgage customers, showing them the benefits of reverse mortgages and creating better retirement outcomes. It would be helpful for loan officers to focus on building those relationships with attorneys and financial planners—and maybe small commercial banks and credit unions—to get our product top of mind for them as they work with their customers. I still believe that the best days for reverse mortgages lie in front of us.
RM: What’s involved being co-chair of NRMLA?
MK: One of the best things to have come out of my service to the association has been the friendship that Scott and I have developed over these last several years and coming to understand what a good, decent human being he is, and the tireless work he does on the political side ensuring the right folks in Congress understand and support our products. The other plus of being co-chair is the interaction with the NRMLA staff. From NRMLA President Steve Irwin to you and others, it’s an incredibly dedicated group of people who come to work every day, roll their sleeves up and get to it. The other added value for me is getting to know NRMLA CEO and Ffounder Peter Bell, who has a very deep well of knowledge, not just about reverse mortgages, but the inner workings of Washington and how we need to navigate the political front and the agency front advocating for our products and our customers. And then, finally, it has been rewarding to get to know so many people and so many members. Whether it’s someone on the board of directors or a member of the association, I try to make a handful of calls every week to check in with NRMLA members and see how things are going. That’s a really important part of staying closely connected and grounded with the membership. I’m honored and humbled to have been elected to a fourth term as co-chair. It’s a lot of work. Scott and I probably dedicate somewhere between four to five hours a week, sometimes more, in the pursuit of it. When I look back over my career, it’s one of the absolute highlights of my entire career, whether it be in forward or reverse lending.
RM: What are your top priorities for NRMLA in 2023?
MK: One of the top priorities for our industry—-let’s start there—-is to find ways to expand our distribution reach. We need more well-trained people out there offering reverse mortgages. NRMLA contributes to that, but I don’t think that’s NRMLA’s mission. NRMLA’s mission is to serve its membership by ensuring that we have a sustainable product to offer the marketplace. We do that by working with the regulatory agencies, with the legislative branch, and with the administration to ensure that we have ample support. NRMLA does a rock-solid job at that. NRMLA also fills an educational role for people who are currently in the business and want to learn more, and for people who are new and want to learn from the beginning. For 2023, we’ve put together a package of program improvements that we think will benefit the entire industry and the seniors we serve. One of our very top priorities should be to get that bundle of proposals into HUD and start working the process of getting, if not all, at least the majority of these ideas adopted and put into place.
RM: When the board of directors met in November to start thinking about the new year, you briefly mentioned that you’d like to see a future leaders group formed. What do you envision?
MK: We need to bring new voices and new ideas to leadership roles on our committees and ultimately to the board of directors and the executive committee. This needs to happen not just within NRMLA, but also within our own companies. Many companies have embraced policies around DEI (diversity, equity and inclusion). That’s a great way to bring new voices into the fold and prepare them for leadership positions. I’d like to see the association formalize a future leaders program similar to what they’ve done at the Mortgage Bankers Association that prepares people from an educational perspective and a thought perspective to take on leadership roles not only within the association, but also within their companies. And I think that NRMLA can play a fairly important role in that.
RM: I’d like you to touch on the relationships that NRMLA has developed with FHA, CFPB, and Congress and how they have evolved since you started serving on the board of directors.
MK: NRMLA has always enjoyed good relationships with the various administrations, regulatory agencies and other stakeholders. But what has changed over the last five or so years is that agencies that we used to go to with ideas—CFPB, FHA/HUD—are now coming to us and asking, ‘What do you think?’ We meet regularly with the senior leadership at Ginnie Mae and they’ll ask, ‘What’s the market look like to you? This is what it looks like to us.’The level of engagement and collaboration has really ratcheted up. When I sit in those meetings, I definitely get a real sense of partnership. I think we’ve proven to the CFPB, FHA and Ginnie Mae that we are honest brokers of ideas that can help the HECM program, help our seniors and help the agencies better implement and regulate it. They don’t see us as just representing a constituency anymore. They see us as something bigger, and that’s a very, very good place to be. We’ve proven ourselves time and time again that we’re a source of honest information. One of the things we do well is that, when we go to FHA or other regulator, we go with the facts. We’ve done analysis. It’s not just what we think, and we what feel, but we back it up with data. If we go to them and give them an idea, give them the facts, support it with data and then show them why they can do it and how they can implement it, you’ve built a great relationship. You’ve taken a load off their plate.
RM: Everybody is hoping the Federal Reserve stops raising rates soon. If we see rates stabilize in 2023, do you see that having an immediate positive impact on the reverse mortgage marketplace?
MK: I believe there have been enough rate hikes that now need some time to work their way through the economy. It generally takes somewhere around six months for a rate hike or decrease to work its way through the economy. We’ve had four, so I think we need to give it some time to see how it works. I think it’s going to have its desired effect. If the Fed signaled that it was going to pause or stop raising rates, it could have an immediate effect on our industry and allow us to provide more proceeds to the borrower. FHA increasing the 2023 maximum claim amount to $1,089,300—an increase of $118,500 from 2022—will give a little boost to the industry, too. We have to get out of our head that ‘oh, things are terrible. My borrower could have gotten so much more money last year.’ OK. But last year was last year, and your borrower didn’t get any money last year because they didn’t get a reverse mortgage. Today, we have 26 million households who can qualify for a reverse mortgage. That should be the center of our thought process. If we spend our time figuring out how to access these households, we could still have a pretty