Paul Francom may never have become a reverse mortgage executive and advocate had it not been for his grandmother. While in high school, and later college, Francom worked for his father, a branch manager for Republic Mortgage.
In 2004, Paul’s grandmother applied for a reverse mortgage to cover basic living expenses after her husband passed away. Republic did not offer reverse mortgages at the time, but Paul and his dad immersed themselves in the regulations and learned as much as they could.
The positive impact that the reverse mortgage had on Paul’s grandmother left an indelible mark that inspired him to enter the reverse mortgage business full-time. Republic mortgage was soon offering reverse mortgages and within two years Paul was managing that part of the business.
Today, Paul oversees reverse mortgage operations for Academy Mortgage, one of the largest independently-owned mortgage companies in America, which last year ranked 31st in the country for HECM originations.
Reverse Mortgage magazine sat down with Francom to discuss his approach to managing a reverse mortgage division and building success.
Reverse Mortgage: How did you get your start in reverse mortgages?
Paul Francom: I have dabbled in the mortgage industry since I was a teenager. When I was 14 years old, I worked in the mail room for my dad’s branch office during summers and holidays. My father was a branch manager for Republic Mortgage, but I had uncles and other family members working in the mortgage business too, so it’s in the blood. In late 2003 and early 2004, my grandma started looking into getting a reverse mortgage. This was new to us. My dad’s business focused on FHA streamline refinances, so nobody really knew anything about reverse mortgages. He flew up to Washington and took some classes from Seattle Mortgage Corporation and he brought back a binder full of study material. I was studying engineering and I saw this material and was captivated. I love the mechanics of the reverse mortgage. I read the HUD Handbook 4235.1 and all the mortgagee letters. I soon decided to go full-time into reverse with my dad. I love how the reverse mortgage fits into an overall financial plan for our clients and how it improves their quality of life.
RM: Tell us about Academy Mortgage and what distinguishes it from other lenders.
PF: Academy Mortgage was founded in 1988 by Dwayne Shaw. In 2015, Academy acquired Republic Mortgage, which is how I came to work here. Academy has a threefold vision that I love—inspire hope, deliver dreams and build prosperity. We inspire hope through the social impact programs that we offer in our communities and worldwide. Homeownership is a huge dream for many Americans to have a safe, stable, comfortable place to live in. Building prosperity is not just for Academy employees. Of course, we want a job to sustain our families, but we want prosperity for our clients too. Homeownership is a fantastic way to generate wealth. Academy is headquartered in Draper, UT. We have 2,000 employees and 200 branches in 49 states and the District of Columbia. We’re a top 25 lender and rated number one on Zillow, but what’s more impressive is that we served over 54,000 families last year. We have eight employees who originate reverse mortgages exclusively.
RM: Do you allow your forward mortgage salespeople to originate reverse mortgages, or is there a firewall that separates the two?
PF: Our forward mortgage loan officers have two options. They can refer a borrower to one of our full-time reverse mortgage specialists. I like this option because it allows the forward mortgage team to focus on their bread and product. It’s hard to specialize in multiple products, especially when they have different guidelines and sales cycles. The referring loan officer can hand over a name and a phone number and get paid a commission if the loan closes. The second option is a certification. If a loan officer wants to add reverse mortgages to his or her business plan, we require four things: 1) Read Dan Hultquist’s book, Understanding Reverse; 2) Complete five one-on-one training classes; 3) Continue taking education classes offered by Academy and our investors; and 4) Close a certain number of loans each year. If you’re only closing one reverse mortgage a year, there’s no way you can become an expert.
RM: Your company does a lot of social impact work here and abroad. What can you tell me about that?
PF: We try to be good stewards of our community and serve those around us. This gets back to inspiring hope, not just in on ourselves, but in others. Let’s talk globally. Recently, our team members took time off and paid their way to Verde Sumaco, a small village deep in the heart of the Ecuadorian Amazon, to build concrete pathways. Being in the Amazon jungle, it’s so wet and without these concrete pathways, you have to wear rubber boots all day, which is not ideal. These pathways improve the quality of life. It’s something small, but it’s having a huge impact on people’s lives. Academy operates an internal website where you can go and see what people are doing in their own communities across America. In Grand Junction, CO, for example, team members are facilitating dog adoptions and supporting and gathering supplies for dogs in need. We have read-a-thons and walk-a-thons to support St. Jude’s Children’s Hospital. One of my favorite activities is food prep. We bring in many pallets of food. We put on our food prep gear – hair nets, masks and gloves – and make these packets that have just the right nutrient profile for those in need. We have 200 branches and every branch participates.
RM: Academy had a pretty decent year in 2022 with production increasing 45 percent from 2021. To what do you attribute that growth and how will you build on that success in 2023?
PF: 2022 was a banner year. Like most companies, we benefited from high home values and low interest rates. How do we build on that success? We don’t reinvent the wheel and we get back to basics. Last year was so easy in terms of qualifying borrowers that we didn’t focus on the basics. People are now scared of interest rates and the possibility that home values will drop and that there might be a recession. People see this negative news, stop what they’re doing and burrow into their holes and stop working. How is not visiting your referral partners going to help? How is not talking to potential clients going to help? It won’t. Visiting referral partners, teaching CE classes, talking to financial planners – in other words, getting out there and doing the work—is crucial. There’s always going to be a need. There’s always going to be a benefit. There’s always going to be a demand for reverse mortgages. I was talking with a loan officer recently, who said she likes this market, because so many of her competitors are sitting on the sidelines. She’s having more success today than she’s ever had.
RM: Are there particular approaches to marketing and lead generation that you try to instill in your salesforce?
PF: I wrote down five things. One, become an expert. Our clients and referral partners want to trust us. When we know what we’re talking about our clients can feel it and sense it and it makes it easier to build trust. When you make up answers and fake what you know, people can sense it and it turns them off. It does a disservice to the entire reverse community. So, study, study, study. Two, focus on respect. Nobody likes it when you’re talking with somebody and they discount your experience. Don’t do that to our referral partners, or especially our clients. The community that we serve has so much experience and we need to respect that. Three, be a good listener. Do you care about your client as a person, or do you see them as a dollar figure? Be a good listener and show that you truly are concerned about them and that they are valued. Four, expect questions. The public is more familiar with traditional mortgages. Reverse mortgages can be complicated. Not everybody has a finance degree, so it’s important to expect questions. If someone isn’t asking questions, then probe and make sure they truly understand the reverse mortgage. Make sure to show grace and respect when responding to questions. Lastly, open your mouth. Make sure everybody in your sphere of influence knows that you offer reverse mortgages and how fantastic they are for the right people.
RM: What are the biggest challenges you’ve encountered managing a reverse mortgage division and how have you overcome them?
PF: Knowledge is a big one. Reverse mortgages are a different animal with different guidelines. Instilling knowledge is a challenge. Someone can take our certification program, but there will still be knowledge gaps, whether it’s with Life Expectancy Set-Asides or Collateral Risk Assessment. The only way to overcome this challenge is to continuously offer CE classes and to talk through these issues with our teams. Another challenge is overcoming the negative stigma that reverse mortgages still have. People buy into the negative news and the extreme situations when a grandmother was foreclosed on and she’s out of her home because of a reverse mortgage. I don’t want to minimize hardships for the people who have experienced them, but that’s not why we’re lending. We want reverse mortgages to be a sustainable solution. To overcome the negative and unfair beliefs, we focus on the positives, like how a reverse mortgage can improve a person’s quality of life or extend the life of his or her assets and investments. The last challenge is marketing. This year, people are pinching pennies. Maybe we need to learn new marketing strategies that involve Facebook and LinkedIn or going directly to referral partners and building those relationships.
RM: What are your professional goals for 2023?
PF: I want to help more new people get a reverse mortgage, so my first goal is to increase production and build momentum. I want to continue to increase my reverse mortgage knowledge. Who knows, maybe the HECM Handbook will get published this year. That would be something to study. I also like to increase my knowledge through different case scenarios. I’d like to see more challenging deals, so that we can figure out how to make them work and be creative in the future and help more people. Another goal is to increase product awareness throughout Academy. We still have a lot of employees who haven’t been exposed to all the benefits of a reverse mortgage. It’s a large company, so we still have a lot to do internally.