Michael G. Branson, CEO of All Reverse Mortgage, Inc., Orange, CA, has worked in the mortgage business for 45 years, the last 18 years devoted exclusively to reverse mortgages.
In 2006, he was working for Pacific Community Mortgage, an Alt-A lender, when his mother approached him about getting a reverse mortgage.
He didn’t know much about reverse mortgages, but he learned as much as he could in a short amount of time and helped his mother get one. The positive impact the reverse mortgage had on his mother’s life inspired Branson to form All Reverse Mortgage, which consistently ranks among the Top 20 HECM lenders.
Reverse Mortgage magazine sat down with Branson to learn more about ARM and what makes the company successful.
Reverse Mortgage: Tell me about the reverse mortgage you made for your mom and how that experience led to the formation of ARM.
Michael Branson: My mom came to me in 2005 asking about reverse mortgages and what I thought about them. I said, ‘You know Mom, in all honesty, I have no idea. I’ve never done one, never been around them.’ I worked for a forward mortgage company that originated Alt-A loans. I had been in the mortgage business for about 30 years, but I had never had any exposure to reverse mortgages. I told her I’d look into it and get back to her. The more I learned about reverse mortgages, the more I liked what I saw. We were FHA-approved and had to originate ten test cases before we could become approved to offer HECMs so I enlisted the support and buy-in from the rest of our team and together, we all decided to go for it. I told my mom that if she wasn’t in any huge hurry, we’d use her as one of our test cases. She was happy to do it. She was in no immediate need to get it. My mom was an active person. She went to Angels games, and she golfed, but she had to put a cramp on a lot of this stuff, because she ran out of money in the middle of every month, which happens to many seniors. She only had a pension. She wasn’t eligible for Social Security, because she worked for the state. It turned out to be a good deal for her. The reverse mortgage provided a small line of credit to fix up the things she needed to do in her house and gave her some extra money every month. I started originating reverse mortgages exclusively in 2006 and founded All Reverse Mortgage in 2007.
RM: Tell me about ARM. From what I’ve read, your whole family is involved in the company.
MB: Yes. My son Cliff is my partner. My other son Michael is vice president of sales. Caren Dahmus is our financial controller and our resident FHA specialist and while she’s not technically family, she may as well be, because she has worked with me for over 20 years. Our funding manager is my daughter Jennie Hegner and it was my wife, Denise Branson who set up all of the closings, post-closings and insuring at the company before she handed the reigns over to Jennie when she retired last year. We have other employees who’ve been with us for 15, 20 years. Between sales and operations, we’ve had as many as 35 employees, but we’ve had to pare that down to about 22 right now because of the current environment we’re operating in.
RM: How many states are you licensed in?
MB: We’re currently licensed in 15 states, but ARM has been licensed in as many as 18 states. If a state doesn’t produce for us, and it becomes more of a regulatory burden, then we’ll leave. We don’t do direct marketing. We don’t do mail, email, or TV broadcasts. Everything is done on the Internet, so people come to us. For some states, that approach works well, but not in every case.
RM: When I approached you about doing this interview, you mentioned that ARM was undergoing two state audits. I am curious what that experience was like. Are you finding that state regulators are more well-informed about reverse mortgages?
MB: We don’t have to do a lot of educating. Once in a while, we get an auditor who’s looking at a list and doesn’t understand that there are certain things that don’t apply to reverse mortgages. By and large, they’re quick and easy and we get through most audits unscathed. Occasionally, we get something that we don’t pick up on, for example, a document provider changes a disclosure that we don’t catch. If our processor doesn’t pick up on it, and we don’t catch it until the regulators catch it, then we have to go back and redisclose to the borrowers. Auditors don’t typically get hot under the collar about that, but they do make us fix the errors and are sure that we have procedures in place so that it doesn’t happen again.
RM: Tell me about Arlo, the cartoon dog prominently displayed on your website.
MB: We get a lot of questions from consumers. Many of them want to know if they make a prepayment or access funds, how does that affect what they owe in the future. Most online calculators don’t provide that level of detail. We developed a calculator that allows consumers to play around with different scenarios. My son Michael developed the Excel-based calculator so that borrowers can change to show different rates so that their results vary if interest rates change over time, to see how it affects their balance. Our clients can change the amount that they borrow, or even the amount that they repay, and see how that affects their loan long term. The calculator works really well and people love it. We decided, okay, now we need to name the thing and we came up with the All Reverse Loan Optimizer or ARLO. Now that ARLO name, we decided that it needed a persona, so it became a dog. Then the dog had to have glasses. Then ARLO got a cape. Pretty soon we had hats and stuffed animals that we sent out with each loan that we closed. People love the stuffed animals and so now ARLO is a prominent part of our marketing and branding. We even had it trademarked.
RM: You also write extensively and have a blog on your website that addresses many topics. I don’t know that many mortgage lenders that do this. How did that come about?
MB: That was Cliff’s idea. He said Google likes content and he added, ‘I’m not going to write it, and Michael’s not going to write it, so, Mike, you get to do that.’ Even though I write it, it is still a group effort in that many times Cliff comes up with the topic, I write it and then Michael and Caren often proofread for content and other errors (which I have been known to make now and again). We started a blog. We were approached early on by Forbes and by a couple of other publications for articles, which we gladly supplied. Now we have 15 to 16 years of content out there.
RM: And this helps prospective clients find you?
MB: Yes, it does. That’s one of the reasons why we don’t have to put out mass emails and things like that. There’s a lot of content out there. When people go on a search engine, like Google, and type ‘reverse mortgage,’ our content is usually on the first page of results.
RM: Over the past 18 years that you have specialized in reverse mortgages, what are some lessons you’ve learned that have helped make you more successful?
MB: First off, we realized that this is not a product you sell to people. We always believe that you’ve got to educate people. Let them know what a reverse mortgage is and how it works. We started this company with the philosophy that we’d rather you not take the loan for the right reason than take the loan for the wrong reason. We don’t want people coming back mad at us that they took a loan because we talked them into it. We tell people the good, the bad, and the ugly, and let them make up an informed decision. We don’t make the decision for them. We educate them. If people say, ‘What do you think about this for my circumstances, we tell them we’re not financial advisors.’ We’ll tell you everything there is to know about a reverse mortgage, and then you can decide with your financial advisor, your trusted accountant, or your attorney, whether or not that’s the right loan for you. But we can’t make that decision, only you can. The key to our success is we don’t push people and they trust us for that.
RM: Do you stay in touch with your clients after they close?
MB: We sure do, but we also make sure never to violate any email laws or TCPA (Telephone Consumer Protection Act, Do Not Call Registry, no auto-dialing, etc.). We don’t go after people whom we don’t know didn’t contact us first. If you haven’t authorized us to send you stuff, we don’t do it. If you ask us to quit sending you stuff, we’ll quit sending it. Information that we send out we keep relevant and up to date. We do not go after refinances of the loans we’ve done because we don’t churn. If somebody contacts us and asks us if we’ll refinance their loan, of course, we will if that’s what they want. Maybe we missed the boat when home values rose and rates dropped, but we just make it a point not to cannibalize our pipelines.
RM: How do you generate most of your loan production? Business referrals? Advertising? Social media?
MB: Our business comes from referrals, social media, and being listed high on Google searches. When we first started out, we tried everything. Live lead transfers. Emails. Then we tried sending out placards (postcards), same as everybody else, which ended up going into somebody’s trash somewhere, and people saying, ‘Don’t call me anymore.’ We pretty much found out what made people angry really quickly. We don’t want to be that company. We’ve always kept staffing pretty lean. We never wanted to be the company that was so bloated we were desperate for business and had to reach for every loan or make the most possible on each loan and we saw that as a way to keep our pricing down.