Jan-Feb2020

DAN HULTQUIST AND JIM MCMINN noticed over the years that the Home Equity Conversion Mortgage (HECM) industry had developed a lot of myths, some of which were counter-productive, if not misleading. So, they put together a training program to help industry professionals see some of their biases and to take steps to avoid issues in the future. “We have got a lot of folklore. It has kind of been passed down from loan officer to loan officer or maybe your mentor to the loan officer,” McMinn, lead sales trainer, learning and development for Finance of America Reverse, said during a seminar at the NRMLA 2019 Annual Meeting. “And we just take it as gospel.” The myths would be reiterated, often with emphatic language, such as “guaranteed” or “never,” when there might be some loopholes or nuances that needed to be understood, McMinn said. “Think about what message we put out to our borrowers because there may be something in there that is not accurate.” McMinn and Hultquist, who is vice president of orga- nizational development for Finance of America Reverse, emphasized that they were not offering legal advice and encouraged the audience mem- bers to review the tips with com- pliance officers at their companies. However, they also backed up their advice with various citations from the federal rules and regulations. “This is not a legal class. It is not a compliance class,” Hultquist said. “It’s meant to be cautionary and kind of get you thinking a little bit.” Line of credit growth, for exam- ple, is one area that often isn’t prop- erly explained. The growth is not income, interest, earnings or a return on a borrower’s home equity invest- ment. Instead, the line of credit should be described as “a greater capacity to borrow more money in the future, regardless of home value,” according to the PowerPoint that they provided. McMinn then pointed to where that guidance comes from, which is HUD Handbook 7610 Chapter 4, Part 5(c): “Counselors must not tell clients that HECM credit The Rules of the Game Trainers Offer Tips on Dealing With HECM Myths By Thomas A. Barstow Dan Hultquist Jim McMinn 26 REVERSE MORTGAGE / JANUARY-FEBRUARY 2020