March/April 2022 Reverse Mortgage Magazine

The official magazine of the National Reverse Mortgage Lenders Association www.nrmlaonline.org March-April 2022 Volume 15, No. 2 INSIDE: Appraising the Industry Regulators Ramp Up Investigations P. 24 P. 28 Sales Boost Tips Offer Ways to Increase Your Closings

BRING VALUE. GO FAR. Build and nurture professional referral partners with FAR, the official reverse educator of the Financial Planning Association (FPA) and published in the Journal of Financial Planning. For business and professional use only. Not for consumer distribution. ©2022 Finance of America Reverse LLC is licensed nationwide | Equal Housing Opportunity | NMLS ID # 2285 (www.nmlsconsumeraccess.org) | 8023 East 63rd Place, Suite 700 | Tulsa, OK 74133 | AZ Mortgage Banker License #0921300 | Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee #23647 | Kansas Licensed Mortgage Company | Massachusetts Lender/Broker License MC2285: Finance of America Reverse LLC | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker -- NYS Banking Department where Finance of America Reverse is known as FAReverse LLC in lieu of true name Finance of America Reverse LLC | Rhode Island Licensed Lender | Not all products and options are available in all states | Terms subject to change without notice | For licensing information go to: www.nmlsconsumeraccess.org Expand your Financial Planner network with a partner that sets you apart Email us at Xcelerate@fareverse.com to receive your free digital financial professional networking kit

From the Top Leslie Flynne, Director, PHH Mortgage Services By Darryl Hicks 12 Those We Help Reverse mortgage helps cover future healthcare By Darryl Hicks 32 Features 18 Sales Boost Tips offer ways to increase your closings By Joel Berg 24 Appraising the Industry Veterans explore trends in reverse mortgage appraisals By Robert Bittner 28 Regulators Ramp Up Investigations Attorneys outline trends in federal, state loan regulations By Thomas A. Barstow Columns 3 In Reverse Appraisals, sales, compliance, set tone for reverse mortgages By Thomas A. Barstow 5 Steve Irwin: Moving Forward NRMLA continues fighting for you 7 Board Room Improved education is essential to market expansion By Joseph DeMarkey Departments 2 Scribes Meet this month’s contributors 8 What’s News Get up to date on the industry, the press and Washington, D.C. 34 Member News/Who’s Who in Reverse 36 Numbers A closer look at using home equity to sustain cash flow for aging in place March-April 2022 Volume 15, No. 2 CRMP: Across the Kitchen Table A chat with Mario Martirano, CRMP, Homebridge Financial Services By M. Diane McCormick 16 Contents PUBLISHER Peter Bell pbell@dworbell.com SENIOR EDITOR Thomas A. Barstow thomas.barstow@theYGSgroup.com ASSOCIATE EDITOR Darryl Hicks dhicks@dworbell.com MANAGING EDITORS Sam Hoffmeister samuel.hoffmeister@theYGSgroup.com Julia Berley julia.berley@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 Emily Graf 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 Megan Brodbeck (megan.brodbeck@ theYGSgroup.com) and Sam Hoffmeister (samuel.hoffmeister@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 ©2021 National Reverse Mortgage Lenders Association

Scribes Meet This Month’s Contributors Darryl Hicks (From the Top, p. 12, and Those We Help, p. 32) joined NRMLA in May 1999 and currently serves as vice president, communications. Hicks writes the Weekly Report newsletter, administers NRMLA’s social media accounts and websites and manages the CRMP designation. Steve Irwin (Moving Forward, p. 5) president of NRMLA, oversees the association’s initiatives to serve as an educational resource, policy advocate and public affairs center for consumers, lenders and related professionals. His background includes experience with strategic planning, organizational design, portfolio acquisition, risk management and quality control. He received his B.A. from Grinnell College and his MBA from the University of San Francisco. Joseph DeMarkey (Board Room, p. 7) is the strategic business development leader of Reverse Mortgage Funding LLC. He is also responsible for government and industry relations. Previously, he was an assistant vice president at MetLife Bank, where he was responsible for sales management, product development, strategic business development and government and industry relations for the reverse mortgage division beginning in 2008. He has served on NRMLA’s Board of Directors since 2003, was co-chairman from 2007 to 2009 and from 2012 to 2018 and currently serves as chairman of the Executive Committee. M. Diane McCormick (CRMP: Across the Kitchen Table, p. 16) is a freelance journalist and former legislative press secretary. She covers issues involving a variety of national business associations, as well as basic and higher education. Her 2017 book, WellBehaved Taverns Seldom Make History, explores Pennsylvania pubs where rabble-rousers stirred up trouble, from the American Revolution to Prohibition. Thomas A. Barstow (In Reverse, p. 3, and Regulators Ramp Up Investigations, p. 28) is the senior editor for Reverse Mortgage magazine. Barstow has had a 37-year career in journalism that includes being a reporter, writer or editor in Maryland, North Carolina, Pennsylvania and New York. He currently teaches journalism at Gettysburg College and writes for various business publications. He is a former president of the Pennsylvania Society of News Editors and a former president of the Associated Press Media Editors in Pennsylvania. Joel Berg (Sales Boost, p. 18) has been a business-to-business reporter and editor for more than 20 years, both in-house and freelance, covering finance, healthcare, environmental regulation and general business news for local, regional and national publications. Most recently, he was editor of the Central Penn Business Journal and Lehigh Valley Business in Pennsylvania. He also taught writing and communications at York College, Millersville University, Gettysburg College and Harrisburg University. Robert Bittner (Appraising the Industry, p. 24) has worked as a publicist, marketing copywriter and book editor for a number of Chicago-area publishers. A full-time freelance writer for more than 20 years, he now lives in Michigan and has traditionally published hundreds of magazine articles and five nonfiction books, including Your Perfect Job (Random House). To learn more, visit www.robertbittner.com. (800) 542-4113 PRClosings.com PRCthe missing piece to your puzzle SEARCHING FOR THAT MISSING PIECE? SEARCH NO MORE! PRC is a one-stop shop for YOUR reverse mortgage title and settlement needs. We provide Trust and POA reviews, 24-month tax histories, curative work for old liens, a quarterly CRMP credit course, in-house legal, and numerous additional effective business tools to ensure your success! Contact us today for more information! 2 REVERSE MORTGAGE / MARCH-APR I L 2022

In Reverse Appraisals, Sales, Compliance Set Tone for Reverse Mortgages By Thomas A. Barstow WITHOUT STRONG SALES, companies can’t survive. Without solid partnerships with appraisal companies, loan volumes wither. Without dotting the i’s and crossing the t’s when it comes to government regulations, companies get distracted from their main mission of sales. In this issue of Reverse Mortgage magazine, we look at all three of these cornerstones to the lending industry. In the cover story, Sales Boost: Tips Offer Opportunities to Increase Your Closings (p. 18), loan officers provide insights into what they have been doing to increase closings, from tried-and-true networking at local community events to how best to handle telephone pitches to social media. The article also discusses an important point that NRMLA’s leaders emphasize: Much more needs to be done to educate potential referral partners about reverse mortgages and how these tools can serve their clients. As a former real estate agent, Matt Harrison, CRMP, has seen how agents often know little about how reverse mortgages work. As a loan consultant, Harrison meets with real estate agents to show them that HECMs for Purchase can truly improve the lives of potential clients. Similar points are made by Joe DeMarkey, who wrote this edition’s Board Room column (p. 7). As the strategic business development leader of Reverse Mortgage Funding LLC, DeMarkey continually interacts with financial advisers, builders, in-home care agencies and real estate agents to spread the word about reverse mortgages. He encourages everyone in the industry to ramp up efforts on this education front. “I strongly believe that when potential borrowers, their family members and advisers are better educated on the product features of reverse mortgages, they will make better informed decisions about their financial well-being,” he writes. “This will undoubtedly lead to the responsible market growth that our industry needs.” Those efforts, he suggests, could do much more to advance sales than product innovations, which he suggests are critical to future success. All of the sales tools and education efforts in the world don’t mean much if a loan gets bogged down along the way. I previously have written how the servicing end of the industry includes the unsung heroes whose attention to detail ensures that loans go through as In Reverse continued on page 4 REVERSE MORTGAGE / MARCH-APR I L 2022 3

In Reverse smoothly as possible, especially in an atmosphere where regulations only get more complex with time. The same could be said about appraisal management companies and their appraisers, whose critical skills secure the best deals and the fairest prices for consumers. Their intense workloads in the past few years are only getting worse, but these important partners constantly adjust to make sure that appraisals are getting done on time and accurately. Those discussions are brought out in the article Appraising the Industry (p. 24). Writer Robert Bittner points out the problems and how these dedicated professionals sift through them, while also mentioning possible solutions in the form of legislative relief and changes in technologies. Compliance concerns are important every day of every year, but this year is expected to be particularly difficult, attorneys at the Venable law firm point out. The Biden administration has been ramping up enforcement efforts when it comes to fair lending, particularly digital redlining. Federal agencies have been coordinating among themselves, as well as with state attorneys general nationwide to clamp down on perceived violations of fair lending laws. The article Regulators Ramp Up Investigations (p. 28) takes a closer look at those initiatives and provides some tips on how to navigate inquiries. Targeted marketing campaigns are wonderful digital tools for increasing sales. However, if the programs are not set up properly, they can run afoul of regulations against discrimination. Federal agencies will be looking at the underlying algorithms to see if digital redlining is occurring. The experts expect that there will be a great increase in cases this year, as activist regulators make up for what they believe was lax enforcement under the previous administration. Meanwhile, 2022 is on track to rival the successes of last year. We will continue to monitor these and other developments, so you can best meet new challenges. In Reverse continued from page 3 4 REVERSE MORTGAGE / MARCH-APR I L 2022

Moving Forward NRMLA Continues Fighting for You Past and Future Initiatives Continually Improve Reverse Mortgages By Steve Irwin, President, NRMLA “The downfall of any leader is when he gets carried away with his own ego.” —Toto Wolff, team principal and CEO, Mercedes-AMG Petronas F1 Team HERE AT NRMLA, we provide our association customers with a turnkey management solution that includes staffing, financial management, strategic communications, educational resources, event management, business networking opportunities and public affairs. We work to advocate on our members’ behalf and on behalf of the senior homeowners our members serve. Through meetings with “both sides of the aisle,” we continue to work with the Senate Appropriations Committee and the House Appropriations Committee to ensure the cap on the allowable number of insured Home Equity Conversion Mortgages (HECMs) continues to be suspended. It remains our goal to get this cap permanently removed, and it is an operating reality that we tackle head-on. NRMLA developed meaningful relationships with the relevant committees in the House and Senate. Through these relationships, NRMLA navigated the successful passage of the Reverse Mortgage Stabilization Act and successfully represented our membership through several Senate and House hearings on reverse mortgages. NRMLA also has successfully managed several initiatives at the state level. As a participant in Consumer Financial Protection Bureau (CFPB) stakeholder meetings, NRMLA advised the CFPB on evaluating its exams, making them relevant to the reverse mortgage space. NRMLA maintains a relationship with the Office of Mortgage Markets and the Office of Older Americans at the CFPB. NRMLA has worked with Ginnie Mae (GNMA) to create relevant file standards for the reverse mortgage space. We continue to engage with GNMA on our members’ behalf to ensure continued liquidity for the reverse mortgage marketplace. We engage with the U.S. Department of Housing and Urban Development (HUD) to ensure a continued Steve Irwin Moving Forward continued on page 6 REVERSE MORTGAGE / MARCH-APR I L 2022 5

Nationwide Property Inspections and Preservation Inspections Preservation Insurance Loss Inspections REO Services Violation Management Utility Management Vacant Property Registrations Foreclosure Registrations Special Services Protecting Your Properties. Protecting You. • NFROnline.com • 800-639-2151 Moving Forward and successful HECM program. There remains work to be done with HUD, but through meetings with several Secretaries of Housing, Federal Housing Administration Commissioners, other political appointees, as well as with career staff, NRMLA has been able to ensure HUD’s continued support of the HECM program through successive administrations. NRMLA has created a committee structure that enables our members to collaborate, as competitors, on common issues. These committees include: • HUD Issues; • Servicing; • Risk & Compliance; • State & Local Issues; • HMBS Issuers; • Education; • Ethics; • Diversity, Equity & Inclusion; • Technology; and the • Independent Certification Committee. NRMLA created and administers the only robust and authentic reverse mortgage certification program—the Certified Reverse Mortgage Professional (CRMP). We have an effective, valid and reliable certification program. NRMLA maintains two unique websites. We have a member site, www.nrmlaonline.org, and a robust consumer site, www.reversemortgage.org. We have developed a set of consumer guides and information for consumers and their trusted advisers on reverse mortgage products. We continue to support proactive communications with our members through our award-winning Reverse Mortgage magazine and through our weekly newsletters. NRMLA hosts best-in-class conferences each year. The feedback from these events remains overwhelmingly positive and are recognized for promoting best practices, educating our members and providing unique business opportunities for our attendees. I thank all of our members for their support and participation in our association efforts. Without our members, none of this work would be possible. Moving Forward continued from page 5 6 REVERSE MORTGAGE / MARCH-APR I L 2022

Improved Education Is Essential to Market Expansion By Joseph DeMarkey RESPONSIBLE MARKET GROWTH is one of the most important goals for NRMLA. After a very successful 2021 for the industry, NRMLA plans to focus heavily on education in 2022 to grow the market. We encourage all NRMLA member companies to follow this path as well. While product innovation expands access to reverse mortgages, pervasive misconceptions must be countered through targeted educational outreach and programs. We can’t innovate our way out of what the general public—including potential borrowers—believe or think they know about reverse mortgages. I always have maintained that a reverse mortgage is the most brilliantly designed residential mortgage loan I have seen in my 36-year career—but it’s also the one that is most misunderstood. There is a significant market need for reverse mortgages, yet a lack of understanding prevents widespread product adoption. As industry leaders, it’s our job to address our products’ misunderstandings head-on through better education. Advisers for senior homeowners are the gatekeepers of our industry’s growth. However, most financial advisers, builders, in-home care agencies, real estate agents and elder law attorneys simply don’t know enough about reverse mortgages to include them in their financial and retirement planning toolboxes. My company, Reverse Mortgage Funding (RMF), is doubling down on its investment in professional education to ensure our partners, potential borrowers, their family members and advisers are well educated on reverse mortgage strategies and product features. Through RMF’s Retirement Experts Network, financial advisers, elder law attorneys, tax professionals, housing counselors and regulators can attend educational webinars, and some earn continuing education credits. RMF also is investing in educational materials for in-home care agencies whose clients want to remain in their homes. As you can imagine, the demand for in-home care services has become even greater throughout the pandemic. Seniors are seeking advice from in-home care agencies on how to finance the services they so desperately need and desire. Lastly, RMF is educating builders about reverse mortgage options, especially those in age-restricted communities. This is particularly important as the industry expands accessibility to younger customers through innovative products, such as RMF’s recent launch of its Equity Elite product for people aged 55-plus in certain states. A key aspect to RMF’s decision to lower the minimum age to 55 is the ability to serve the oldest members of Gen X, a key target demographic of many builders of new age-restricted communities. In conclusion, I strongly believe that when potential borrowers, their family members and advisers are better educated on the product features of reverse mortgages, they will make better informed decisions about their financial well-being. This will undoubtedly lead to the responsible market growth that our industry needs. Board Room Joseph DeMarkey REVERSE MORTGAGE / MARCH-APR I L 2022 7

FHA Annual Report: Economic Value of HECM Portfolio Improves by $4.3B Thanks to strong home price appreciation, the financial performance of the Home Equity Conversion Mortgage (HECM) portfolio improved in each of the last three years and is now positive for the first time since Fiscal Year (FY) 2015, according to the Department of Housing and Urban Development’s (HUD) 2021 Annual Report to Congress, released on November 15. HUD reports the HECM portfolio has a stand-alone capital ratio of 6.08 percent as of September 30, 2021, compared to a negative 0.78 percent capital ratio from the previous year. Put another way, the economic value of the portfolio improved by $4.3 billion over the past year from a negative $0.5 billion in FY2020 to a positive $3.8 billion in FY2021. “We are very pleased that HUD’s programmatic changes, including Financial Assessment, continue to have the desired effect of improving the fiscal soundness of the HECM program,” said NRMLA President Steve Irwin. Read the report at bit.ly/3J7Vs5B. New York Governor Signs Co-op Bill New York Governor Kathy Hochul signed legislation into law that permits reverse mortgages on cooperative housing for persons aged 62 and older. The bill becomes effective 180 days after it was signed into law on December 1. NRMLA advocated for the passage of the co-op bill. NRMLA met with its retained New York lobbyist and the bill’s sponsors in Albany to ameliorate any concerns People are talking about ... regarding proper consumer protections for co-op owners. NRMLA also worked directly with other stakeholders, including AARP, the Council of New York Co-ops and Condominiums and the National Council of Housing Co-ops, so as to navigate a successful path forward for this legislation. The Federal Housing Administration does not permit Home Equity Conversion Mortgages on co-ops, but the new law paves the way for lenders that offer private-label reverse mortgages in New York to provide products for co-op owners. In-Person Counseling Resumes in Massachusetts Effective December 15, in-person reverse mortgage counseling resumed in Massachusetts. The Massachusetts Division of Banks notified licensees on December 14 that in-person counseling would resume for reverse mortgages “originated from December 15, 2021.” The Division of Banks defined “originated from” as the application date. Massachusetts has historically required all reverse mortgage counseling to be conducted face-to-face. After Governor Charlie Baker declared a state of emergency on March 10, 2020, he subsequently signed a bill into law that allowed reverse mortgage counseling to be conducted in person by synchronous, real-time video conference or by telephone. This change was in effect from April 20, 2020, until the end of the State of Emergency on June 15, 2021. On June 16, Governor Baker signed into law a bill that further extended this provision until December 15, 2021. NRMLA and its Massachusetts members will continue to advocate for a legislative solution to permit counseling by phone, video or in person on a permanent basis. Election of 2021–2022 Board of Directors During NRMLA’s Annual Business Meeting on Tuesday, November 2, the membership approved the 2021 Nominating Committee Report and the election of the following slate of directors to serve on the board of directors for the 2021–2022 term: • Rob Awalt, Allegiant Reverse Services; • Terry Connealy, Mutual of Omaha Mortgage; • Jim Cory, CRMP, Cherry Creek Mortgage; • Laura Cullen, Longbridge Financial LLC; What’s News EVERYTHING NEW YOU EED TO KNOW 8 REVERSE MORTGAGE / MARCH-APR I L 2022

• Joseph DeMarkey, Reverse Mortgage Funding LLC; • George Downey, CRMP, Harbor Mortgage Solutions Inc.; • Leslie Flynne, PHH Mortgage Corporation dba Liberty Reverse Mortgage; • Kevin Gherardi, Reverse Technology Group LLC; • Scott Harmes, CRMP, C2 Financial Corp.; • Tim Isgro, Reverse Mortgage Funding LLC; • Elly Johnson, All Reverse Pro; • Michael Kent, PHH Mortgage Corporation dba Liberty Reverse Mortgage; • Joe Langner, ReverseVision; • Ryan LaRose, Celink; • Megen Lawler, Bay Docs; • Rick Lieber, American Advisors Group; • Christopher Mayer, Longbridge Financial LLC; • Michael McCully, New View Advisors LLC; • Scott Norman, Finance of America Reverse LLC; • Alex Pistone, Mutual of Omaha Mortgage; • Loren Riddick, CRMP, Thrive Mortgage; • Kristen Sieffert, Finance of America Reverse LLC; • Robert Sivori, RoundPoint Mortgage Servicing Corp.; • Jules Vogel, American Advisors Group; and • Jay Wright, Bradley. The board of directors subsequently elected the following officers: • Scott Norman, co-chair; • Michael Kent, co-chair; • Robert Sivori, vice chair; • Jim Cory, CRMP, vice chair; • Leslie Flynne, secretary; and • Michael McCully, treasurer. Journal of Financial Planning Highlights Importance of Reverse Mortgages The December 2021 issue of the Journal of Financial Planning featured an article noting that reverse mortgages can provide an essential risk mitigation tool for millions of retirees—dramatically reducing exposure to longevity and market risks while growing their investment portfolios. The article found retirement strategies that use a reverse mortgage as an alternative source of cashflow to a traditional investment portfolio hold the greatest benefit for mass affluent Americans—generally defined as those with $100,000 to $1.5 million in investible assets. Read the full article at bit.ly/3Ef3aa4. The press is talking about ... Columnist Discusses Market Risks and Reverse Mortgages In a guest column for RetirementDaily.com, CPA Robert Klein offered a convincing case for why a Home Equity Conversion Mortgage (HECM) should be used by new retirees to manage and mitigate against sequenceof-returns risk. “Negative returns in the first few years of retirement, if not protected from sequence of returns risk, can significantly increase the possibility of premature portfolio depletion,” Klein says. “A HECM mortgage, with its accompanying credit line, provides tax-free liquidity during this critical period to insure against this risk in lieu of taking potentially taxable distributions from an investment account that’s declining in value.” Using a 65-year-old retiree with a 25-year life expectancy, a $1 million retirement portfolio, annual withdraws of five percent or $50,000 that increase by three percent each year, and an average rate of return of seven percent, Klein presented three detailed scenarios to help illustrate his case. A reverse mortgage, he adds, “protects you from the temptation to sell when the market is on its way down and attempting to time the market when buying back in, both of which are generally losing propositions.” Read the full article at bit.ly/3qdnwf5. Columnist: Reverse Mortgages Mitigate Tax Bites MarketWatch tax columnist Bill Bischoff explained how a reverse mortgage can provide a better alternative solution to finance a retirement compared to selling a home that has appreciated greatly over time and would generate a big tax bill when sold. “An unwelcome side What’s News continued on page 10 REVERSE MORTGAGE / MARCH-APR I L 2022 9

effect of owning a hugely appreciated home is the fact that selling the property to raise cash can trigger a taxable gain well in excess of the federal home sale gain exclusion break—up to $500,000 for joint-filing couples and up to $250,000 for unmarried individuals,” Bischoff said. “The federal and state income tax hit from selling could easily reach into the hundreds of thousands of dollars, and all that tax money would be gone forever.” Bischoff added, “In contrast, if you can get the cash you need by taking out a reverse mortgage, the only cost will be the fees and interest charges. If those fees and interest charges are a small fraction of the taxes that you could permanently avoid by continuing to own your home, the reverse mortgage strategy can make perfect sense.” Read the full article at on.mktw.net/3pcjjJc. In Washington, they’re talking about ... HECM Loan Limit Increased to $970,800 in 2022 The Federal Housing Administration increased the maximum claim amount for Home Equity Conversion Mortgages in calendar year 2022 from $822,375 to $970,800 effective for case numbers assigned on or after January 1. This new maximum claim amount applies to Freddie Mac’s special exception areas of Alaska, Hawaii, Guam and the Virgin Islands. Details were published in Mortgagee Letter 2021-29 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release. NRMLA Submits Comments to HUD on LIBOR In comments submitted to the Department of Housing and Urban Development (HUD) on December 6, NRMLA provided answers to 14 questions posed by HUD in an October 5 notice pertaining to the ongoing transition away from the London Interbank Offered Rate (LIBOR) index. HUD will use the feedback it collects from the mortgage industry—both forward and reverse—to craft a proposed rule. In its comments, NRMLA recommended replacement indices and timelines that servicers will need to transition existing Home Equity Conversion Mortgages (HECMs) to a new index. Members can read the complete set of comments by logging into the Comment Letters section of www.nrmlaonline.org. Senate Testimony: Congress Should Explore Ways to Improve Reverse Mortgages Reverse mortgages offer a potentially useful tool to convert illiquid housing wealth into money to live on during retirement, according to congressional testimony provided by Shai Akabas, director of economic policy at the Bipartisan Policy Center, a Washington, DC, think tank. Testifying before the Senate Special Committee on Aging on October 28 at a hearing on retirement security, Akabas noted that, “Americans own $21 trillion in home equity, a sum that could significantly supplement the nation’s $35 trillion of retirement assets.” Despite its potential usefulness, the reverse mortgage market is currently quite small, Akabas testified. He recommended that policymakers “work to improve this market and make it a simpler, more useful and a more cost-effective tool for older, ‘cash poor’ Americans to utilize their home equity.” The hearing examined solutions to close retirement gaps and expand financial security and included testimony from witnesses who spoke to the effects that career disruptions can have on retirement security, especially for workers who must become family caregivers or take time off to deal with health-related issues. Watch the hearing at bit.ly/3H3EFid. And now you’re up to date. What’s News continued from page 10 Shai Akabas LET US KNOW WHAT YOU’RE TALKING ABOUT. This forum is the place for readers to share their opinions with fellow colleagues about the direction of the reverse mortgage business and other retirement trends. Submissions should be limited to 100 words or less and submitted to Associate Editor Darryl Hicks, at dhicks@dworbell.com. 10 REVERSE MORTGAGE / MARCH-APR I L 2022

NRMLA, through its Servicing Committee, Executive Committee and Board of Directors, continually strives to improve the customer experience for reverse mortgage borrowers, especially when it comes to servicing and the “end of loan” repayment process. Among the subject matter experts involved in these policy and consumer outreach discussions is Leslie Flynne, director of reverse mortgage servicing at PHH Mortgage Services. Since entering the reverse mortgage space a decade ago, Flynne has tirelessly advocated for clear, consistent and manageable servicing policies that benefit mortgagees and consumers alike. She is also a frequent speaker at NRMLA events to help ensure reverse mortgage professionals gain a better understanding of servicing guidelines and timelines and, therefore, can help clients and family members better manage expectations. In 2011, Flynne joined Reverse Mortgage Solutions, Houston, TX, where she initially managed the Real Estate Owned (REO) division and was soon promoted to senior vice president of servicing operations. This past fall, RMS was acquired by PHH Mortgage Services, a division of Ocwen Financial. Before joining RMS, Flynne spent 20 years with Washington Mutual and its predecessor, Bank United, in a variety of financial and operational director positions, which included servicing operations for the commercial real estate lending portfolio for the commercial banking operations. Reverse Mortgage sat down with Flynne to talk about the recent PHH acquisition, ongoing efforts to protect borrowers impacted by COVID, and the increasing need for servicers to become more tech savvy. Reverse Mortgage: You recently joined PHH Mortgage after it acquired Reverse Mortgage Solutions’ reverse mortgage servicing portfolio. What’s involved onboarding that many RMS loans into a new system? What does that process look like for borrowers who were accustomed to dealing with RMS? Leslie Flynne: The PHH transaction was an acquisition of substantially all of the RMS staff, operating processes and the servicing systems. The acquisition closed on October 1, 2021, and all of RMS’ clients and their loan portfolios were assigned to PHH. As a result, the borrowers were not transferred to a new servicing system but rather PHH became their servicer. While the borrower’s received a welcome letter from PHH they did not experience any of the changes that occur when a loan transfer transpires and there is a servicing system conversion. The transaction, I think, has been Leslie Flynne, Director, PHH Mortgage Services By Darryl Hicks From the Top Leslie Flynne 12 REVERSE MORTGAGE / MARCH-APR I L 2022

nearly invisible to the borrowers as the customer-facing processes have only been improved and will continue to benefit from the strength of the PHH servicing organization. RMS has always been borrower focused and the PHH core principles are perfectly aligned with delivering servicing excellence. RM: Can you share how many reverse mortgages (HECM and private-label) are now being serviced by PHH? Does that make PHH the largest reverse mortgage servicer? LF: RMS was a servicer of legacy reverse mortgages, which were principally HECMs. Being a part of PHH provides a perfect opportunity to expand the operations to include newly originated HECMS and proprietary reverse mortgages. PHH’s reverse lending business operates under Liberty Reverse Mortgage. The Liberty portfolio had previously been subserviced. On December 1, the Liberty portfolio was brought in house and all new originations are being serviced by PHH. These new originations and other subservicing client transactions create a large servicing portfolio of Ginnie Mae, Fannie Mae and private securitizations. It is exciting to see new reverse mortgages and proprietary products being boarded each month. I believe in reverse mortgages and the safety and security it can bring to people’s lives. I further believe that everyone in the reverse industry— including loan officers, underwriters, processors and servicing staff—make a positive difference in peoples’ lives, and we love doing it. RM: The Federal Housing Administration has implemented policies to protect HECM borrowers who were negatively impacted by the pandemic. Things are slowly returning to normal, but are you at all concerned about a possible increase in foreclosure activity? Is PHH taking precautionary measures to protect its clients? LF: FHA has gone to great lengths to protect borrowers during the pandemic, as has the federal government From the Top continued on page 14 From the Top Here’s why. • No B.S. Underwriting • Unbeatable Service • No Commission Caps • Volume Bonuses Corporation NATIONWIDE Equities • Use your own AMC • Liberal Exceptions • Competitive Pricing • Support Team Access For industry professionals only. Become a wholesale partner and you’ll see. nwecorp.com/nrmla NMLS #1408 NRMLA-Mar_April-Print_concepts - Copy.indd 1 1/26/2022 4:16:00 PM REVERSE MORTGAGE / MARCH-APR I L 2022 13

in the creation of the Homeowner’s Assistance Fund (HAF). The HAF programs will be administered at the individual state level and are just getting started. We have witnessed the consequences the national and worldwide pandemic has had on our borrowers and their families. We have seen borrowers struggle paying their taxes, insurance and homeowner’s dues, which puts them at risk of foreclosure. However, PHH continues to reach out to borrowers to enter repayment programs, and we are eager to participate in the HAF programs that will provide financial assistance to qualifying borrowers. Any time a borrower or authorized party reaches out for help or answers our phone calls or responds to our letters we are ready to provide assistance, so that they understand their options and avoid a foreclosure whenever possible. RM: Reverse mortgage servicers are becoming more tech savvy to be more efficient and improve the customer experience. What technological innovations has PHH implemented recently, or has plans to implement in 2022? LF: I am delighted to be part of the PHH servicing organization that has developed some extraordinary innovations on the forward side of the house. There have been significant investments in technology to enhance the customer experience and operational execution. Technology is a big driver for PHH. I believe a lot of PHH’s technology innovations will ultimately benefit our reverse servicing operation and customers. New ways of doing things with improved technology is a reality at PHH. Most important is that the reverse business, both originations and servicing, is valued at PHH. I also know that out of this pandemic we have all become resilient and learned that dramatic change can be really good. Improvements in educating borrowers and explaining what happens after a reverse loan is originated through the end of the life of the loan will become easier with improved technologies. While we may have grown weary of Zoom meetings, there is no denying that virtual meetings with borrowers versus the traditional phone call is a winner. RM: What’s a typical day like for a servicing executive like yourself? Do you interact much with consumers, or are you and your team focused mostly on compliance? LF: They all seem unique and very challenging. The old saying of “there just aren’t enough hours in the day” comes to mind. However, the best part of any day is interacting with borrowers. While I am not on the “front line,” helping those who are is the highlight of any day. From the Top continued from page 13 From the Top 14 REVERSE MORTGAGE / MARCH-APR I L 2022

I love solving problems, and, when it involves a person’s home and their sense of security, what greater meaning could our jobs have? Compliance is a fact of life. I always try to focus on how the regulation is supposed to help customers and that is a good compass. These are words that are easier said than lived, in certain circumstances. A great deal of the new regulations that we face were not written with reverse mortgages in mind. Navigating through the maze can be challenging and costly if not done well. Compliance with regulations is fundamental to strong operations and we will not waiver, no matter how challenging it might be. Thank goodness for the compliance experts that enlighten our days. RM: What do you find is the most challenging aspect of being a reverse mortgage servicer? LF: I have been in servicing for over 35 years and never loved anything more than reverse servicing. It is a meaningful and necessary product that provides financial security. It is intended to last a lifetime and—when it does—this is a victory for the borrower. When borrowers find themselves in financial difficulties, or they are facing health issues, which do not allow them to remain in their homes, it gives us the opportunity to be our most compassionate and kind self. We can’t always control the outcome, but we can be there with options and a strong commitment to help in all the ways we can. Not every career lets you make such a difference in people’s lives. RM: Are there many differences servicing a HECM compared to a proprietary reverse mortgage? LF: There are differences. Insured HECMs are highly regulated and very precise in how the servicing must be performed. There is a great deal of consistency in insured HECM servicing. Proprietary reverse mortgages generally follow similar servicing practices but with more flexibility and discretion. Investors may provide different protocols based on different factors of the loan. However, in both cases, a servicer must service in accordance with the loan documents and the applicable rules. RM: What do you see as the reverse mortgage industry’s top servicing priorities in 2022? LF: There are many priorities but the top ones I see are borrower education, increasing production volume, servicing profitability and improving the health of the Mutual Mortgage Insurance Fund. These are not in any particular order of importance, but they are the challenges that I hope we see real success being made in these areas in 2022. From the Top Financing Seniors’ Independence ServingUtah and Idaho for Over 20Years We opened our doors in 1999 to provide local homeowners and those wishing to be homeowners good quality mortgage loans with no hidden surprises or costs. We pride ourselves on being customer oriented and find loans that are tailor made for our clients. We added the reverse mortgage loan to our great line of product offerings and have been providing the people of Utah and Idaho this loan as another mortgage available to meet whatever financial need arises. We continue to remain committed to our clients’ mortgage financing needs, and our variety of all residential mortgage loan products makes us a great company to add to your network of professionals. FSI Mortgage Independence Square 111 East 5600 South • Suite 102 Murray, UT 84107 • NMLS #4398 www.fsimortgage.net 1-800-808-3066 REVERSE MORTGAGE / MARCH-APR I L 2022 15

THE 76-YEAR-OLD neighbor called, crying because she was about to lose her home. It was 1992, and Mario Martirano was in his mid20s, working in mortgages with Bank of New York. He knew that his neighbor, a recent widow on Social Security, couldn’t pay back a traditional mortgage. He learned that Bank of New York offered reverse mortgages—new to the market then—but had no one to service them. “I learned how to do it,” he says. “It took about six months. We saved her house, and it was my inspiration to get into this program.” Today, Martirano looks back on a nearly, 30-year career in reverse mortgages. He has worked independently and with large and midsized firms. He helped shape the Certified Reverse Mortgage Professional (CRMP) credential that has elevated the profession and built trust among potential clients. After that situation in the early 1990s, Martirano experienced a version of that phenomenon when you buy a new car and suddenly see the same model everywhere. He started spotting people who would benefit from getting money out of their homes while aging in place. He started a reverse mortgage program for the bank. In his first year, he processed 100 applications. “I was learning everything from soup to nuts,” he says. Approached by a California firm about starting an East Coast division, he agreed on the condition that they would sponsor him if he decided to start his own company. His continued success convinced him that he was on the right track, so in 1994, he started his own company, Agency for Consumer Equity Mortgages. The company grew, providing reverse mortgages in New York, Connecticut and Florida. Martirano became Varied Career Lays Foundations for Industry A Chat With Mario Martirano, CRMP, Homebridge Financial Services By M. Diane McCormick Mario Martirano CRMP: Across the Kitchen Table 16 REVERSE MORTGAGE / MARCH-APR I L 2022

active in NRMLA, and while serving on the board, he joined the effort to create a new credential for reverse mortgage professionals—the CRMP. In 2010, he joined about 15 other reverse mortgage professionals and went to Orlando, FL, for three days. Together, they sequestered while they devised a plan to launch a professional designation and devise its testing requirements. On the scale of big decisions, taking out a reverse mortgage is akin to buying a home, and clients need someone they can trust. Martirano says that his experience goes a long way toward instilling that trust, but the CRMP is “the topping on the cake.” “Especially with reverse mortgages, people put a lot of faith and trust in you and your knowledge,” he says. “They feel a lot more comfortable knowing that you have that experience, and you have that CRMP designation.” In 2010, Martirano had been embargoed from getting his CRMP for the first year after he helped establish the credential, but he went for it as soon as he could, in 2012. “The designation of CRMP, I felt, would give me a competitive edge,” he says. “The customer can see that I’m dedicated through the program. We have to go through continuing education. We have to take a test. It shows that I’m committed to the industry.” He has seen changes in reverse mortgages, as the advent of financial assessments has disqualified many applicants. But reverse mortgages continue to help many people. Today’s typical client uses the reverse mortgage to pay off existing loans or finance repairs. Homeowners frightened over the dire circumstances at nursing homes during the COVID-19 pandemic, especially in Martirano’s territory of New York state, use the process to fund home healthcare. “Everyone has their own story,” he says. “I like listening to them.” One client did all the traveling she’d always wanted to do, finally seeing the Great Wall of China. She also helped her grandchildren go to college. “Her sentiment was, ‘Let them enjoy me now, while I’m still here,’” he says. One widower didn’t share his goals for the money, but when Martirano visited a month later, a luxury convertible was parked in the driveway. “He was 80 years old,” says Martirano. “I guess he wanted to drive around in style.” Another widow, whose reverse mortgage funds were meant to help her husband get a college degree, used the money after his death to earn that degree herself. Martirano learned in a newspaper article about that dream come true. “You get a lot of nice stories, but unfortunately, a lot of people are in tough situations,” Martirano says. “Still, they’re so relieved. They’re so grateful when they get this money. Now, they can stay in their house, and they can live a lot more comfortably.” He rides with the pendulum swings of the industry. As banking and regulations tightened in the late 2000s, and reverse mortgaging itself became more conservative, Martirano decided to close his company in 2017 and join American Advisors Group (AAG), to “let them handle the back office and the licensing.” In 2018, he made the tough decision to leave reverse mortgages entirely. That lasted fewer than six months. From there, he worked for two years with Reverse Mortgage Funding before joining Homebridge Financial Services, Hackensack, NJ, in late 2021. At Homebridge, where he serves as reverse lending sales manager, he can help clients find solutions from a range of available products. Along the way, Martirano has made friends throughout the reverse mortgage field. He helped found Independent Reverse Mortgage Originating Companies (IROC) as a platform for smaller companies to share ideas and challenges. “That’s how this industry is,” he says. “It is competitive, but I’ve made so many friends. It’s not cutthroat. It’s a very friendly atmosphere. We all have the same goals. We’re all trying to help people out.” Martirano and his wife of 27 years have three sons. One is in college, studying music at Belmont University. The other two, a high school freshman and junior, are heavily involved in sports, including travel hockey. Martirano grew up as an athlete, playing competitive hockey and baseball in college. As a certified hockey coach, he was a USA Hockey Coach of the Month in 2017. “I have a different approach to coaching,” he says. “I’m more laid back, especially with the younger kids. I try to teach life lessons, trying to associate the hockey discipline with life discipline.” CRMP: Across the Kitchen Table REVERSE MORTGAGE / MARCH-APR I L 2022 17

OVER THE PAST TWO YEARS, COVID-19 has scrambled the way reverse mortgage professionals do business. Along the way, professionals have picked up new tools and techniques. They have discovered new ways to network, for example, and new ways to track the moving parts of a lending process that is increasingly digitized. Networking is perhaps one of the areas most affected by the pandemic. Lenders have had to find new ways to reach potential borrowers—or lean more heavily on existing ways that match the new environment of decreased social interaction, according to several top producers who shared some of their insights during NRMLA’s 2021 Virtual Annual Meeting held in the fall. Personal connections may have been harder to make but they did not lose their importance for Catalina Gonzalez, a branch manager in southern California for Open Mortgage. She just found new ways to develop and nurture them. For example, Gonzalez says, she reached out to clients and asked them to invite her into their churches, senior centers and other social groups. “And because they loved my service and our relationship that we had, they welcomed me to those groups,” Gonzalez says. Gonzalez also has struck up relationships with bankers, who might refer people who don’t qualify for forward mortgages, as well as leaders of area senior centers. “They often encounter people who need help financially,” she says. Gonzalez has gained additional referrals by staying in touch with her clients. It starts with taking detailed notes Catalina Gonzalez Sales Boost Tips Offer Opportunities to Increase Your Closings By Joel Berg 18 REVERSE MORTGAGE / MARCH-APR I L 2022

and learning everything she can about them. She can then send them handwritten notes containing gift cards for the things they love when she wants to thank them for a referral. “It really does wonders for my clients,” she says. Class Act It’s no secret that the public’s general understanding of reverse mortgages often falls short. But the same is true of professionals in areas such as real estate and finance. Matt Harrison, CRMP, a loan consultant for loanDepot (Editor’s Note: Harrison has since changed companies) in Utah and a former real estate agent, didn’t learn of the Home Equity Conversion Mortgage (HECM) program until he had been originating mortgages for more than a year. But he quickly saw their potential, particularly on the purchase side. “I wish I had known about it back when I was actually doing real estate,” he says. He now tries to make sure other real estate agents aren’t missing out. He developed a continuing education (CE) course on HECMs for Purchase, obtained a state license and began pitching his course to real estate offices. “It was amazing to me, right off the bat, the number of offices I was able to get into,” he says. “Whether there was a [marketing service agreement] currently with another lender or not, it did not matter. They said, ‘You know what? We need the CE. Sounds like a great course.’” He was equally pleased at the reaction of the professionals who attended the courses. They stuck around after the class to ask questions and refer people who might benefit from a HECM. Real estate agents also have begun asking for more advanced classes on the topic, Harrison adds. “This is all about getting the information out, getting yourself into a position where you are the expert,” he says. “People will trust you and they’re going to go to you for questions.” Working the Phones Video chat in all its permutations has been the “it” technology of the pandemic. But the telephone remains a vital tool, particularly when following up on sales leads. The key is to quickly win the trust of the person on the other end of the line, who may already be on the defensive, says Ryan Philip, CRMP, a senior reverse mortgage specialist with Longbridge Financial in Bloomfield, NJ. “The first thing I’ve always tried to do is to break down that barrier,” Philip says, citing an example from his own life. After coming home from work and sitting down to dinner, he got a phone call from a phone company salesperson. Philip let the caller know he was having dinner. “And he responded with a question,” Philip says. “He said, ‘What’s for dinner?’” The question broke down the barrier, Philip says, and he heard the salesperson out. Now, Philip says, he sees it as a challenge to get past whatever a potential borrower throws at him and to react without fear. “That’s what I always try to stress,” he says. “Don’t be afraid to ask questions. Don’t psych yourself out before the call.” He also advises not to give up on borrowers who say they have picked another lender. “When I get that, I’ll say, ‘Have you taken a look at some comparisons? Let’s make sure you’re getting a fair deal.’” The borrower often isn’t interested, Philip says. But he says he will follow up three weeks later to ask about the lending process. “I can’t tell you how many deals that has led to because they may have said, ‘Oh, that John was too pushy. I didn’t want to deal with him,’” Philip says. Even after a loan closes, it’s important to remain in contact, adds Harrison. “We need to go into this industry with a completely different mindset. We’re no longer in the industry of selling mortgages, whether they’re forward or reverse. We’re in the industry of helping our clients manage real estate assets over time. And if we have that mindset, we should be talking to our clients at least once a year.” Closing Fast A good loan originator can bring a HECM from application to funding in 30 days. But it can take longer—often for reasons outside the originator’s control. Sales Boost continued on page 20 Ryan Philip Matt Harrison REVERSE MORTGAGE / MARCH-APR I L 2022 19

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