www.nrmlaonline.org P. 24 P. 28 INSIDE: Saving Increases Nationwide Funding Healthcare Costs The official magazine of the National Reverse Mortgage Lenders Association May-June 2022 Volume 15, No. 3 Understanding the Older Americans Act Experts: Loan Officers Should Know How Act Affects Clients
LEADS ARE KNOCKING. IS YOUR DOOR OPEN? Unlock more opportunities with our exclusive Go FAR Guide highlighting 10+ ways to generate leads. Get the guide today visit FARwholesale.com/leadgen or scan the QR code with your phone 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
From the Top Clay Selland, CRMP, President, Signet Reverse Mortgage By Darryl Hicks 12 Those We Help Reverse Mortgages Help Parents, Then Son By Darryl Hicks 32 Features 20 Understanding the Older Americans Act Experts: Loan officers should know how act affects clients By Joel Berg 24 Saving Increases Nationwide Experts explain how reverse mortgages fit into saving trends By Thomas A. Barstow 28 Funding Healthcare Costs Reverse mortgages can cover health-related costs By Thomas A. Barstow Columns 3 In Reverse Help for older Americans comes in many forms By Thomas A. Barstow 5 Steve Irwin: Moving Forward Older Americans Month prompts review of strategic imperatives 6 Board Room Our industry serves a noble purpose By Alex Pistone 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 Pew Research Center: Pandemic prompts retirements May-June 2022 Volume 15, No. 3 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 CRMP: Across the Kitchen Table A Chat With Ellen Skaggs, Reverse National Production Manager, New American Funding By M. Diane McCormick 16
Scribes Meet This Month’s Contributors 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. 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, Well-Behaved Taverns Seldom Make History, explores Pennsylvania pubs where rabble-rousers stirred up trouble, from the American Revolution to Prohibition. Alex Pistone (Board Room, p. 6) is president of Mutual of Omaha Reverse Mortgage. Before that, he was president of Retirement Funding Solutions, which was acquired by Mutual of Omaha in 2018. He has been in the reverse mortgage space for 14 years. He is responsible for all aspects of Mutual of Omaha’s reverse mortgage business, from sales and marketing to operations, growth strategy and business development. Thomas A. Barstow (In Reverse, p. 3, Saving Increases Nationwide, p 24, and Funding Healthcare Costs, 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 and 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 (Understanding the Older Americans Act, p. 20) 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. Darryl Hicks (From the Top, p. 12, and Those We Help, p. 32) joined NRMLA in May 1999 and currently serves as vice president of communications. Hicks writes the Weekly Report newsletter, administers NRMLA’s social media accounts and websites and manages the CRMP designation. HighTechLending, Inc. All Rights Reserved. NMLS #7147 (nmlsconsumeraccess.org). For more information on licensing please visit www.hightechlending.com/compliance-information 2 REVERSE MORTGAGE / MAY- JUNE 2022
In Reverse Help for Older Americans Comes in Many Forms By Thomas A. Barstow LESSONS FROM THE past two years are too numerous to count, especially because the lingering effects of the pandemic will be felt for a long time. Plus, it is difficult to analyze and reflect when the nation is in perpetual realignment mode, jumping from one crisis to the next. It isn’t easy, in other words, looking into a rearview mirror when the view from the front windshield stays cloudy. And maybe, just maybe, some of those lessons weren’t lessons at all. For example, parents, pundits and planners have been telling us for generations that most of us need to do a better job saving, but it took the pandemic to force the issue. American families socked away a record amount of cash during the crisis from a variety of sources. Some money came from stimulus checks but also from the mere fact that there wasn’t much to do during the lockdowns. Some people who kept working figured they might as well keep rolling over the vacation kitty. And then the stock market reached new heights, as did property values, which certainly made folks feel richer. Regardless, as noted in Saving Increases Nationwide, p. 24, much of that “excess saving” will dissipate soon, as people get back into their spending habits or just plain need the money to make ends meet. Already, the nation has been returning to the low saving rates that have existed since at least 1960. Understanding these dynamics means that equity release products remain a viable option for people to supplement Social Security and retirement plans. To paraphrase Loren Riddick, national director of reverse lending for Thrive Mortgage in Alcoa, TN, even if you have some money stashed away, the unknown is the unknown. So, it is better to have a reverse mortgage and not need it, he suggests in the article, than to need it and not have it. While many were saving, others were surviving. That situation is where safety nets created generations ago provide critical assistance to seniors. Oftentimes, these programs operate behind the scenes, with the people doing the work going unnoticed while keeping seniors from suffering during dire times. In Understanding the Older Americans Act, p. 20, writer Joel Berg outlines how policies and programs have been in place for decades to keep our elderly neighbors from becoming hungry, cold or lonely. As several people tell Berg, loan officers who specialize in reverse mortgages need to be aware of these programs and how they are used in their communities. That knowledge can prevent a reverse mortgage from hindering a client’s ability to fully tap into a program with limited eligibility based on income criteria. Ellen Skaggs, CRMP, national reverse mortgage sales manager for New American Funding, recounts just such a case with one of her clients, telling Berg that last-minute adjustments to the loan allowed the client to get the reverse mortgage while preserving the benefits. The Older Americans Act, which passed in 1965, forms the foundation for many programs, from Meals In Reverse continued on page 4 REVERSE MORTGAGE / MAY- JUNE 2022 3
In Reverse on Wheels to the creation of senior centers, where people can gather and enjoy the fellowship of others. “It’s an Act of enormous consequence and will only continue to grow in importance over the next few decades,” Scott Norman, vice president of field retail and industry relations for Finance of America Reverse, tells Berg. “It recognized the idea, even back then, of how expensive it can be to grow older in America.” Of course, people in our industry recognize that, too, and the most successful ones will always keep that primary mission of service in mind. By knowing what is available for seniors in your community, you can become a valuable resource to your neighbors, even if you aren’t going to sell them a reverse mortgage, the article points out. Another outgrowth of the law was the eventual creation of Medicare, which is a main source of health insurance for people 65 and older. The days of goldplated insurance that carries over from a job to retirement are long gone for most Americans. Indeed, I once had a physician tell me that Medicare is now the gold standard for health insurance in retirement because relatively few people get insurance from their old company after 65. Meanwhile, efforts to expand the program under the Biden administration appear to be on hold, largely because an expansion would be costly. A year ago, President Joe Biden was suggesting that the Medicare eligibility age should be dropped from 65 to 62, an unlikely scenario at this point. More importantly, when it comes to health issues in retirement, the expenses might not be what people think. In Funding Healthcare Costs, p. 28, Rich Pinnell, CRMP, a reverse mortgage specialist with Primary Residential Mortgage Inc., points out how a healthy spouse might need help with added expenses and upkeep after his or her spouse falls ill. Understanding the specific needs and issues of a client will help a loan officer become a problem solver, Pinnell suggests. That approach is what will endear reverse mortgage products to more people, including financial planners and other industry partners who see the value of releasing equity from homes. Alex Pistone, who wrote the Board Room column in this edition—Our Industry Serves a Noble Purpose, p. 6— nicely sums up the interaction between our industry and the national goal of ensuring that seniors live a dignified retirement. While noting that May is Older Americans Month, Pistone points out how this industry is part of the solution. “We have the ability to help our fellow Americans remain in their homes with dignity and independence, improve and extend their retirement outlook, move closer to their loved ones, and even enhance their health and wellness,” Pistone writes. “The solutions that we help facilitate are meaningful.” In Reverse continued from page 3 (800) 542-4113 PRClosings.com PRCyour success is our priority PARTNER WITH A COMPANY THAT WANTS TO HELP YOU SUCCEED! As a proven industry leader, our track record speaks for itself. With over 14 years of reverse-specific title and settlement experience and more than 200,000 transactions closed, we have the skills and tools to help you succeed. 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! 4 REVERSE MORTGAGE / MAY- JUNE 2022
Moving Forward Older Americans Month Prompts Review of Strategic Imperatives We Can Help Our Older Americans Age Their Way By Steve Irwin, President, NRMLA “To me, ideas are worthless unless executed.” —Steve Jobs AS U.S. HOMEOWNERS continue to age and retire in greater and greater numbers, one thing is clear: those homeowners want to age their way, including aging in place. According to the research shared by the Department of Housing and Urban Development’s (HUD) Office of Policy Development and Research, supporting aging in place may realize significant cost savings for families, federal and state governments and the nation’s healthcare system. These studies also indicate that effective aging in place has health and emotional benefits over institutional care. While the notion of aging in place continues to build momentum, so, too, do the questions surrounding financing the retirement of an increasingly older population. As we can see from the research gathered by the Aspen Institute’s Financial Security Program: • Many new retirees can’t keep up with pre- retirement spending levels; • More of today’s retirees are dedicating cash flow to debt service, compared to previous generations; • Many on the cusp of retirement don’t know what their Social Security checks will contain; • Waiting to claim Social Security benefits provides a substantial financial advantage, but most retirees make poor decisions about when to make their claim; and • Spending in early retirement can be unpredictable. To help ameliorate the risks and concerns surrounding the ability of senior homeowners to age their way, it is critical that housing wealth is carefully and responsibly considered when developing a comprehensive retirement plan. For many, housing wealth is their greatest asset, and tapping that equity, under the right circumstances, will enable a secure path for aging. How then can the various reverse mortgage programs further enable homeowners to use their home equity responsibly? What are the primary barriers to broadening accessibility to reverse mortgage programs in ways that strengthen the Mutual Mortgage Insurance Fund and support HUD’s housing goals and the mission of the Home Equity Conversion Mortgage (HECM) program? How can we best broaden the efficient distribution of the HECM? These are but a few of the strategic imperatives that NRMLA and its board are carefully considering during Older Americans Month. Strategy development is only one part of the equation, however. The answers to the questions posed by these imperatives may require entirely new service packages. The solutions will necessarily need to be game-changing, relatively easy to implement, and they must absolutely align with any given administration’s goals. The execution will be so much more important than the bright ideas. This is a monumental task, but together, NRMLA’s leadership and its membership can properly identify what is achievable. We can help our older Americans age their way. Steve Irwin REVERSE MORTGAGE / MAY- JUNE 2022 5
Board Room Our Industry Serves a Noble Purpose By Alex Pistone AS WE OBSERVE Older Americans Month this May, I cannot help but reflect on the incredible elders who have shaped me into who I am today. I am mostly grateful for the wisdom and knowledge that was shared with me and the work ethic and resolve that was modeled before me by some extraordinary people. I know I am not alone in my gratitude. The generations that came before us are truly remarkable. I often tell our team at Mutual of Omaha Mortgage just how fortunate we are to be part of an industry and profession that can improve the lives of these Americans. We have a noble purpose. We have the ability to help our fellow Americans remain in their homes with dignity and independence, improve and extend their retirement outlook, move closer to their loved ones and even enhance their health and wellness. I have seen how financial stress can have a direct impact on the physical, mental and emotional health of our customers. What other financial product has the potential to make such a dramatic and positive difference in people’s lives? The solutions that we help facilitate are meaningful. I have the pleasure of reviewing customer surveys, where I see satisfaction rates that are consistently positive—off-the-charts positive. Over the years, I have received so many thank-you letters, and even gifts, from our customers, who express that their quality of life and peace of mind has been improved—in some cases, dramatically so. If you have been in this industry for any length of time, you know exactly what I am talking about. We all get to do this for a living. I feel blessed to be a part of it. Unfortunately, the majority of the American population, even financial professionals with good intentions, continues to misunderstand the simple yet powerful concept of a reverse mortgage. This truly is a shame. The result is misdirected criticism but also missed opportunities for older Americans who could benefit from unlocking their housing wealth. We can help so many more— millions more. Knowledge of the truth of a reverse mortgage continues to be our biggest challenge as an industry and our largest opportunity. It is up to us to take on that challenge. If we expect to grow as an industry, making the impact we know to be possible, we must focus on education on a large scale. Mutual of Omaha Mortgage is taking on that challenge as we look toward the future. We should all have pride in the good work that we do, because it is good work. We should remain grateful for the opportunity to make a difference. However, we should not be content, because together there is so much more that we can do. Alex Pistone 6 REVERSE MORTGAGE / MAY- JUNE 2022
With our innovative lineup of Equity Elite products, RMF partners write approximately 3X more condo business than with HECMs alone. Are eligible for approved & non-FHA-approved condos, including age-restricted communities Are available to customer as young as 55+ in select states Offer loan amounts from as little as $50K up to $4MM Utilize simplified proceed and asset qualification * ® † ‡ *Not applicable in all states; some states may impose a higher age requirement. Visit www.reversefunding.com/equity-elite for details. †Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details. ‡This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency. Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who may also be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state. Visit www.reversefunding.com/equity-elite for details and additional disclosures. NOT FOR CONSUMER USE. ©2022 Reverse Mortgage Funding LLC, 1455 Broad Street, 2nd Floor, Bloomfield, NJ 07003, 1 888-494-0882. Company NMLS ID: #1019941. For licensing information, go to: www.nmlsconsumeraccess.org. Arizona Mortgage Banker License #0927682; Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act; Loans made or arranged pursuant to a California Financing Law license; Georgia Mortgage Lender Licensee #36793; Massachusetts Mortgage Lender License #ML1019941; Licensed by the New Jersey Department of Banking & Insurance; Licensed Mortgage Banker-NYS Department of Financial Services -in-state branch address 700 Corporate Blvd, Newburgh, NY 12550; Rhode Island Licensed Lender; Texas Mortgage Banker Registration in-state branch address 6044 Gateway East, Suite 236, El Paso, TX 79905. For California consumers: For information about our privacy practices, please visit https://www.reversefunding.com/privacy. Not all products and options are available in all states. Terms subject to change without notice. Certain conditions and fees apply. This is not a loan commitment. All loans subject to approval. L4387-Exp032023 Let us help grow your business with flexible products that:
NRMLA Submits Comments To HUD NRMLA submitted two sets of comments to the Department of Housing and Urban Development (HUD) during the last week of January, one that seeks changes to loan level servicing reviews in the Federal Housing Administration’s (FHA) Defect Taxonomy and the other highlighting important issues related to updating the draft HECM Handbook. In the first letter, NRMLA urged FHA to specifically recognize, and incorporate, the curtailment of property preservation expenses and the loss of debenture interest as a remedy and category of financial remediation within the Defect Taxonomy. With regard to the HECM Handbook, NRMLA compiled more than 180 comments that were documented in an Excel spreadsheet and submitted through the Department’s Drafting Table, along with a cover letter that focused on several items the association’s committees felt were important. Members can view both sets of comments by logging in to www.nrmlaonline.org. Senior Home Equity Exceeds Record $10.1 Trillion Homeowners 62 and older saw their housing wealth grow by four percent, or $396 billion, in the third quarter to a record $10.19 trillion from Q2 2021, according to the latest quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI). The RMMI rose in Q3 2021 to 356.37, another all-time high since the index was first published in 2000. The increase in older homeowners’ wealth was mainly driven by an estimated 3.7 percent, or $440 billion, increase in home values, offset by a 2.2 percent, or $44 billion, increase in senior-held mortgage debt. “Survey after survey has shown that one of our biggest fears is running out of money in retirement and having to subsist solely on Social Security,” says Steve Irwin, NRMLA president. “That’s why housing wealth should be considered with other financial assets when developing a comprehensive retirement plan.” Presidential Proclamation Could Help Troubled HECM Borrowers President Joe Biden issued a proclamation that extends the COVID-19 national emergency one year from Feb. 18, unless otherwise terminated before that date. The national emergency, which was first declared on March 13, 2020, and has been extended at various times over the past two years, was set to expire on March 1, 2022. In a joint statement, Servicing Committee Co-Chair Gail Balettie, senior vice president, client satisfaction at Celink, and Leslie Flynne, director, PHHMortgage Services, said: “The guidance that HUD provided via ML 2021-24, coupled with this continuation of the presidentially declared national emergency, continues to allow HECM servicers to assist senior reverse mortgage borrowers who have been impacted by the COVID-19 pandemic. Servicers have been working closely with state administrators of Treasury’s Homeowner Assistance Fund (HAF) program. We anxiously await the opening of application portals for all states so that our impacted seniors can have the opportunity to apply for HAF funds. Reverse mortgage servicers are committed to working with our senior borrowers to avoid foreclosures.” In addition to the proclamation, the Federal Housing Administration published a technical update to Mortgagee Letter 2021-15 that will provide additional time for borrowers economically impacted by the COVID-19 pandemic to seek relief. Details were provided in Mortgagee Letter 2022-02, which was published on February 7. People are talking about ... What’s News EVERYTHING NEW YOU NEED TO KNOW 8 REVERSE MORTGAGE / MAY- JUNE 2022
State Reverse Mortgage Legislative Updates • New York Gov. Kathy Hochul signed legislation into law that amends the reverse mortgage cooperative housing bill she signed in December by requiring lenders to obtain letters of credit for every loan they make on a co-op unit. The original law exempted lenders from having to meet this requirement, but Senate Bill 7724 removed the exemption. NRMLA sent letters to the governor’s office and to the lawmakers who were behind the amendment warning that the current letter of credit requirements “will prevent any reverse cooperative apartment unit loans from being made in New York, because no lender will be able to meet the authorized lender requirements without those exemptions.” NRMLA will continue working with New York lawmakers to reinstate the exemption. Until the exemption is reinstated, lenders that offer private-label reverse mortgages in New York informed NRMLA that they will not be offering their products on cooperative housing. • Massachusetts Gov. Charlie Baker signed a supplemental spending bill on February 12 that reinstates video and telephone counseling for reverse mortgage borrowers until July 15. In-person counseling resumed in Massachusetts on December 15, which complicated borrowers’ ability to be counseled given the limited number of counselors who are willing to meet in-person, especially after the onset of the omicron variant. NRMLA and our members in Massachusetts will continue advocating for legislation that allows for video/telephone counseling on a permanent basis. • NRMLA sent a letter to 18 lawmakers in Pennsylvania who have co-sponsored legislation (House Bill 2316) that would implement new counseling requirements. While NRMLA is generally supportive of the bill, the association identified several issues that need to be fixed. Among them, the bill would require prospective borrowers to be counseled by a counseling agency, approved by the Department of Housing and Urban Development (HUD), domiciled in Pennsylvania. At the moment, there are only five HUD-approved Home Equity Conversion Mortgage (HECM) counseling agencies in the commonwealth. NRMLA commented that under the HECM program, lenders must provide prospective senior applicants with a list of HUD-approved counseling agencies, including national intermediaries, that provide counseling services over the phone and can be located anywhere in the country. NRMLA added that, in some cases, the nearest counseling agency could be located in an adjoining state. For these reasons, NRMLA has asked the lawmakers to remove the requirement that the counseling agency must be based in Pennsylvania. NRMLA Adds Jobs Board to Member Site Looking to fill a position in your company? Use NRMLA’s Jobs Board to post the position for free. Both members and nonmembers can view the Jobs Board on www.nrmlaonline.org, but new positions can only be posted by members. To post something, all you need to do is select “Post a Job” and log in with your username and password. If you have any questions about using this new service, please contact Membership Services Coordinator Maital Kaminer at mkaminer@dworbell.com. The press is talking about ... Interview Discusses How Reverse Mortgages Grow as Retirement Tool In an interview with ThinkAdvisor.com, Phil Walker, vice president of strategic partnerships at Finance of America Reverse, shared his views on the growing importance of reverse mortgages as a retirement planning tool and the results of a white paper that he co-authored with Barry What’s News continued on page 10 REVERSE MORTGAGE / MAY- JUNE 2022 9
and Stephen Sacks that was published in the December 2021 issue of the Journal of Financial Planning. When asked about the significance of the white paper, Walker said, “It’s momentous for retirees, for the reverse mortgage industry and for the wealth management industry. For the retirees, it pulls a lot of risk from their existing retirement plan. And all of a sudden, the wealth management industry has a reason to engage us because, as we know, their responsibility isn’t just growing wealth; it’s reducing risk. We can do that on a level that hasn’t been discovered since modern portfolio theory was introduced in 1952. After all these years, we have a new fundamental in risk reduction.” Read the full interview at bit.ly/35uEvmw. Reverse Mortgages as Part of Overall Plan Another financial planning resource, WealthManagement. com, published an article that provided background information on reverse mortgages and offered insights from retirement expert Wade Pfau on potential applications as a financial planning tool. “If you can either just lower your withdrawal rate from your investments a little bit, or avoid distributions after a market downturn, that has such a huge positive impact on the subsequent portfolio value,” says Pfau. “That’s really the secret sauce of the reverse mortgage. You can’t look at the reverse mortgage in isolation, you need to consider its impact on the overall plan, and specifically the investment portfolio.” Read the full article at bit.ly/33TX8Qm. In Washington, they’re talking about ... Mandatory Use Date for FHA Catalyst Extended to 2023 The Federal Housing Administration (FHA) extended the mandatory use dates for mortgagees to submit appraisals for single-family forward and reverse mortgage endorsements through the FHA Catalyst: EAD Module. Details were published in Mortgagee Letter 2022-04 on February 15. Mortgagees should note the revised transition dates below: Effective on and after March 14, 2023, appraisal delivery through the FHA Catalyst: EAD Module is mandatory for all cases unless a previous appraisal version has been submitted to the legacy EAD portal. • For cases with a previous appraisal submission in the legacy EAD portal before March 14, 2023, appraisal resubmissions may continue to be delivered through the legacy EAD portal until April 17, 2023. • After April 17, 2023, appraisal submissions for all cases, regardless of previous submission status, must be delivered through the FHA Catalyst: EAD Module. Ginnie Mae Publishes LIBOR Index Transition Reference Guide Ginnie Mae published a LIBOR Index Transition Reference Guide to assist stakeholders in preparing for the transition away from the London Interbank Offered Rate to a replacement index between now and the LIBOR cessation date of June 30, 2023. The guide included sections on the Home Equity Conversion Mortgage program that summarized what has been done thus far to begin the transition process. The guide further noted, “A transition plan for legacy LIBOR HECM mortgage-backed securities (HMBS) is under analysis. No LIBOR transition policies with respect to legacy LIBOR HMBS have been released.” Access the reference guide at bit.ly/3skgaZp. HUD Issues HECM Exam Waiver The Department of Housing and Urban Development (HUD) issued a temporary waiver that allows reverse mortgage counselors who were required to take the Home Equity Conversion Mortgage (HECM) exam last year, but couldn’t, to remain on the counselor roster. Counselors must take the HECM exam every three years, but the exam was unavailable for several weeks at the end of 2021 while HUD found a replacement vendor What’s News continued from page 9 10 REVERSE MORTGAGE / MAY- JUNE 2022
to manage the exam process. The HECM Roster exam is now available and can be accessed at hecmexam.org. Those HECM counselors that this waiver applies to have been extended in FHA Connection through June 30. Senate Banking Committee Votes on FHA Commissioner Nominee On January 19, the Senate Banking Committee voted a second time on the nomination of Julia Gordon to be the next assistant secretary for Housing/Federal Housing Administration Commissioner. The vote was deadlocked at 12–12, but there’s still a chance her nomination will be brought to the full Senate for a final vote. In the event of a 50–50 tie, Vice President Kamala Harris will cast the deciding vote in favor of the nomination. Gordon, who serves as president of the National Community Stabilization Trust, was nominated in July 2021 by President Joe Biden. When her nomination before the Senate Banking Committee ended in a tie vote in October, efforts to bring her nomination to the full Senate for a vote didn’t happen before the end of 2021. Biden was forced to renominate her again in early January. And now you’re up to date. 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. nwecorp.com/nrmla Growth starts here Corporation NATIONWIDE Equities For industry professionals only. NMLS #1408 Reverse mortgages done right. • No B.S. Underwriting • Competitive Pricing • No Commission Caps • Volume Bonuses • Use your own AMC • Liberal Exceptions • Unbeatable Service • Support Team Access Send us a loan and see for yourself. NRMLA-May_June Print APPROVED.indd 1 3/24/2022 11:33:23 AM REVERSE MORTGAGE / MAY- JUNE 2022 11
CLAY SELLAND, CRMP, began his professional career as a certified public accountant with a national firm, which led to senior finance and strategy roles with Longs Drug Stores, Cost Plus World Market and several other startup retailers. Looking to get out of the corporate world, he formed Signet Mortgage Corp., in Danville, CA, in 2002. Four years later, Clay helped his aunt get a reverse mortgage, and he has been hooked ever since. Clay begins almost every day with a three-plus mile hike to his “tree” in the Last Trampas Regional Wilderness before sunrise with his border collie, Rori. Clay and his wife, Jai, enjoy traveling all over in the “Skybox”—a decked-out sprinter van. He enjoys helping people and is on the board for the Financial Planning Association of the East Bay, leading pro-bono activities at local libraries and for underserved members of the community. Reverse Mortgage Magazine sat down with Clay to learn more about his reverse mortgage career and what has made him successful for these many years. Reverse Mortgage: How did you get into the reverse mortgage business? Clay Selland: I started Signet Mortgage in 2002 after a career as a CPA and in corporate finance. Then, shortly after that, when the loan limit became relevant in California, I did my first HECM reverse mortgage in 2006 for my aunt who lives nearby. That loan continues to be a blessing to this day. She’s 85 and lives in the same single-story home that we financed way back when. She gets her check every month and is a happy camper. RM: That’s a long time to have a reverse mortgage. Has she refinanced? CS: It’s a good example of the underlying strength of a reverse mortgage. Her property is located in Stockton, CA. In 2008, her home’s value plummeted as a result of the Great Recession. Her home is still underwater, but she still gets that check every month exactly as the program was designed. RM: Do you have a particular approach to selling reverse mortgages that has worked over the years, or is it continually evolving? CS: I don’t like to sell. I would not be good at it. My professional background and my personality are far from being a salesperson. I studied accounting and finance in school and became a CPA and spent 15 years in corporate finance. My approach has always been to find ways to help people and clearly explain ideas and options. What I enjoy most is educating a client, financial advisers or family members about how a reverse mortgage can improve retirement plans. If it makes sense for all parties involved, we make it happen. If it’s not right for them, we have had the opportunity to share ideas and changed perceptions about the application of a reverse mortgage, and those clients have still become advocates. Clay Selland, CRMP, President, Signet Reverse Mortgage By Darryl Hicks From the Top Clay Selland 12 REVERSE MORTGAGE / MAY- JUNE 2022
RM: Has COVID-19 impacted the types of borrowers you have traditionally worked with or their reasons for wanting to get a reverse mortgage? CS: Not that I’ve seen directly. I have had several clients retire earlier than they planned. The part that has changed is the willingness and preference for clients to meet over Zoom. I was initially hesitant to use Zoom. I enjoy the personal contact but discovered that I can have more frequent touches with clients utilizing Zoom. The clients who want to get together, we’re still willing to do that, too. RM: As a small-business owner, what has been your biggest professional obstacle thus far? How did you overcome it? CS: It’s all about finding the right people who share similar values and are willing to sign on to what we’re accomplishing for our clients. That led to us allowing staff to work remotely six months ahead of the pandemic. The first person was Sandy, who’s worked with me for over ten years. She was set to retire, but she said, ‘If you give me a computer, I’ll help out,’ and she’s still helping out two years later. She’s awesome. That’s the standard we’re trying to achieve. Remote working has allowed me to find great staff who are not restricted to the local area and allows us to accommodate a range of family situations and make it positive for everybody. RM: That’s interesting how you adopted remote working before it became the norm. CS: We were very fortunate. Our industry has had that flexibility, but now it’s a necessity. Many people don’t realize how working remotely, with all the tools, can really be effective. Having good people, that’s the bottom line. We need good people because the client experience is the most important thing to me. RM: What do you consider to be your greatest accomplishment in your career to date? CS: I’ve actually had three professional careers. All were building blocks and experiences. I would say my greatest career accomplishment is that I’m able to make a good living at something I thoroughly enjoy. I don’t know how many people can say that. It doesn’t feel like work. It is a great personal reward every day to help people. My business is entirely referral-based, so that must mean I did something right along the way. People associate a CPA with numbers, but it’s more problem-solving and getting a transaction done in a way that maximizes the most benefit to a client. Being able to help somebody who doesn’t have financial experience or background and help put pieces together is really a lot of fun. Although I have a pretty good sense early on what might benefit a client and how the transaction should be structured, I’ve got to educate and help bring them along to that same point and give them all the options we can think of. When it comes together, it’s very rewarding. A lot of clients have said, ‘I had no idea we could do this,’ which is the coolest thing for me to hear. Usually they start out with, ‘Huh, if we could pull this off.’ I know what is possible, but you can’t say, ‘Just sign here.’ It’s the journey along the way that’s fun and coaching clients along the path towards improving monthly cash flow, providing a safety net for the future or getting their dream retirement home is what makes what I do rewarding. RM: If you could offer one piece of advice to someone who wants to get into the reverse mortgage business, what would it be and why? CS: I suggest working alongside someone who knows the business well. There’s plenty of resources to learn the technical aspects of how to do reverse mortgages between NRMLA and all the lenders. But I think a much larger part of the business is understanding how to strategically apply a reverse mortgage. It’s different than the forward mortgage side, where the goal can be fairly straightforward: to purchase a house or refinance to get a lower rate or reduce a monthly payment or to cash out. In a reverse mortgage, you must pay attention to a lot more variables in a retirement plan—personal, family and financial. The loans themselves are more straightforward, but you need to understand how to apply it to the client’s overall financial plan. Working with someone who is successful, who has been around a while, can help a loan officer who’s new to the business better understand how the reverse mortgage fits within a client’s overall retirement plan and, more importantly, how it doesn’t and what you shouldn’t do. It’s equally important to learn how to work well with seniors. I took care of my grandmother pretty much full time from when she was about 85 to when she passed away at 104. I guess I was the From the Top continued on page 14 From the Top REVERSE MORTGAGE / MAY- JUNE 2022 13
go-to grandchild. Those experiences helped me develop insights and skills that are hard to obtain any other way. For most people in the forward mortgage business, it’s quick, quick, quick. In the reverse mortgage business, it’s a different cadence, and learning that from someone who has the experience will make a new loan officer successful sooner. RM: You became a Certified Reverse Mortgage Professional four-and-a-half years ago. What was your motivation for becoming a CRMP? How has it impacted your business? CS: I think the CRMP is very valuable to the business. Relatively few originators have earned it. The CRMP is an honest certification. There’s work to be done before you can submit your application. There’s ongoing work to be done to maintain it. Here is an example of how it has benefited me: There’s a small group of CRMPs from the best broker shops around the country who have a call every Thursday morning to talk shop and help each other with issues, strategies and industry changes, which helps us better serve our clients. I also maintain a current CPA license in California, so I have that propensity to stay educated, current and relevant. RM: Given your involvement with the East Bay chapter of the Financial Planning Association, do you see financial planners as a key ally in growing the reverse mortgage business? CS: Absolutely. I currently serve as a pro bono co-chair and treasurer, which is my way of giving back to the community. My pro bono activities include meeting one-on-one with people who need financial advice but don’t have the means to pay for it. I’ve been involved with the East Bay chapter for a long time, and I’ve found every conversation I’ve ever had with a financial planner to be beneficial for both of us. There is a multitude of elements to a complete financial plan. Considering home equity as a key piece in every financial plan is somewhat new, but it’s gaining acceptance. In my conversations with financial planners, we get fairly deep into the pros and cons. Every conversation is positive. I’ve been successful in converting almost 100 percent of the skeptics into advocates. Usually, when I start a conversation, I often start with, “Did you know you can purchase a home with a reverse mortgage?” and the response is, “What? Why would you do that?,” which leads into a 15-minute conversation about buying a better home with no mortgage payment. Eventually, the conversation leads into how a reverse mortgage can create a more secure and flexible financial plan. RM: Thank you. Do you have any professional goals for 2022 that you’d like to share? CS: I’d like to make reverse mortgages a larger percentage of my business, because it’s more fun and rewarding. One of my favorite clients was a couple in their late 50s who refinanced their forward mortgage with me twice. They were still working, but on these occasions, I mentioned to them that they should start thinking about a reverse mortgage for when they retire. I ended up doing a refinance of their home when they retired and a HECM for Purchase when they moved to a retirement community a few years later. All my reverse mortgage clients are advocates for me—they love the result—and, in every case, it is helping them a lot in retirement. From the Top continued from page 13 From the Top TIMING IS EVERYTHING. WE’LL HELP YOU GET IT RIGHT. Every day, thousands of Americans turn 62, becoming eligible for a reverse mortgage and unlocking new ways to: ✓ Eliminate monthly mortgage payments ✓ Extend retirement savings ✓ Pay for long-term care insurance ✓ Buy a home SALESBOOMERANG.COM Get Reverse Mortgage Alerts Don’t miss the chance to help borrowers manage expenses in retirement. 14 REVERSE MORTGAGE / MAY- JUNE 2022
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THE ELDERLY WOMAN lived in a home worth $360,000 but had only $500 in monthly income and a hole in the roof that required repair. When Ellen Skaggs, CRMP, learned of her plight, she lined up a reverse mortgage and found a contractor willing to make the repairs in advance and accept escrowed payment from the proceeds. No one else had seen a way out of the dilemma, despite the valuable asset the woman had in her home. She stayed in that home and got another $500 monthly income from the reverse mortgage. “I love puzzles, I guess,” says Skaggs. “I love to put the pieces together. I thrive off of it. It just takes a little imagination.” Skaggs started her mortgage career with firsttime homebuyers, specializing in VA loans for Vietnam veterans. From there, she climbed the learning ladder, adding Federal Housing Administration, Fannie Mae and Freddie Mac loans to her portfolio. “If you can become a student of the business, then you’re going to survive,” she says. However, advancing her career meant managing people—21 loan officers at one point—instead of working directly with clients. In 2011, she joined New American Funding for the chance to return to her roots. Her desk happened to be near the offices of the firm’s founders, Rick and Patty Arvielo, who overheard her discussing reverse mortgages. They asked her to take charge of reverse mortgages and lead a nationwide expansion of the division. “I took on that responsibility, and they have created a position that is beyond my wildest dreams of being happy at a job,” Skaggs says. She and her hand-picked team of six loan officers perform reverse mortgages nationwide. Clients can receive personalized, face-to-face services at local branches, and Skaggs is licensed in 37 states. Now that she is in her 70s, she relates to the circumstances of her clientele, just like those first-time buyers early in Solving ‘Puzzles’ for People Appeals to This CRMP A Chat With Ellen Skaggs, Reverse National Production Manager, New American Funding By M. Diane McCormick Ellen Skaggs CRMP: Across the Kitchen Table 16 REVERSE MORTGAGE / MAY- JUNE 2022
her career. “The owners of New American are very, very protective of the senior population and want to make sure that they’re given fair and accurate information,” she says. “We get thank-yous from our clients all the time.” The relationship with customers continues even after the paperwork is done. Skaggs and her team send birthday cards and share recipes. The commitment to clients’ well-being pays off in customer loyalty and return business. As past chair of the Orange County chapter of the National Aging in Place Council, Skaggs learned the details of user-friendly spaces for older homeowners, from wheelchair navigability to counter heights. She tells her loan officers, who perform only reverse mortgages, “You have to immerse yourself, live, eat and breathe reverse mortgage in order to understand this loan and this client.” A trip to the grocery store reminds her why she is passionate about reverse mortgages. There, she sees elderly shoppers on a fixed budget, buying a full cart of food when their Social Security checks arrive but getting by with only the essentials the rest of the month. “Not everybody needs to have a reverse mortgage, but for a lot of people, it’s a really beneficial tool,” she says. Other clients leverage reverse mortgages as a retirement tool, establishing lines of credit for help with daily cleaning, laundry and other needs. “They have the ability to use their home to stay at home,” she says. Today’s seniors are “pretty savvy” and want to make their own decisions. Family, friends and financial planners are welcome to join calls and meetings. Increasingly, those financial planners are viewing reverse mortgages as another retirement tool to make a portfolio work better or free up pension dollars for daily expenses that would otherwise be siphoned off to pay the mortgage. One of Skaggs’ clients lived in a $1.3 million beachfront home in California, but a balcony in disrepair was too dangerous to venture onto. Once again, Skaggs brokered an agreement from a contractor willing to do the work and wait for payment from money put into escrow from the reverse mortgage. “It doesn’t matter where you are on the homeowning spectrum,” says Skaggs. “It doesn’t matter if it’s someone with the lowest income or the lowest-valued house, or if it’s high value.” Today, a kind of perfect storm—lingering uncertainty from the pandemic, rising inflation driving up the costs of daily essentials, and record-high home values—is piquing renewed interest in reverse mortgages. “I had 14 calls by the time I was up and working this morning, from all across the country—Tennessee, Virginia, Maine, North Carolina,” Skaggs notes. “People are asking, ‘Can I get a reverse mortgage?’” Before she found her calling in the mortgage industry, Skaggs’ life path wove from delivering wild animals for Lion Country Safari to waiting tables at a Utah resort. When a former colleague from a restaurant in her hometown of Newport Beach, CA, offered her a job back in her home region of San Bernadino doing mortgages, she made the leap. The first person she met was a loan officer named John Skaggs. Thirteen weeks later, they got married. They have been married for 37 years and colleagues the whole time. Today, he is Skaggs’ Spanish-speaking loan representative. One of their two sons has been working with them since he was 15 and is now national operations manager for New American Funding’s reverse mortgage division. Skaggs’ drive to become a Certified Reverse Mortgage Professional (CRMP) around 2015 was inspired by her belief in being “a student of the business.” At her urging, three of her team members have also become CRMPs, and she hopes to have an all-CRMP team. “The more you invest yourself in it, the better you are able to establish an articulate vision and serve the needs of any individual,” she says. “I think the CRMP puts me up above and beyond the average loan officer who’s just doing reverse mortgages for no real, passionate reason.” Most consumers don’t yet know what a CRMP is, Skaggs believes, but that’s why she wears her CRMP lapel pin and puts the credential in her email. If a prospective client seems leery, she might bring up CRMP and its meaning: “That I’m held to a higher standard of ethics and a higher standard of information than people who have not invested in themselves.” What is Skaggs’ motivation? Simply doing the job right, educating clients and prospective clients and providing a listening ear. “The motivation, in my opinion, is that I want to treat people the way I want to be treated,” she says. CRMP: Across the Kitchen Table REVERSE MORTGAGE / MAY- JUNE 2022 17
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