www.nrmlaonline.org The official magazine of the National Reverse Mortgage Lenders Association November–December 2022 Volume 15, No. 6 Back to Basics Experts: HECMs Have New Appeal in Tough Market INSIDE: Tracking State Laws From Start to Closing P. 24 P. 28
“Great brochure! It’s very clear and simple to go through. We love it.” — FAR Partner With over 40 new pieces of expertly designed marketing collateral, we’re addressing borrower needs, answering their most asked questions, and tackling the toughest topics – all to help you sell more. See our new digital sales room farwholesale.com/sellmore A Year of Elevating Partner Marketing 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 Mark Reeve, vice president– head of reverse mortgage lending, Plaza Home Mortgage Inc. By Darryl Hicks 12 Those We Help Reverse mortgage funds retirement in Hawaii By Darryl Hicks 32 November/December 2022 Volume 15, No. 6 Contents CRMP: Across the Kitchen Table A chat with Melinda Hipp, CRMP, area sales manager for Texas & Oklahoma, Mutual of Omaha Reverse Mortgage By M. Diane McCormick 16 Features 20 Back to Basics Experts: HECMs have new appeal in tough market By Joel Berg 24 Tracking State Laws New York co-op law, other rules pass, as experts prepare for 2023 By Joel Berg 28 From Start to Closing Pros give tips on getting loans across the finish line and beyond By Thomas A. Barstow Columns 3 In Reverse What’s old has new appeal for 2023 By Thomas A. Barstow 5 Steve Irwin: Moving Forward Embrace change—even when it’s unanticipated 6 Board Room Reverse mortgages may be the winners in a crisis By Kristen Sieffert Departments 2 Scribes Meet this month’s contributors 8 What’s News Get up to date on the industry, the press and Washington, DC 34 Member News/Who’s Who in Reverse PUBLISHER Peter Bell pbell@dworbell.com SENIOR EDITOR Thomas A. Barstow thomas.barstow@theYGSgroup.com ASSOCIATE EDITOR Darryl Hicks dhicks@dworbell.com MANAGING EDITOR Therese Umerlik therese.umerlik@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 Christel Emenheiser 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 Therese Umerlik (therese. umerlik@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 ©2022 National Reverse Mortgage Lenders Association
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, WellBehaved Taverns Seldom Make History, explores Pennsylvania pubs where rabble-rousers stirred up trouble, from the American Revolution to Prohibition. Kristen Sieffert (Board Room, p. 6) is a purpose-driven leader, passionate about finding ways to inspire others to dream bigger and create the lives of their dreams. In her current role as president of Finance of America Reverse, she is committed to providing actionable retirement solutions to individuals so they can experience better outcomes and more joy during their golden years. Thomas A. Barstow (In Reverse, p. 3, and From Start to Closing, 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 (Back to Basics, p. 20, and Tracking State Laws, p. 24) 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, communications. Hicks writes the Weekly Report newsletter, administers NRMLA’s social media accounts and websites, and manages the CRMP designation. 2 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
In Reverse What’s Old Has New Appeal for 2023 By Thomas A. Barstow AS WE PUBLISH the last edition of Reverse Mortgage for 2022, we spend some time peering into the New Year. This is something we have done the past few years— looking ahead well before the calendar turns and while recent lessons and trends remain fresh. The year 2022 has been filled with what most business professionals dread—uncertainty. Uncertainty can be paralyzing. What should we do if we don’t know where the economy is headed? What will state governments do as they tinker with our products? What is the best course for closing loans in this environment? The uncertainty is sure to remain with us, including inflation, interest rates, the job outlook, housing prices and the fluctuating stock market. Those dynamics will keep everyone guessing. As you will find in this issue, however, leaders in the reverse mortgage industry aren’t paralyzed. They keep moving forward, adapting to change and looking for new opportunities. In our cover story Back to Basics (p. 20), we hear from Ed Robinson, president and chief operating officer of American Advisors Group (AAG). Robinson says 2023 is a perfect time for reverse mortgage professionals to go back to their roots with traditional HECMs. “Getting back to our knitting,” as Robinson calls it during his interview with writer Joel Berg. Growing the industry has been top of mind for industry leaders for years now, but 2023 will offer opportunities to continue marketing HECM products as seniors and their advisers look for safety nets to get them through the unknown. Robinson makes those observations while also pointing out that AAG intends to roll out new private-label products in 2023. We also know there is an encouraging statistic for people at or nearing retirement: The equity in their homes continues to grow. That alone is a reason to be optimistic in 2023, James “Jay” Wright, a partner at Birmingham, AL-based law firm Bradley and a member of NRMLA’s board of directors, tells Berg in the cover story. Change certainly will come in 2023, everyone seems to agree. That will include more guidance—if not new regulations—on appraisals. A new HECM Handbook will be out. Interest rates might stabilize—or not. And state governments will continue to tweak regulations, even if their changes aren’t needed. The article Tracking State Laws (p. 24) explores that situation. While some changes help our customers obtain reverse mortgages, other ideas hinder those efforts. NRMLA’s attorneys will continue monitoring those trends and outline what is likely to be debated next year. Facing the headwinds is what NRMLA does for its members, Steve Irwin, NRMLA president, writes in his In Reverse continued on page 4 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 3
column Embrace Change—Even When It’s Unanticipated (p. 5). Irwin assures NRMLA members that the organization and the industry are no strangers to change. The coming year will be full of challenges industry leaders will handle—even those that are unanticipated. To continue to help loan officers perfect their craft, we also have an article that recaps some of the pointers made during a NRMLA seminar in Baltimore this summer. The article, From Start to Closing (p. 28), reviews the panel discussion of loan officers and executives who have more than 100 years of combined experience among them. Those leaders include Patty Wills, CRMP, who moderated the discussion. Wills, national reverse mortgage sales director at Open Mortgage, and the other panelists make a point of reinforcing what has been a maxim in the industry: Customer service begins and ends with empathy and truly caring about the clients we serve. We also hear from Mark Reeve, vice president–head of reverse mortgage lending at Plaza Home Mortgage Inc. In the From the Top segment, Reeve talks at length about how the reverse mortgage industry has evolved and where it is heading. Kristen Sieffert, president of Finance of America Reverse, builds upon those observations in her Board Room column Reverse Mortgages May Be the Winners in a Crisis (p. 6) where she comes right out and acknowledges that volatility has been a constant presence in the reverse mortgage industry for the past 20 years. While 2022 has been challenging, she points out, the future offers opportunities because reverse mortgages increasingly are gaining acceptance from major news outlets when they note the products are great tools for financial planning. “So, let’s use this moment as an unprecedented opportunity to wow every potential borrower we encounter,” she writes. “As Winston Churchill said, ‘Never let a good crisis go to waste.’” Or, as Irwin writes at the end of his column, “Onward.” In Reverse In Reverse continued from page 3 GIVE US A TRY. SEND US A LOAN! For industry professionals only. nwecorp.com/nrmla NMLS #1408 Become a wholesale partner and you’ll see. NO B.S.UNDERWRITING UNBEATABLE SERVICE NO COMMISSION CAPS USE YOUR OWN AMC LOAN LIMITS UP TO $6 MILLION LIBERAL EXCEPTIONS COMPETITIVE PRICING SUPPORT TEAM ACCESS NRMLA PRINT MAILER JUNE 2022.indd 1 5/13/2022 3:06:29 PM 4 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
Moving Forward Embrace Change— Even When It’s Unanticipated Onward Into 2023 Is the Only Path Forward By Steve Irwin, President, NRMLA “Change before you have to”—Jack Welch AS WE ALL look ahead to another great year, we continually work to manage our businesses, our operations and our lives so we might find stability. We anticipate, and prepare for, any and all of the strong headwinds we might face. We diligently strive to manage the future through robust analytics and our collective relevant past experiences. We naturally desire consistent and predictable outcomes. These exercises often prove to be futile, however. Of course, we need plans of action and contingencies. This is the responsible and prudent way to operate. We must collectively recognize change is coming. We can’t control it, and we can’t always predict it. Chaos happens, and we need to anticipate it. We need to look forward to the change that unexpectedly gets thrown our way and embrace it when it happens. We must prepare to be as nimble as possible and mitigate those unknown risks. We must understand how unanticipated change impacts our teams, our families and the customers we serve. Then, we get into gear, adapt, execute and come out stronger. So, we know the coming year will see changes to our regulatory environment, to the dynamics of the secondary markets and to the evolving technology we all employ. We don’t know what these specific changes will be as I write this column, but I do know change is coming to our critically important marketplace. There are also changes coming our way that none of us can anticipate. There will be changes NRMLA and its membership will lead. There will be changes we all cause and will do our best to prepare for. And as for that which is unknown and will necessarily require us to quickly react, I look forward to the opportunity to be creative and innovative. I eagerly anticipate advocating for our members in light of these unanticipated changes. I embrace the opportunity to further our cause as a membership organization that advances the cause of responsible retirement financing and supports the mission of enabling older homeowners to safely age in place. I also look forward to celebrating with you all as we come out the other side of those unanticipated headwinds. We all deserve to take a breath, reflect on the outcomes and ask ourselves: What’s next? Onward. Steve Irwin REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 5
Board Room Reverse Mortgages May Be the Winners in a Crisis By Kristen Sieffert OUR INDUSTRY IS no stranger to upheaval and volatility. If you are newer to the space, ask a veteran for a 20-year history lesson, and you might wonder how any of us are still standing. At Finance of America Reverse, our motto is “No matter what challenges we face, survival is not good enough.” Thriving is the goal. In order to make that a reality, we’ve had to cultivate a practice of always searching deeply for any silver linings. Admittedly that’s been a harder challenge of late. Yet, in searching for it, we see a tremendous push-and-pull opportunity that could be transformative for the industry. First is the push. Rising interest rates, inflation, stock market unpredictability, irrational housing prices and limited inventory have made people feel vulnerable and exposed. Retirees and those nearing retirement are wrestling with the reality that they may not have what they need to retire in the way they envisioned. This is driving more people to think beyond the traditional options about how to reduce risk in retirement, and a reverse mortgage can be a phenomenal tool to do just that. One study published by the Journal of Financial Planning in December 2021 found that a reverse mortgage can reduce risk of market volatility and protect wealth—two critical aspects of a successful retirement. Also pushing us is a slow but steady perception and sentiment shift around reverse mortgages. Major news outlets are helping to get the word out that these are no longer loans of last resort, and they can be invaluable tools for financial planning. The New York Times and The Wall Street Journal—two publications that haven’t exactly been friends to our industry—have recently written articles on new, favorable ways to think about reverse mortgages. This is a major win for the acceptance and legitimacy of the reverse mortgage industry. Retirees and financial advisers increasingly recognize that it’s shortsighted not to consider home equity products when assessing a retirement plan. Home equity, after all, is the one area that hasn’t been impacted by the downward pressures being felt in most other parts of the market. And now for the pull. The opportunity for our industry is there, but we have to take a hard look in the mirror at our shortcomings. While the positive outcomes for borrowers are undeniable, the challenges and stress of the entire customer journey are too persistent. We must prioritize producing amazing experiences for borrowers and their advisers at each step of their journey so we create evangelists and advocates. The loan is important, but the services before, during and after funding are just as crucial. I believe the biggest opportunity is to rethink the payoff process at maturity so the borrowers’ heirs—our next generation of potential customers—walk away with a positive experience about the loan and our industry. There’s no denying this year has been a challenging one, but overcoming these tests will make the outcome on the other side that much more rewarding. Current market forces are opening the doors to a growing acceptance of what we do and how we can help people retire with more joy, security and dignity. So, let’s use this moment as an unprecedented opportunity to wow every potential borrower we encounter. As Winston Churchill said, “Never let a good crisis go to waste.” Kristen Sieffert 6 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
RMMI: Senior Home Equity Reaches $11.12 Trillion Homeowners 62 and older saw their housing wealth grow by 4.91 percent, or $520 billion, in Q1 to a record $11.12 trillion from Q4 2021, according to the latest quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI). The NRMLA/RMMI rose in Q1 2022 to 388.83, another all-time high since the index was first published in 2000. The increase in older homeowners’ wealth was mainly driven by an estimated 4.4 percent, or $563 billion, increase in home values, offset by a 2.06 percent, or $43 billion, increase in senior-held mortgage debt. “Inflationary fears, market volatility and concerns about a possible recession have created a great deal of anxiety for America’s aging population,” NRMLA President Steve Irwin says. “Now may be an appropriate time to consider the strategic use of home equity to help improve older homeowners’ retirement security.” Telephone/Video Counseling Extended in Massachusetts Massachusetts Lt. Gov. Karyn Polito signed legislation into law on July 16 that reinstates telephone/video counseling through March 31, 2023. The last extension expired July 15. NRMLA notes that the tenacity and leadership of George Downey, CRMP, and Brett Kirkpatrick, CRMP, from Harbor Mortgage Solutions, Braintree, MA, were instrumental in getting the extension enacted. “This is great news,” Downey says. “The governor’s office approved a temporary extension to March 31, 2023, for telephone and video reverse mortgage counseling in Massachusetts effective immediately. Additionally, House Bill H.1146 is moving and, if enacted, would make the change permanent.” NRMLA President Steve Irwin adds, “NRMLA’s statelevel advocacy efforts would not be as effective without the combined efforts of members, like George and Brett, who have cultivated relationships with their local representatives over many years. We greatly appreciate these efforts, and together, we will find a solution for getting telephone and video counseling made permanent in Massachusetts.” People are talking about ... What’s News EVERYTHING NEW YOU NEED TO KNOW 8 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
NRMLA Welcomes New Membership Services Coordinator Hannah Sievers NRMLA hired Hannah Sievers as the association’s new membership services coordinator. A transplant from northern New York and a 2020 graduate of Houghton College with a degree in communications, Sievers moved to the District of Columbia after graduation to work alongside the Friends Committee on National Legislation (FCNL). There, Sievers led programming for young adults across the U.S. in advocacy and lobbying education and recruitment as the program assistant for young adult outreach. After FCNL, Sievers moved to Bread for the World as the membership services coordinator and managed its monthly donor program, e-commerce and customer service. Share This Reverse Mortgage Checklist in Spanish NRMLA commemorated #OlderAmericansMonth by creating a Spanish-language version of the consumer guide, Reverse Mortgage Self-Evaluation: A Checklist of Key Considerations. The guide poses seven questions interested consumers should ask themselves and important considerations they should think about before proceeding with a loan application. NRMLA extends its appreciation to Cesar Hernandez of Premier Reverse Mortgage, Atlanta, for translating the guide. Members are invited to share this resource by accessing it at https://bit.ly/3ukJjEr. Transamerica: 39 Percent of Workers Tapped Retirement Accounts During COVID-19 While 79 percent of employed workers are saving for retirement, 39 percent of them said they tapped their retirement accounts during the COVID-19 pandemic, including 29 percent who took a loan and 27 percent who claimed an early and/or hardship withdrawal. Total savings in household retirement accounts was $65,000 (estimated median). That’s according to a June survey by the Transamerica Institute and its Transamerica Center for Retirement Studies® (TCRS) titled “Emerging From the COVID-19 Pandemic: The Retirement Outlook of the Workforce.” As part of TCRS’ 22nd Annual Retirement Survey, one of the largest and longest-running surveys of its kind, the study delves into the impacts of the pandemic, including the health and financial well-being and retirement outlook of the workforce. Read the full report at https://bit.ly/3dKoltq. New Members Join NRMLA NRMLA welcomes its newest members: • Alkan Mortgage Corp. dba Certified Mortgage Planners, Lake Mary, FL (Lender); • Coast to Coast Title & Escrow Services LLC, Seminole, FL (Associate Member); • Continental Real Estate Services Inc., St. Louis, MO (Associate Member); • Hartford Funding Ltd., Woodbury, NY (Lender); • Summerlin Financial Inc., Lake Havasu City, AZ; and • Stratis Financial Corp., Torrance, CA (Lender). The press is talking about ... Singletary: Reverse Mortgages Help With Home Improvements The Washington Post nationally syndicated personal finance columnist Michelle Singletary recommends to one of her readers that she consider a reverse mortgage to help finance home improvements. After explaining to the 62-year-old homeowner why a home equity line of credit wouldn’t be ideal in today’s rising interest rate environment, Singletary says there may be state and local programs that could assist with home repairs, but then she asked the woman if she had considered a reverse mortgage. Singletary summarizes how a reverse mortgage works, the payment plan options and qualification guidelines. “A reverse mortgage wouldn’t be a bad option,” Singletary says. “She could use the loan to get What’s News continued on page 10 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 9
rid of her credit card and student loan debt and make the repairs she wants.” Read the full story at https://wapo.st/3wektHe. In Washington, they’re talking about … NRMLA Submits Comments on Revised Appraisal Validity Period On behalf of its members, NRMLA submitted comments to the U.S. Department of Housing and Urban Development (HUD) that recommended recent changes to the appraisal validity period should apply to HECM servicers and that the FHA Connection’s automatic case number cancellation procedures be updated to reflect the extended time frames. Mortgagee Letter (ML) 2022-11, published July 12, extends the initial appraisal validity period from 120 days to 180 days and the appraisal update validity period from 240 days to one year for most Federal Housing Administration Title II mortgages and HECMs. In its comments, NRMLA says the policy changes detailed in ML 2022-11 are very welcome, as increasing appraisal validity periods decreases the administrative and financial burdens associated with obtaining appraisal updates, which in turn help mitigate mortgage origination and servicing costs incurred by borrowers. “Unfortunately, the Mortgagee Letter does not address the extension of appraisal validity periods in the context of the servicing and loss mitigation of HECMs,” NRMLA says. “We believe that HUD’s failure to specifically address the extension of ‘as-is’ appraisal reports required for HECM short sale and HECM liquidation claim transactions may be an oversight.” NRMLA requested that HUD clarify the matter. HECM Cap Language Included in THUD Appropriations Bills Language that allows the Federal Housing Administration (FHA) to continue insuring HECMs was included in a package of six appropriations bills that passed the U.S. House of Representatives on July 20. The package, H.R. 8294, includes the fiscal year 2023 Transportation, and Housing and Urban Development, and Related Agencies appropriations (THUD) bill. Earlier that same day, the U.S. Senate Appropriations Committee released its version of the THUD appropriations bill that includes the same HECM cap language. NRMLA and its legislative team played a critical role in getting the HECM cap language added to both bills. Under the current HECM statute, there is a limitation on the number of HECMs the FHA is authorized to insure. Since 2007, Congress has approved suspensions of the authorization cap. Ryczek Joins NRMLA Board Stephen Ryczek NRMLA’s board of directors unanimously voted to have Stephen Ryczek, president of Constellation Mortgage Solutions (CMS), Southfield, MI, join the board for the remainder of calendar year 2022 to fill the vacancy created by the departure of former ReverseVision President and CEO Joe Langner. CMS announced in early February that it had acquired ReverseVision. Ryczek joined Mortgage Builder in 2017. He was promoted to president and general manager in 2020 when Constellation Software acquired Mortgage Builder. He has a diversified background in technical program management and product development for large-scale, enterprise-hosted software solutions for the financial industry. He joined Mortgage Builder after working for Fiserv for more than a decade as an executive and managing director in its mortgage technology division. And now you’re up to date. What’s News continued from page 9 LET US KNOW WHAT YOU’RE TALKING ABOUT. This forum is the place for readers to share their opinions with 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 / NOVEMBER–DECEMBER 2022
*Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. 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. ‡Not applicable in all states; MA imposes a maximum loan amount of $2MM. Visit www.reversefunding.com/equity-elite for details 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. L4689_exp072023 Not All Proprietary Products are the Same 1. We can’t wait to work with your clients. That’s why we changed our minimum age requirement to 55 (in select markets*) so more homeowners can qualify. 2. Condos are our thing! One of the only proprietary reverse mortgages available to all condo communities – FHA approved or not.† 3. A simpler process = a happy customer. We’ve simplified the qualification and underwriting process with our asset dissipation methodology. Who wouldn’t want to close loans faster! 4. The more options, the better. Equity Elite is not just a jumbo loan. We created an alternative to HECMs so your clients have more options. Available for loan amounts from $50,000 to $4,000,000.‡ 4 reasons to offer RMF’s Equity Elite® Reverse Mortgage that just make sense We’re hear to help you expand your business Call us today at 877.820.5314 or visit us at reversefacts.com/RMM
IN THE MID–2000s, Mark Reeve co-owned a mortgage brokerage company in southern California that sold forward mortgages to Plaza Home Mortgage Inc., San Diego. When Reeve closed shop to specialize in reverse mortgages, he began compiling a list of companies where he could start a reverse mortgage division. Plaza was at the top of his list. When he spoke with Plaza’s owners—Kevin Parra, James Cutri and Mike Fontaine—they were open to new ideas, reverse mortgages included. It was a little surprising because lenders were going out of business in 2008 or pulling back on products. After all, the housing market was imploding, and the economy was headed toward a recession. Even though reverse mortgages carried a bit of a negative connotation at the time, the owners remained open-minded and saw that the program could benefit older homeowners and create new opportunities for Plaza’s business clients, especially with the growing Baby Boomer demographic. Fourteen years later, Plaza Home Mortgage’s reverse mortgage business is still going strong with Reeve at the helm. Reverse Mortgage sat down with Reeve to learn more about his company, marketplace issues and where he sees the business headed. Reverse Mortgage: How did you get into the reverse mortgage business? Mark Reeve: I did my first reverse mortgage in 2006. I was co-owner of a mortgage brokerage shop and received a lead from a family friend. I saw the positive impact that the HECM program had on this person, and I was immediately hooked, just like that. RM: After all this time, what’s the one guiding principle you follow that has contributed to your success? MR: As far as guiding principles or philosophies go, the one that has helped us succeed, and that we instill in all our associates, is to take care of the borrower. We want to ensure that we’re helping individuals, putting them in the right place and that nothing goes on that doesn’t appear completely on the up-and-up. RM: Tell our readers about Plaza Home Mortgage. MR: Plaza is a national, independent mortgage lender focusing on wholesale and correspondent lending. Plaza has about 500 employees, of which 20 are dedicated to the reverse mortgage division. As far as our reverse mortgage production goes, almost 100 percent is correspondent, nondelegated, principal-agent and broker business. RM: What types of business partners do you try to attract to your platform? MR: We’re seeing more traditional lenders taking on and originating reverse mortgages. Whereas in the past they may have referred them to somebody in their office who specialized in reverse mortgages, or maybe they didn’t want to take on the loan because of the time constraints, or uniqueness of the program, now everybody is gravitating toward this program. We have a wide range of clients whether they’re first-time reverse to those managing a handful a year. RM: What types of training do you offer your partners? MR: Like our peers, we offer monthly training courses. Classes are recorded so the brokers can pull them down Mark Reeve, Vice President–Head of Reverse Mortgage Lending, Plaza Home Mortgage Inc. By Darryl Hicks From the Top Mark Reeve 12 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
from our website at any time and watch them. We teach several topics. Completing the classes is not required— highly encouraged—but not required. We also offer shorter videos on the basics, such as loan comparison, amortization schedule, billing, loan calculations, max claim, principal limits and so forth. RM: You started the reverse mortgage division at Plaza from the ground up. What was that process like? Was it tough to get senior management on board? MR: Going back to 2008, it was a very difficult environment for all of us in the lending business. Mortgages, in general, didn’t have the best reputation with consumers. There were a lot of foreclosures. Lenders were closing or exiting the residential mortgage business. While all of this was going on, I decided to get into reverse full time. Plaza didn’t offer them, but I knew the owners. They were completely on board, completely supportive. It was a very difficult environment to step into at that time, but we were able to get it off the ground. A lot of it was triage and working through issues. For instance, we needed two different loan origination software systems, one for forward and one for reverse. Where could they work together? Where could they not? Warehouse lines were extremely difficult to come by. Reverse mortgages were looked upon as a niche product. Traditional warehouse banks would not lend on it. That’s not the case today; almost all do without blinking an eye. Our overall success can be attributed to the leadership, who stood by me and the product. Coming from a forward bank, operations, compliance, all those things, reverse mortgages are not necessarily a friendly loan program to implement into a traditional mortgage lender. You need to have the support of the whole organization to pull it off. RM: How long did it take before you were closing loans? MR: We completed our test cases in about three-and-ahalf months so we were able to get the reverse mortgage division up and running quickly. At that time, there were not a lot of wholesale investors. We worked with Generation Mortgage Co. and JB Nutter. Both were extremely helpful in getting us off the ground and teaching us how to navigate the business, underwrite loans, use the right software and get loans insured. Today, there’s a wealth of resources to teach these things, but not so much back then. RM: Were there many regulatory hurdles when you launched the reverse mortgage division? MR: Surprisingly no. It was 2008, and Dodd–Frank hadn’t come into play yet. One of the big changes with Dodd– Frank, and there were a lot, involved broker compensation and how mortgage banks would be paying mortgage brokers moving forward. That created a lot of angst in the coming years as to how we pay and stay compliant. We had some great support from individuals, like Jim Milano (NRMLA’s outside general counsel), coming in and helping us out on things like that, and the resources that NRMLA provided to ensure we operated within the scope of the HECM program were very helpful. RM: Plaza offers a proprietary reverse mortgage. What portion of your production is proprietary versus HECM? What distinguishes your proprietary product from others in the marketplace? MR: As everyone knows, the past couple of months has seen instability in the reverse mortgage marketplace. Before interest rates increased, roughly ten percent of our production was proprietary. Our proprietary program has been reduced quite a bit by our investor banks, meaning the principal limit factors were cut, and the coupon rate has gone up, so it has become a more challenging program to market and deliver to the consumer. Our product is like most others in the marketplace in terms of being able to pay off debt to qualify and using loan proceeds as asset dissipation is very beneficial compared to HECM. RM: Do you see your proprietary product recovering in the short term? MR: I do once the markets stabilize a bit. Nobody knows what that crystal ball looks like. The optimists are hoping that we get through the fourth quarter and the economics start to stabilize in the first quarter of 2023. RM: At the time of this interview on August 22, interest rates have increased dramatically. What’s it like in the marketplace? How have you adapted to these changes? MR: With the rise in the ten-year swap rate, we’ve seen compression in principal limits that finally caught up From the Top continued on page 14 From the Top REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 13
to the massive amount of home appreciation that our seniors have. Home appreciation was outpacing the rate increase for a little while, but it seems like now the expected rates have penciled principal limits down and pushed a lot of people out of the market. Offsetting this somewhat is the decline in forward mortgage applications, which are at a 20-year low, so niche program offerings are favorable right now to all originators. Reverse mortgages and home renovation loans that Plaza offers are gaining a lot of popularity. RM: That’s great news that you’re seeing more interest from traditional mortgage loan officers wanting to expand into reverse. What’s the biggest challenge in onboarding loan officers and preparing them to be successful? MR: Loan officers have more time to investigate this program more closely. We have an onboarding process where we show a loan officer some basic numbers, we present a quote and then we show how the transaction works. We provide training resources on the front end. We get strong attendance for our reverse mortgage webinars companywide. They get familiar with reverse mortgages. They look at the transaction. Then, they begin to work closely with our staff to iron out the details of the questions and so forth, so they can be successful in presenting the program properly. RM: Are your wholesale partners based primarily in California or all over the country? MR: Plaza is licensed in all 50 states but 36 states for reverse. We have account executives, brokers and correspondents throughout the entire country with strong production on the East Coast, Midwest and West Coast. It’s evenly split out there. Large markets, like California, the Eastern Seaboard and the Northeast, carry a lot of production. RM: Where do you see Plaza Home Mortgage five years from now? MR: We want to be the service leader in this program. We will continue to refine our processes, so that loans are moved through the system as efficiently as possible. We will continue to provide and enhance the necessary resources for brokers to learn and communicate accurately to the senior clientele. And we want to help our brokers understand the guidelines, as it relates to the underwriting piece, so that they can satisfy conditions and move loans through underwriting promptly. We don’t want to be closing loans in 45 to 60 days. We want our turn times to be 20 to 30 days on this program. From the Top continued from page 13 From the Top 888.369.1573 | HTLWHOLESALE.COM HighTechLending, Inc. All Rights Reserved. NMLS #7147 (nmlsconsumeraccess.org). For more information on licensing please visit www.hightechlending.com/compliance-information 14 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
ONE OF MELINDA Hipp’s clients is a grandfather who takes each of his grandchildren to France when they get old enough. His philosophy: Enjoy his grandchildren’s inheritance with them while he’s living. Every client has a story, says Hipp, and that is what makes this business so interesting. “You’re doing just one product, but you’re dealing with so many different people,” Hipp says. “They all have different needs—everything from the person who just really needs to fix up the house to the borrower whose kids are paying $5,000 out of their own pockets to pay for their home care because they want to age in the home they love.” Hipp is a trailblazer in Texas reverse mortgages who also has opened doors for women in golf. Like many reverse mortgage professionals, she followed a winding career path. As a child growing up in Texas, she dreamed of becoming a band director. When teaching didn’t suit her, she earned a master’s degree in arts management and an MBA. She was hoping for a career managing symphony orchestras, while her tuba-playing husband took “audition after audition after audition” with symphonies. When he won a seat in the San Antonio Symphony in the early 1990s, the city became their home. In those years, Hipp’s grandmother, with whom she was close, moved to the area to be near family. Hipp had also dabbled in real estate, and when she was refinancing her own mortgage, a lightbulb went off. She jumped into mortgages in 1998 and has never looked back. “I could use my brains and background in real estate,” she says. “I had my MBA. This is a job I could do on my own and build my own business.” In 1999, Texans voted yes on a constitutional referendum to allow reverse mortgages to be made in the Lone Star state. After a long process of compiling the documents, creating a marketing plan, contacting referral partners and building a team, Hipp started writing reverse mortgages around 2007–08. The passion of attendees at a NRMLA regional conference in Denver in the mid-2000s “set me on fire,” she says. Texas needed more services for an increasingly aging population, and she saw a niche. “I could specialize in something,” she says. “I could stand out. I’ve always been one of these people that did something everybody else didn’t do.” After seven years, her employer decided against doing reverse mortgages, so Hipp struck out on her own. For about four more years, she originated forward and reverse mortgages until switching branch affiliations and focusing increasingly on reverse mortgages. Then came the pandemic, and Hipp had time to think. The industry was changing, and Mutual of Omaha was aiming to become a top contender in reverse mortgages. A regional manager had been encouraging her to come on board, and she asked for—and received—a management role. She started with about four workers. In less than two years, she had 14, specializing in HECMs. Mutual of Omaha is “all about retirement,” she says. “That’s the whole key.” That, and the Baby Boomer generation’s fond memories of the 1960’s must-see TV staple, Mutual of Omaha’s Wild Kingdom. “It’s been a great ride,” says Hipp. “This is where I’ll be the rest of my career because it just fits my sensibilities.” To Hipp, the CRMP designation is a niche within a niche, further distinguishing reverse mortgage ‘It’s Been a Great Ride’ A Chat With Melinda Hipp, CRMP, Area Sales Manager for Texas & Oklahoma, Mutual of Omaha Reverse Mortgage By M. Diane McCormick Melinda Hipp CRMP: Across the Kitchen Table 16 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
professionals as tops in their field. At a time when there were zero CRMPs in Texas, she felt the need to stand up for the designation. “The CRMP represents, to me, that you are the best at what you do,” she says. “It should not just be initials behind your name with no meaning. You should have the experience and the in-depth knowledge for what you do every day.” In 1994, after moving to San Antonio, Hipp spotted a newspaper notice about the formation of the Executive Women’s Golf Association, meant to give women a pathway for leveraging golf as a business tool. Three hundred other women joined the fledgling organization, and Hipp became a charter member of what is now the San Antonio chapter of the LPGA Amateurs. “We try to encourage more women into golf,” says Hipp. “It’s more difficult now because women have more opportunities. We accomplished our goal at the same time we diluted our membership.” From the beginning of her time in mortgages, Hipp’s methodical approach to building a business included significant outreach to real estate agents. In the ensuing years, her original contacts in real estate have been maturing along with their clients. That makes them today’s reverse mortgage ambassadors. “They see homeowners every day,” Hipp says. “They have people who rely on them for expert advice. They are constantly talking to their clients about situations at home or are taking listings from people who don’t want to move. If they’re talking to people who don’t want to sell their house and are doing it strictly for financial reasons, they can say, ‘Maybe there’s an alternative.’” Those real estate agents are among the many people Hipp strives to educate about reverse mortgages, from widows who never learned how to handle finances to members of the public who need some advice. No matter the circumstances, she tries to help. “It’s all about educating and communicating,” she says. “That’s all I can do in this world, just trying to be upfront and educate people as much as possible. I want the best for them. If they choose not to use me and go somewhere else, that’s fine. I hope they get just as well educated.” Hipp trains her team in providing a positive experience and educating customers to understand the process. She stresses viewing the procedure from the customer’s perspective, even if it means driving to a customer’s house just to see the concrete fountain in the front yard that has significant value to the homeowners. She also encourages her team members to obtain the CRMP because “there can be no better designation to have in our niche.” As a Mutual of Omaha area manager, Hipp is involved with planning and participating in the company’s intensive, eight-week training program—“like going to boot camp”—that trains carefully screened candidates on the intricacies of reverse mortgages and the art of communications and sales. She hopes this level of commitment will be her legacy—inspiring a new generation to get excited about the power of reverse mortgages. “For people who are looking for something where they can help others while they make money, a reverse mortgage is a great product, and it’s something they can do the rest of their lives, even after they retire,” she says. “I want the team to continue, and I want to see some younger folks take the ball and run with it.” CRMP: Across the Kitchen Table Help Your Borrowers Plan for What’s Ahead, Especially in Retirement. 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 Get Reverse Mortgage Alerts Don’t miss the chance to help borrowers manage expenses in retirement. REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 17
Our latinum suite of products is now available to more people in more places. * Due to state requirements for the states of Louisiana, New Jersey, and Washington, all borrowers must be 60 years of age and in North Carolina, Texas, and Utah, all borrowers must be 62 years of age. 1 nternational Boulevard, uite 900, ahwah, 07495 For industry professionals only – not intended for distribution to the general public. ©2022 Longbridge Financial, LLC. NMLS #957935
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A TURBULENT STOCK market and rising interest rates have dominated financial headlines in 2022, and both have impacted reverse mortgages. Higher interest rates have eaten into the once-booming refinance business for HECM originators, while a volatile stock market has spurred interest in exploring other sources of retirement income, such as home equity. The two trends could come together in 2023 to spur renewed interest in the traditional HECM. Seniors will see them as bulwarks to protect their retirement savings and as a means to keep up with inflation. Lenders will see them as a way to move on from a fizzling refinance business. It adds up to what Ed Robinson, president and chief operating officer of American Advisors Group (AAG), describes as “getting back to our knitting.” “We’ve got to get back to growing the industry,” says Robinson, who is hoping for an uptick in originations to new borrowers. The means to get there will include new approaches to marketing and help for brokers who want to refine their sales process. “The numbers won’t be huge out of the gate, but I do believe that we’ll be getting back to steady growth in new originations and a sales process that gets consumers off the fence.” Melissa Macerato, chief revenue and marketing officer for Longbridge Financial, says her New Jersey-based company has been seeing growth in the traditional HECM product in 2022 and expects that to continue into 2023. “While refinances were down significantly, we have seen real growth in our core HECM business with our focus on the true value and benefits of the product—a reminder that going back to the basics is often the best approach,” Macerato says. “Also, the addition of our new field sales channel in the second quarter helped keep our retail channel from seeing any real negative impact on Back to Basics Experts: HECMs Have New Appeal in Tough Market By Joel Berg Ed Robinson 20 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
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