www.nrmlaonline.org The official magazine of the National Reverse Mortgage Lenders Association March-April 2023 Volume 16, No. 2 INSIDE: Nurturing Your Talents Selling With Authority P.25 P.31 MARKETING FOR THE FUTURE Sales Leaders See New Tools, Strategies Capturing More Clients
Unparalleled resources and dedicated support teams Customizable marketing materials Comprehensive product and sales development training For industry professionals only - not intended for consumers. American Advisors Group, NMLS #9392 (www.nmlsconsumeraccess.org), headquartered at 18200 Von Karman Ave., Suite 300, Irvine, CA 92612. This material is not from HUD or the FHA and was not approved by HUD or a government agency. License information can be viewed on: www.aag.com/disclosure. Whatever you've heard about AAG, we're still here for you. Word’s out: AAG continues to be a leading national provider of reverse mortgages. Get further acquainted with our suite of hands-on training, customizable marketing materials, dedicated support teams, and much more to help your clients achieve a better retirement. See for yourself … Give us a call today. (866) 964-1109 aag.com/wholesale
From the Top Mike Kent, president, Liberty Reverse Mortgage By Darryl Hicks 11 Those We Help Financial planner taps security of reverse mortgage By Darryl Hicks 34 March/April 2023 Volume 16, No. 2 Contents CRMP: Across the Kitchen Table A chat with George Downey, CRMP, and founder, Harbor Mortgage Solutions, Braintree, MA By M. Diane McCormick 14 Features 20 Marketing for the Future Sales leaders see new tools, strategies capturing more clients By Joel Berg 25 Nurturing Your Talents Executive coach meshes modern science with tools to enhance sales performance By Thomas A. Barstow 31 Selling With Authority CRMPs discuss value of designation, continuing education By M. Diane McCormick Columns 3 In Reverse Newer/older generations are our future By Thomas A. Barstow 5 Steve Irwin: Moving Forward Working together is key to success in our industry 6 Board Room Let’s stop running in cement shoes By Chris Downey Departments 2 Scribes Meet this month’s contributors 8 Hey, Members New roundup of issues and news for NRMLA members 36 Numbers Survey: Pandemic takes toll on women’s finances 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 ©2023 National Reverse Mortgage Lenders Association
Scribes Meet This Month’s Contributors Thomas A. Barstow (In Reverse, p. 3, and Nurturing Your Talents, p. 25) is the senior editor for Reverse Mortgage magazine. Barstow has had a 38-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 former president of the Pennsylvania Society of News Editors and former president of the Associated Press Media Editors in Pennsylvania. Joel Berg (Marketing for the Future 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. Chris Downey (Board Room, p. 6) is president of Harbor Mortgage Solutions, based in Braintree, MA, where he is responsible for the oversight of conventional mortgage activities, as well as general management of the firm. A graduate of Providence College with a Bachelor of Science in accounting, Downey began his career as a registered representative and operations manager at a securities broker-dealer before joining Harbor Mortgage in 1989 as a mortgage loan originator. Downey was named vice president of Harbor Mortgage Solutions in 1997 and succeeded his father, George, as president in 2004. He has been an active volunteer in community service programs, including Big Brothers Big Sisters, the Greater Boston Food Bank, Second Helping, Rebuilding Together Boston and the Pan-Mass Challenge fundraising event for cancer research. Darryl Hicks (Hey, Members, p. 8, From the Top, p. 11, and Those We Help, p. 34) joined NRMLA in May 1999 and currently serves as vice president, communications. Hicks writes the Weekly Report newsletter, administers NRMLA’s social media accounts and websites, and manages the CRMP designation. Steve Irwin (Moving Forward, p. 5), president of NRMLA, oversees the association’s initiatives to serve as an educational resource, policy advocate and public affairs center for consumers, lenders and related professionals. His background includes experience with strategic planning, organizational design, portfolio acquisition, risk management and quality control. He received his B.A. from Grinnell College and his MBA from the University of San Francisco. M. Diane McCormick (CRMP: Across the Kitchen Table, p. 14, and Selling With Authority, p. 31) 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. 2 REVERSE MORTGAGE / MARCH–APRIL 2023
In Reverse Newer/Older Generations Are Our Future By Thomas A. Barstow INDUSTRY LEADERS HAVE known for a long time about the vast untapped potential that reverse mortgages offer—the millions of Americans who either don’t know about reverse mortgages or remain skeptical. That situation has made industry professionals increasingly focused this year as “turmoil” continues to be the operative word. In this issue of Reverse Mortgage magazine, sales and marketing experts discuss how they intend to tap that potential through modern means of communication and an all-out push to boost education about how these products can help people live fuller retirements. These ideas are outlined in the cover story Marketing for the Future (p. 20). Christopher Moschner, chief marketing officer for American Advisors Group, talks about changing the conversation. Instead of reverse mortgages being marketed as an end-of-retirement solution, they could be discussed as a way to finance a new stage in life. “Seniors may have 20 or 30 years ahead of them. What role can our products play in that journey?” Moschner tells writer Joel Berg. Such pitches focus on how the products are here to stay and how they are a viable way to fund retirements. That means educating loan originators—as well as key referral partners, such as retirement planners—in the numerous ways a reverse mortgage can help someone, the experts point out. Perhaps companies that harness digital marketing tools, such as streaming ads, can reach individuals with specific pitches based on their digital habits. Creative and humorous ads might appeal to newer/older generations. I use the phrase “newer/older” for a reason. It recognizes a reality that is increasingly apparent: The people who grew up with technology are at or near retirement. And those who are digital natives—people born just before or during the advent of social media— are our future customers. And maybe reverse mortgage professionals can boost their efforts to show financial planners how and when a reverse mortgage might work for their clients—or more importantly when the products will not help. None of this is all that new. But the current economic conditions of high interest rates and rising inflation are forcing companies to find new ways to increase the visibility and acceptability of their products. An all-out sales and marketing effort now might stick for generations to come. In his column Let’s Stop Running in Cement Shoes (p. 6), Chris Downey notes that market penetration for reverse mortgages hasn’t really changed in the decades In Reverse continued on page 4 REVERSE MORTGAGE / MARCH–APRIL 2023 3
since he started in the mortgage business. He advocates for a renewed push into the financial services industry, where his company has found great success. However, he suggests the initiative needs to be nationwide to raise the profile of the products uniformly. “There are many reverse mortgage originators who have forged such relationships with financial advisers,” Downey writes. “What I am suggesting is that as an industry, we need to expand these efforts.” One way to appeal to skeptical professionals in the financial services industry is to show that the reverse mortgage industry takes professionalism seriously. Starting in 2009, NRMLA has offered the CRMP credential. Since then, the CRMP program graduates with that designation behind their names have evangelized about the products. In the article Selling With Authority (p. 31), various CRMPs talk about their experiences. When working with an industry, such as financial planning, where credentials are paramount, the CRMP designation can open more doors. Other professionals, at least, are more willing to listen. “A great many of them have certifications,” Karen Pryor, of Mutual of Omaha Reverse Mortgage in Torrance, CA, tells writer M. Diane McCormick. “And I wanted to present myself on the same level.” Pryor earned her CRMP in 2021, but her experience with how the CRMP can open doors is reflected in the comments from other loan originators that McCormick interviews. We also hear from George Downey, a longtime industry veteran, and Mike Kent, who is now serving a fourth term as NRMLA co-chair. George Downey, father of Chris Downey, is the subject of this issue’s feature CRMP: Across the Kitchen Table (p. 14), and Kent gives a Q&A interview in the From the Top (p. 11) article. “Originators need to keep in mind that there’s still a huge market out there that’s untapped,” Kent tells Darryl Hicks, NRMLA vice president of communications. “ ... Now is the time to get back to the basics of acquiring new reverse mortgage customers, showing them the benefits of reverse mortgages and creating better retirement outcomes.” On a final note, you will notice a slight change to our format for this issue. The What’s News segment, which has been appearing since well before I started as senior editor of Reverse Mortgage magazine nearly four years ago, is being revamped. Hicks, who compiles those bits of news you can use, will now be writing a bylined column called Hey, Members (p. 8) where he will offer some of the same news important to you but in a more personal manner. In Reverse In Reverse continued from page 3 NATIONWIDE REVERSE MORTGAGE FIELD SERVICE EXPERTS FOR OVER 30 YEARS 1.800.639.2151 www.nfronline.com Inspections - Preservation - Insurance Loss Inspections - Violation Management - Vacant Property Registrations - Utility Management - REO Services - Special Services 4 REVERSE MORTGAGE / MARCH–APRIL 2023
Moving Forward Working Together Is Key to Success in Our Industry We Must Renew Our Commitment to Our Customers, Our Community By Steve Irwin, President, National Reverse Mortgage Lenders Association “If you can’t handle stress, you won’t manage success.” —Olivier Francois, Global President of Fiat Brand & Chief Marketing Officer of FCA Group THERE IS NO question the onset of the COVID-19 pandemic created unprecedented disruption to our marketplace. Quarantine directives and lockdown guidance necessarily demanded that NRMLA members shift their operational practices, counseling delivery, appraisal procedures and closing methods to accommodate the new realities. Our industry rose to the challenge and continued to assist seniors in effectively leveraging their home equity so they might continue to age in place. And now, we have faced a new set of disruptions that have seen some market participants exit the reverse mortgage space and others consolidate into different and unique entities. While I do believe the macroeconomic conditions will continue through their own cycle, we must remind ourselves that now is the time to renew our commitment to customers and our community. The commitment to customers will require us to close performance gaps, where performance, as perceived by the customer, does not equal the performance expected by the customer. It is incumbent on us all to properly set customer expectations and ensure service delivery exceeds those expectations. This focus will mitigate reputational risk and help ensure the longevity of our unique product offerings. These expectations must be set across the entire life cycle experience of borrowers— and their trusted advisers—from counseling to application, processing to closing, onboarding to servicing and delicate end-of-loan issues. The commitment to our community will require us to keep all channels of communication open, broaden and strengthen our commitment to educational opportunities, and continue our advocacy on behalf of our members and the senior homeowners you all serve. We will work to strengthen and broaden our committee participation and activities; host webinars on topics our members consider critical to their business; and stay in front of the agencies, regulators and legislators who oversee the space we operate in. Yes, these past several months have been challenging and trying, but we will come out of this stronger by working together and strengthening our community and by renewing our collective commitment to the customer. Your association is ready to meet these challenges and to work with you to effectively strengthen our solidarity and manage our collective success. Steve Irwin REVERSE MORTGAGE / MARCH–APRIL 2023 5
Board Room AS SOMEONE WHO has enjoyed a career of more than 33 years in residential mortgage lending, I continue to be impressed with the quality and passion of my colleagues in the reverse mortgage niche of our industry. This was reinforced after attending NRMLA’s first in-person conference in three years in November. One of the sessions I attended—“Moving the Needle, Accelerating Sales in Today’s Market”—was presented by Tabatha Addison and Steve Sless. They reminded us that reverse mortgages are still at a two percent market penetration level. For various reasons, this has stuck with me as it is the same level as 15 years ago. What gives? We all know that over the past decade and a half, the market for households that would benefit from a reverse mortgage has grown, existing products have improved, new proprietary products have become available and the public has a better understanding of reverse mortgages overall. I certainly do not profess to know all the answers to the question. But I do feel strongly that one element is creating a stronger understanding and relationship with the financial adviser community. I believe acceptance by this community will trickle down to the public and is key to making reverse mortgages a mainstream financial product. This is particularly important now because of our current set of economic conditions. The good news is residential home equity is effectively at an all-time high. The bad news is—thanks to inflation, market volatility and the fact that we are all living longer—there has never been more pressure on making retirement income and savings stretch as far as possible. This is the most common conversation we have with our certified financial planner (CFP) and registered investment advisor (RIA) relationships and includes not just the needs-driven client but the more affluent, as well. In recent months, we have closed reverse mortgages for clients with home values from the low six-figures into the eight-figure level. I have been involved in forward mortgage origination for over 30 years, with over 90 percent of our clients being referred by some type of financial adviser, including CFPs, RIAs and estate attorneys. Ideally, these relationships grow to the level where we become their trusted adviser for all things mortgage-related. And this is also true now for our reverse mortgage referrals. In many cases, that requires us to tell that adviser that a reverse mortgage is not the right tool for the job, and their client needs another solution. This is not selling; this is advising. And it requires us to deliver the most objective information each time we are asked. I am not suggesting this is a new idea. Many reverse mortgage originators have forged such relationships with financial advisers. What I am suggesting is, as an industry, we need to expand these efforts. It is difficult. It takes a significant investment of time to create such relationships, and more pressing items may be on our schedules that will interfere. That said, I consider this a component of our long-term planning that I am confident will help produce the desired results of far greater understanding and acceptance of the reverse mortgage product. Maybe, it will allow our industry to break out of its cement shoes. Chris Downey Let’s Stop Running in Cement Shoes By Chris Downey 6 REVERSE MORTGAGE / MARCH–APRIL 2023
D ff ! L ’s 866.871.1353 S @ R BE AUSE EVERY LOAN OUNTS WE GO THE EXTRA MILE I W This material is not provided by, nor was it approved by the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). © 2022 PHH Mortgage Corporation, d/b/a Liberty Reverse Mortgage, 1 Mortgage Way, Mt. Laurel, NJ 08054; NMLS ID # 2726 (www.nmlsconsumeraccess.org) For a complete list of licenses, visit www.libertyreverse/licensesnmls. Equal Housing Lender.
Health of HECM Program Improves in FY2022 The first piece of good news is the HECM portfolio’s financial health dramatically improved in fiscal year (FY) 2022, ending September 30 with a stand-alone capital ratio of 22.75 percent, compared with 6.08 percent the previous year. That’s according to the U.S. Department of Housing and Urban Development’s (HUD’s) 2022 Annual Report to Congress released November 15. Put another way, the HECM portfolio’s captial levels improved by $11.3 billion over the past year, from a positive $3.8 billion in FY2021 to a positive $15.1 billion in FY2022, driven primarily by strong home price appreciation levels nationwide. By comparison, the Federal Housing Administration’s (FHA’s) forward mortgage program had a capital ratio of 10.47 percent in FY2022, while the overall capital ratio for the Mutual Mortgage Insurance Fund (MMIF) was 11.11 percent. Congress requires MMIF to operate at a minimum capital ratio of two percent. “FHA’s Annual Report to Congress was welcome news and a clear-cut sign that programmatic reforms implemented by HUD to ensure the long-term sustainability of the HECM program continue to work, while also underscoring the strong leadership at FHA over the past two years,” said NRMLA President Steve Irwin. “That said, we continually look for ways to work with the department to further improve the HECM program. We believe there are opportunities to expand the accessibility of this program, enhance loss mitigation options and broaden HECM’s reach to assist underserved communities. We look forward to continuing our dialogue with HUD on these enhancements.” Following are a few other highlights from the annual report: Welcome to the newest section of Reverse Mortgage magazine— something we’re calling Hey, Members—that highlights important industry news and advocacy efforts with a personal touch. Hey, Members Darryl Hicks New Roundup of Issues and News for NRMLA Members By Darryl Hicks 8 REVERSE MORTGAGE / MARCH–APRIL 2023
• FHA insured 64,437 HECMs in FY2022, representing a maximum claim amount of $32.10 billion, a record high for the HECM program. • The average maximum claim amount per HECM endorsement has risen steadily since FY2013, increasing to a record $498,221 in FY2022. • The share of HECM refinances increased from 46.72 percent of endorsements in FY2021 to 48.88 percent in FY2022 as homeowners took advantage of favorable house prices to extract more equity. Download a copy of the annual report at https://bit.ly/3uZaa92. HECM Loan Limit Increases to $1,089,300 in 2023 Every October, emails start streaming in from members who want to know if I have any insights into what the new Federal Housing Administration (FHA) lending limit will be. My response to them is always the same: “We’ll know more the first week of December.” Like clockwork, FHA announced December 1 that the new maximum claim amount for HECMs in calendar year 2023 would increase from $970,800 to $1,089,300, effective for case numbers assigned on or after January 1, 2023. This new maximum claim amount is also applicable to Freddie Mac’s special exception areas: Alaska, Hawaii, Guam and the Virgin Islands. The HECM loan limit is calculated at 150 percent of the Freddie Mac national conforming limit announced by the Federal Housing Finance Agency a few weeks before. It is important to note the single national loan limit for HECM (as opposed to area-by-area limits) exists because of NRMLA’s advocacy efforts. NRMLA persuaded Congress and key U.S. Department of Housing and Urban Development officials that the area limits used for forward mortgages did not really make sense for HECMs. Area-by-area limits empower consumers to buy an equivalent home wherever they are. Such a home costs a lot less in St. Louis than in Los Angeles or Buffalo, NY, than in the New York City metro area. On the other hand, a HECM helps homeowners draw cash from their accumulated equity to age in place. The costs of aging, prescription drugs, durable medical equipment or adapting a home with stair glides do not differ regionally. NRMLA successfully argued that a homeowner with a higher-value property in an area with a low FHA loan limit should not be penalized by only being able to borrow based on the forward mortgage loan limit. NRMLA Submits Comments to HUD, CFPB One of the most effective ways NRMLA advocates for improvements to the HECM program is through comment letters we submit to the U.S. Department of Housing and Urban Development (HUD), Consumer Financial Protection Bureau (CFPB) and other regulators. The fourth quarter of 2022 was especially busy as we submitted three sets of comments. On November 18, NRMLA submitted a letter to HUD on the London Interbank Offered Rate (LIBOR) transition. The letter was written in response to a proposed rule published by HUD on October 19 regarding the replacement of LIBOR with the Secured Overnight Financing Rate as an approved index for Federal Housing Administration (FHA)-insured adjustable-rate mortgages, including HECMs. On November 28, NRMLA submitted a letter to CFPB on ways to improve loss mitigation protocols to better assist delinquent HECM borrowers. The letter was written in response to a request for public input concerning methods to reduce risks for consumers who experienced disruptions in their financial situations that could interfere with their ability to remain current on their mortgages. On October 13, the bureau’s Office of Older Americans clarified that the request for public comment included loss mitigation options for reverse mortgages. A copy of the letter was also provided to FHA Commissioner Julia Gordon. The final letter, submitted to HUD on December 5, included proposals to make the HECM program more accessible and attractive to homeowners living in underserved communities and lower-value homes. The comments were submitted in response to a request for information issued by FHA on October 4 seeking public input regarding barriers to the origination of small Hey, Members Hey, Members continued on page 10 REVERSE MORTGAGE / MARCH–APRIL 2023 9
Hey, Members mortgages in the FHA mortgage insurance program. NRMLA pointed out that for many borrowers, a material barrier to getting a HECM is the high upfront cost associated with the initial mortgage insurance premium (IMIP). NRMLA requested that FHA consider reducing the IMIP for HECM borrowers who take a full, voluntary Life Expectancy Set Aside or who borrow less than 60 percent of the available principal limit at origination. NRMLA also proposed that FHA consider expanding the eligibility of the HECM program to allow borrowers to undertake larger home renovations and provide a lower IMIP for borrowers who use HECM funds to improve the energy efficiency of their homes. I would encourage you to read the comments in their entirety by logging into the comment letters section at https://bit.ly/3sgHyYm. Government Releases Annual Profile of Older Americans We know there’s a huge potential market for reverse mortgages. The “Annual Summary of Statistics On Older Adults,” published in November by the Administration for Community Living, includes some interesting statistics on the shifting demographics of Americans age 65 and older. It includes statistics on future population growth, marital status, living arrangements, income, employment and health. Download a copy of the report at https://bit.ly/3vkB8IB. Highlights are as follows: • In 2020, the 65 and older population was 30.8 million women and 24.8 million men. • In 2020, people 65 and older represented 17 percent of the population. By 2040, that is expected to grow to 22 percent. • In 2020, Maine, Florida, West Virginia and Vermont had the highest percentage of population that is 65 and older. • In 2020, the median income of older people was $26,668 ($35,808 for men and $21,245 for women). • In 2019, the median household income of homeowners 75 and older was $36,200. • In 2021, 10.6 million Americans age 65 and older were working or actively seeking work. • Consumers age 65 and older had average out-ofpocket healthcare expenditures of $6,668 in 2020, up 38 percent from 2010. Submit Your Questions or Comments I’d also like to use this column to respond to questions you may have about NRMLA, the Certified Reverse Mortgage Professional (CRMP) designation or anything that’s on your mind. Send your questions or comments to dhicks@dworbell.com. Hey, Members continued from page 9 10 REVERSE MORTGAGE / MARCH–APRIL 2023
From the Top MIKE KENT WAS recently elected to a fourth term as co-chairman of NRMLA, and he takes the role seriously. Along with his co-chair, Scott Norman of Finance of America Reverse, Kent has played a key part in shaping NRMLA’s advocacy efforts during one of the most challenging periods in the history of the HECM program. Kent became president of Liberty Reverse Mortgage in April 2015. Before that, he spent four years at Reverse Mortgage Solutions Inc. as president of loan originations. In addition to his reverse background, he has over 30 years of forward mortgage experience and has held leadership roles across various lending functions, including sales, operations and secondary markets. Reverse Mortgage magazine sat down with Kent to get a better understanding of what it’s like to serve as co-chair of NRMLA, what his priorities for the association will be in 2023 and where he sees the marketplace headed. Reverse Mortgage: The theme for this issue is sales and marketing. As someone who has been in the mortgage business for 30-plus years and guided Liberty Reverse Mortgage through other challenging periods, what advice would you give to our readers to help them succeed in 2023? Mike Kent: Regardless of changes to interest rates and macroeconomics, the demographic we serve hasn’t changed. We still have 12,000 people turning 65 every day. We still have roughly 26 million households headed by someone who is 62 years of age, and slightly over half of those households have no mortgage debt. Even in a rising rate environment, which effectively lowers principal limit factors, there’s still a significant amount of equity that can be tapped into through a reverse mortgage. Originators need to keep in mind there’s still a huge market out there that’s untapped. We might have taken a little bit of a break during the past two years because of the unprecedented level of refinancing, but now is the time to get back to the basics of acquiring new reverse mortgage customers, showing them the benefits of reverse mortgages and creating better retirement outcomes. It would be helpful for loan officers to focus on building those relationships with attorneys and financial planners—and maybe small commercial banks and credit unions—to get Mike Kent, President, Liberty Reverse Mortgage By Darryl Hicks Mike Kent From the Top continued on page 12 REVERSE MORTGAGE / MARCH–APRIL 2023 11
From the Top our product top of mind for them as they work with their customers. I still believe the best days for reverse mortgages lie in front of us. RM: What’s involved in being co-chair of NRMLA? MK: One of the best things to have come out of my service to the association has been the friendship that Scott and I have developed over these past several years and coming to understand what a good, decent human being he is, and the tireless work he does on the political side ensuring the right folks in Congress understand and support our products. The other plus of being co-chair is the interaction with the NRMLA staff. From NRMLA President Steve Irwin to you and others, it’s an incredibly dedicated group of people who come to work every day, roll their sleeves up and get to it. The other added value for me is getting to know NRMLA CEO and Founder Peter Bell, who has a deep well of knowledge, not just about reverse mortgages but the inner workings of Washington and how we need to navigate the political front and the agency front advocating for our products and our customers. And then, finally, it has been rewarding to get to know so many people and so many members. Whether it’s someone on the Board of Directors or a member of the association, I try to make a handful of calls every week to check in with NRMLA members and see how things are going. That’s a really important part of staying closely connected and grounded with the membership. I’m honored and humbled to have been elected to a fourth term as co-chair. It’s a lot of work. Scott and I probably dedicate somewhere between four to five hours a week, sometimes more, in the pursuit of it. When I look back over my career, it’s one of the absolute highlights of my entire career, whether it be in forward or reverse lending. RM: What are your top priorities for NRMLA in 2023? MK: One of the top priorities for our industry—let’s start there—is to find ways to expand our distribution reach. We need more well-trained people out there offering reverse mortgages. NRMLA contributes to that, but I don’t think that’s NRMLA’s mission. NRMLA’s mission is to serve its membership by ensuring that we have a sustainable product to offer to the marketplace. We do that by working with the regulatory agencies, the legislative branch and the administration to ensure we have ample support. NRMLA does a rock-solid job at that. NRMLA also fills an educational role for people who are currently in the business and want to learn more and for people who are new and want to learn from the beginning. For 2023, we’ve put together a package of program improvements that we think will benefit the entire industry and the seniors we serve. One of our top priorities should be to get that bundle of proposals into the U.S. Department of Housing and Urban Development (HUD) and start working the process of getting, if not all, at least the majority of these ideas adopted and put into place. RM: When the Board of Directors met in November to start thinking about the new year, you briefly mentioned you’d like to see a future leaders group formed. What do you envision? MK: We need to bring new voices and new ideas to leadership roles on our committees and ultimately to the Board of Directors and the Executive Committee. This needs to happen not just within NRMLA but also within our own companies. Many companies have embraced policies around diversity, equity and inclusion. That’s a great way to bring new voices into the fold and prepare them for leadership positions. I’d like to see the association formalize a future leaders program similar to what they’ve done at the Mortgage Bankers Association that prepares people from an educational perspective and a thought perspective to take on leadership roles not only within the association but also within their companies. And I think that NRMLA can play a fairly important role in that. RM: I’d like you to touch on the relationships that NRMLA has developed with the Federal Housing Administration (FHA), Consumer Financial Protection Bureau (CFPB) and Congress and how they have evolved since you started serving on the Board of Directors. MK: NRMLA has always enjoyed good relationships with the various administrations, regulatory agencies From the Top continued from page 11 12 REVERSE MORTGAGE / MARCH–APRIL 2023
From the Top and other stakeholders. But what has changed over the past five or so years is that agencies we used to go to with ideas—CFPB, FHA/HUD—are now coming to us and asking, “What do you think?” We meet regularly with the senior leadership at Ginnie Mae, and they’ll ask, “What’s the market look like to you? This is what it looks like to us.” The level of engagement and collaboration has ratcheted up. When I sit in those meetings, I get a real sense of partnership. I think we’ve proven to CFPB, FHA and Ginnie Mae that we are honest brokers of ideas that can help the HECM program, help our seniors and help the agencies better implement and regulate it. They don’t see us as representing a constituency anymore. They see us as something bigger, and that’s a good place to be. We’ve proven ourselves time and time again that we’re a source of honest information. One of the things we do well is that when we go to FHA or other regulators, we go with the facts. We’ve done an analysis. It’s not just what we think, and what we feel, but we back it up with data. If we go to them and give them an idea, give them the facts, support it with data, and then show them why they can do it and how they can implement it, you’ve built a great relationship. You’ve taken a load off their plate. RM: Everybody is hoping the Federal Reserve stops raising rates soon. If we see rates stabilize in 2023, do you see that having an immediate positive impact on the reverse mortgage marketplace? MK: I believe there have been enough rate hikes that now need some time to work their way through the economy. It generally takes somewhere around six months for a rate hike or decrease to work its way through the economy. We’ve had four, so I think we need to give it some time to see how it works. I think it’s going to have its desired effect. If the Fed signaled it was going to pause or stop raising rates, it could have an immediate effect on our industry and allow us to provide more proceeds to the borrower. FHA increasing the 2023 maximum claim amount to $1,089,300—an increase of $118,500 from 2022—will give a little boost to the industry, too. We have to get out of our head that “Oh, things are terrible. My borrower could have gotten so much more money last year.” OK. But last year was last year, and your borrower didn’t get any money last year because they didn’t get a reverse mortgage. Today, we have 26 million households who can qualify for a reverse mortgage. That should be the center of our thought process. If we spend our time figuring out how to access these households, we could still have a pretty decent 2023. Nationwide Full-service title & settlement services. Accurate closings that leave your senior borrowers happy! Experienced Seasoned experts matched to the unique needs of your transaction. Hassle Free Assistance & 1-on-1 training every step of the way. AllegiantReverse.com Toll Free: 844.808.8299 Reverse Done Right. REVERSE MORTGAGE / MARCH–APRIL 2023 13
Business Founder Builds Bridges in Reverse Industry, Community A Chat With George Downey, CRMP, and founder, Harbor Mortgage Solutions, Braintree, MA By M. Diane McCormick George Downey OLDER AMERICANS ARE a sacred protected class with “one bite of the apple” to extract value from their home equity, says George Downey. “It’s critically important they do the right thing. And it’s our job, along with their financial adviser, to help them understand how a reverse mortgage might be a good idea and how it might fit in with their plan,” Downey says. “On the other hand, it’s our job to help them understand why it may not be a good idea, and perhaps a different course of action might be best.” In a career that spans decades, Downey has built bridges from reverse mortgages to financial planning, while also devoting his civic efforts to ensuring others a safe home and food on the table. Among his many achievements, Downey earned the CRMP designation in March 2013, and he received NRMLA’s Distinguished Service Award this past year for his CRMP: Across the Kitchen Table 14 REVERSE MORTGAGE / MARCH–APRIL 2023
Across the Kitchen Table continued on page 16 CRMP: Across the Kitchen Table legislative and philanthropic efforts. He also is a recipient of the President’s Daily Point of Light Award from Presidents George H.W. Bush and George W. Bush. Starting Career in Financial Services Downey’s career began in financial services and wealth management with Merrill Lynch, after military service, preceded by a degree in accounting from Boston College. In 1991, he founded Harbor Mortgage Solutions. In their infancy, reverse mortgages weren’t part of his practice. Then, around 2001, Harbor Mortgage was called into the case of an elderly woman who was being victimized in a land grab by a neighbor threatening to foreclose on a privately funded reverse mortgage. The woman died soon after Harbor Mortgage became involved, but the experience opened Downey’s eyes to the intriguing potential and versatility of reverse mortgages as a tool for financial and retirement planning. “As we became aware of the Federal Housing Administration HECM program, that is what really lit the lamp for us,” he says. While the firm still provides forward mortgages, its specialty has morphed into reverse mortgages, leading the way in Massachusetts. The firm continues to partner with financial advisers typically serving what Downey calls “strategy clients”—clients considering using their home equity to plan for retirement and life goals. The transition wasn’t always easy, especially in the early days. For most people, home equity is their largest single asset. But in the financial planning realm, it was “off to the side,” with a predominantly negative reputation, Downey says. Financial planners accustomed to working with cash flow and liquidity tended to view home equity as illiquid, “like a big block of ice that is sitting Partnership you can trust. Dedicated to never competing with you - your success is our success. Ready to experience the difference? Visit Celink.com Deep Industry Experience 96% Borrower Satisfaction Rating Independence and Alignment with Clients Robust Specialized Technology Reverse Mortgage Is Our Core Competency © Celink. All rights reserved. NMLS #3020 - http://nmlsconsumeraccess.org. Compu-Link Corporation dba Celink (WA license# CL3020 and 603 018 607) REVERSE MORTGAGE / MARCH–APRIL 2023 15
CRMP: Across the Kitchen Table in your backyard, and you can’t get access to it, but it’s there and is potentially significant.” Fast forward to the COVID-19 pandemic and post-pandemic eras. Attitudes have changed amid skyrocketing home values. The value of that block of ice has grown, but it’s still illiquid. At the same time, instability in financial markets has planted the fear of running out of money into the minds of retirees and those planning for retirement. “Here is where the reverse mortgage really can shine,” says Downey. “When it is properly understood and explained, it enables the financial advisers and their clients to be able to tap into home equity, to create liquidity, to melt some of that ice. The reverse mortgage product is really a gateway for people to expand their current financial and retirement resources to achieve the security they’re looking for.” Headwinds Persist Still, headwinds remain. Some financial advisers are catching on, but many others still lack an understanding of the product. They don’t mention it for many reasons—fear of looking unknowledgeable, compliance policies at their firms that prohibit discussing home equity, lack of revenue from reverse mortgages and fiduciary prohibitions against recommending that clients invest with borrowed money. This is where Downey and his team emphasize their roles as educators and “translators,” explaining a complicated concept in simple terms. They present the pros and cons of reverse mortgages, making it clear the product shouldn’t be sold but prescribed, if it fits, to address the needs of clients under particular circumstances. “Given the tumultuous times we’re in right now with financial markets, home equity is for many people not only a last resort but also the best result to restructuring financial arrangements, so the financial planners can help them take full advantage of all of their assets, not just some of their assets,” Downey says. One financial planner educated in reverse mortgages compared them to a Swiss Army knife loaded with multiple uses. Such properly educated financial advisers bring Harbor Mortgage into their conversations with clients to explain reverse mortgages. “They’re not recommending the reverse mortgage,” Downey says. “What they’re recommending is that the client understands what it is and what it isn’t.” Strict ethics guide the selling process, Downey says. At Harbor Mortgage, Rule No. 1 is, “Do the right thing for each client every time.” Rule No. 2? “Don’t break Rule No. 1.” Status of CRMP Downey’s CRMP “absolutely” fits into that strict code of ethics. “The CRMP identifies people who are really serious about this business,” he says. “CRMPs are like the Eagle Scouts of the business. They’ve been tried. They’ve been tested. They are held to a higher standard, and that should be recognized.” For 13 years, Downey served on the NRMLA Board of Directors. He marveled at the association’s capabilities to convene competitors to collaborate for the good of the industry and the leadership that has sustained the association. As an industry advocate, he is working with Harbor Mortgage Solutions partner Brett Kirkpatrick to permanently repeal a burdensome Massachusetts law— suspended for the COVID-19 pandemic but sunsetting in March 2023—that requires in-person counseling for consumers seeking reverse mortgages. “We’re not there yet, but we’re close,” he says. Downey’s commitment to civic causes originated with Boston College, the Jesuit institution educating students for the service of others. While serving on Boston College’s Alumni Association board in the late 1980s, Downey cofounded the groundbreaking Second Helping to collect perishable food from restaurants, corporate cafeterias and other eateries and redistribute it through the Greater Boston Food Bank. The program, among the first of its kind in the country, ran successfully for 18 years. Through the alumni board and by tapping into connections made through his civic service, Downey also helped launch Rebuilding Together America, originally Christmas in April*Boston, to recruit volunteers to refurbish the homes of people in need, especially low-income elderly individuals. “Through volunteerism, Across the Kitchen Table continued from page 15 16 REVERSE MORTGAGE / MARCH–APRIL 2023
CRMP: Across the Kitchen Table you find there is real meaning, that to do well you have to do good,” Downey says. “By doing good and getting involved, you also meet a lot of people, a lot of really good people who are similarly motivated. Friendships form from that. It all gets back to doing the right thing for each client every time. In hindsight, some of the best deals we’ve done were deals we didn’t do.” Looking back on his career in reverse mortgages, Downey recognizes those people for whom reverse mortgages were and weren’t a solution. Twice, he has thwarted the fraudulent designs of drug-addicted children trying to gain control of their parents’ assets. In a situation with a happy ending, a reverse mortgage helped the wife of a divorcing couple buy complete ownership of their home, while the husband used a separate reverse mortgage to buy a condo for himself. Reverse mortgages truly are, as the financial planner once said to Downey, a Swiss Army knife—a message reverse mortgage professionals have a responsibility to understand and share. “There’s so much versatility if you take the time to learn what it’s about,” he says. “It has limited capabilities, but it has versatile capabilities. The question is, ‘How does it fit into a given situation?’ My recommendation is not that you should or should not do a reverse mortgage. Our recommendation is that you should understand it—and understand that if you own a home and have equity in your home, you have choices available to you. “Whether or not you use that choice, that’s up to you. But you shouldn’t just proceed in ignorance nor should your financial adviser not address that topic with you and make you aware of what your possibil- ities are,” adds Downey, whose son, Christopher, is Downey’s partner and a member of the NRMLA Board of Directors. “It gets back down to education. We’re educators.” REVERSE MORTGAGE / MARCH–APRIL 2023 17
Sales Leaders See New Tools, Strategies Capturing More Clients By Joel Berg Marketing for the Future continued on page 22 FOR THE REVERSE mortgage industry, 2023 is shaping up as yet another year to make a pivot. But instead of adjusting to the COVID-19 pandemic that prevented face-to-face communication, loan originators are adjusting to a steep drop in the refinancing business. They are now focused on generating new customers from among the millions of seniors who have built up substantial home equity and could benefit from a reverse mortgage. FUTURE MARKETING for the 20 REVERSE MORTGAGE / MARCH–APRIL 2023
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Marketing for the Future continued from page 20 “That’s all about education, and it’s all about addressing the barriers that are out there,” says Christopher Moschner, chief marketing officer for American Advisors Group (AAG), based in Irvine, CA. It’s also about using new technologies, broadening the distribution network and reaching out to the people who can influence seniors’ decision-making, according to Moschner and other marketing executives in the reverse mortgage industry. For Moschner, the best approaches start with meeting customers where they are. For instance, the reverse industry has tended to discuss retirement as an endpoint. But many seniors see it as the beginning of a new stage of life, albeit one they might not be fully prepared for financially, he says. “Seniors may have 20 or 30 years ahead of them. What role can our products play in that journey?” By focusing on new borrowers, lenders can build a more solid footing for the future, he adds. “The interest rate and macroeconomic environment are going to ebb and flow,” Moschner says. “But if we have dedicated marketing investment and messaging around bringing new people in and driving household penetration, that puts the industry in general and AAG itself on a more stable path.” The need for the reverse product is unlikely to diminish any time soon as people look for ways to fund their retirement, says Ryan Schmidt, wholesale marketing director for Tulsa, OK-based Finance of America Reverse (FAR). (Finance of America Cos. Inc., parent company of Finance of America Reverse, announced in December that it was acquiring the assets of AAG.) “Some people see these as tough times. We see this as an opportunity,” Schmidt says. To make the most of that opportunity, loan originators will need to examine their approaches and make whatever changes are necessary, he adds. Younger originators who came into the industry during the refinancing boom, for example, may need to refocus on how they educate potential borrowers, Schmidt says. Instead of focusing on the numbers, which play a big role on the forward side, younger originators can help seniors understand the role a reverse mortgage plays in retirement planning. “We want to start the conversation about what their life could look like with a reverse mortgage in place,” Schmidt says. “Then you can go into ‘this is how it works.’” Younger originators also may need ideas for generating leads, an area where FAR can help, Schmidt says. “We have a great lead-generation guide at FAR that offers several ways for loan originators to find leads with little to no cost.” Veteran originators likely already understand how to dig up leads and present a reverse mortgage, Schmidt says. But they may need to burnish their digital and online footprints and learn how to connect virtually with potential borrowers, whether by phone or video call, Schmidt says. Technology Indeed, continuing trends accelerated by the COVID19 pandemic, digital tools and approaches will continue to play a growing role in marketing for reverse mortgages. “Whether it’s fashion, consumer goods or reverse mortgages, data and technology are becoming paramount in marketing,” says Moschner, who brings experience from consumer products giant Procter & Gamble, whose brands include Charmin, Febreze, Gillette and Pantene. New tools allow for greater automation but also greater personalization of the messages people see, he says. The end goal is to create a customer journey that guides more people through the sales funnel, from initial contact all the way to closing. Ryan Schmidt Christopher Moschner 22 REVERSE MORTGAGE / MARCH–APRIL 2023
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