www.nrmlaonline.org The official magazine of the National Reverse Mortgage Lenders Association May-June 2023 Volume 16, No. 3 INSIDE: Counselors Cut Confusion Understanding Longevity P.26 P.30 Deputy Assistant Secretary Talks About HECM Counseling Operations COUNSELING the COUNSELORS
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From the Top Paul Francom, CRMP, reverse mortgage operations manager, Academy Mortgage By Darryl Hicks 11 Those We Help Angler catches dream homes with reverse mortgages By Darryl Hicks 33 May/June 2023 Volume 16, No. 3 Contents CRMP: Across the Kitchen Table A chat with Dean Jones, CRMP, Senior Funding Associates, Calabasas, CA By M. Diane McCormick 14 Features 20 Counseling the Counselors Deputy Assistant Secretary talks about HECM counseling operations By M. Diane McCormick 26 Counselors Cut Confusion Experts: Sales performance improves with better educated reverse mortgage borrowers By M. Diane McCormick 30 Understanding Longevity Study shows many people don’t plan for long life spans By Joel Berg Columns 3 In Reverse Time enhances reverse mortgage appeal By Thomas A. Barstow 5 Steve Irwin: Moving Forward New ideas emerge for enhancing reverse mortgage products 6 Board Room Counseling process supports borrowers and reverse mortgage industry By Jennifer Cosentini Departments 2 Scribes Meet this month’s contributors 8 Hey, Members A roundup of issues and news for NRMLA members 34 Member News Who’s who in reverse mortgages 36 Numbers AAG survey examines retirement crisis 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 Natalie Matter Bellis (natalie.matterbellis@ 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) 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 a former president of the Pennsylvania Society of News Editors and a former president of the Associated Press Media Editors in Pennsylvania. Joel Berg (Understanding Longevity, p. 30) 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. Jennifer Cosentini (Board Room, p. 6) is the housing director at Cambridge Credit Counseling Corp. She oversees all aspects of the company’s housing counseling service offerings, including program development, execution, analysis, evaluation, innovation and refinement, and internal and external partnership management. Other responsibilities include supervising all counseling staff, hiring and training new staff as needed, and ensuring the program pipeline from intake to filing closure meets or exceeds national industry standards and complies with all funding and regulatory requirements. She also is a U.S. Department of Housing and Urban Development-certified housing counselor and has personally counseled over 3,500 potential reverse mortgage borrowers since 2011. Darryl Hicks (Hey, Members, p. 8, From the Top, p. 11, and Those We Help, p. 33) joined NRMLA in May 1999 and currently serves as vice president, communications. He 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, Counseling the Counselors, p. 20, and Counselors Cut Confusion, p. 26) 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 / MAY–JUNE 2023
In Reverse Time Enhances Reverse Mortgage Appeal By Thomas A. Barstow A FEW YEARS ago, when I was in my late 50s, I wrote about how I understood why reverse mortgages could be great for some people but had determined a HECM or proprietary product wouldn’t be good for me. Since then, and as I approach 62 late this year, I am not so sure that will always remain the case. For one, it has become clear that my son has no interest in owning my home, even though it is close to being paid off. And I increasingly see the appeal of qualifying for a solid line of credit or having another way to back up my careful retirement planning. If the time comes, I will appreciate professionals who give me frank assessments of whether the reverse mortgage is a tool I should—or perhaps should not—use. I thought about those issues as I read the articles in this issue of Reverse Mortgage. We spend a great deal of time talking to experts who specialize in reverse mortgage counseling, as well as loan officers who understand consumer education never ends. People who might have had no interest in a HECM years ago might suddenly find the products now could fill a need. The experts make the connection that loan originators who act as advisers not only can help people but also boost the overall reputation of the reverse mortgage industry. Dean Jones, CRMP, who has been working with reverse mortgage clients for decades, makes that point plainly. He is the subject of the CRMP: Across the Kitchen Table profile (p. 14). “Back in '93, the question was, ‘What’s a reverse mortgage?’” Jones says in the article. “Nowadays, in 2023, everyone thinks they know what a reverse mortgage is, and they’re still usually wrong.” Seeds of long-ago encounters can grow as potential clients learn more about reverse mortgages, and unforeseen events make the products appealing in ways that might not have been obvious months or years before. Jones has developed a referral network but says he never stops educating individuals and looking for opportunities to tell stories about the products. He understands circumstances change, so he reconnects with people who either rejected the product or didn’t see a clear need at the time. Those who are trained and hired to explain how reverse mortgages work—the counselors who must review the details with a potential borrower—run into obstacles over misinformation all of the time. Jennifer Cosentini, housing director at Cambridge Credit Counseling Corp., outlines how the job of a counselor involves much more than relaying facts. “Good In Reverse continued on page 4 REVERSE MORTGAGE / MAY–JUNE 2023 3
housing counselors are actually educators,” Cosentini says in the Board Room column (p. 6). “They are empathetic and compassionate, and they have a need or desire to help others.” Rather than present the counseling process as a hurdle to getting a loan, she suggests industry professionals should tout counseling as a worthy service that is a good use of a potential client’s time. We also hear from David Berenbaum, who leads the U.S. Department of Housing and Urban Development’s Office of Housing Counseling. He has been intent on working with the industry, particularly NRMLA, to finetune the counseling process to make it more accessible to borrowers while further protecting them from potentially detrimental decisions. The growth in counseling services this past year—a 24 percent increase from fiscal year (FY) 2021 through FY 2022—demonstrates the growing popularity of the product, he also points out. “There’s a lot of opportunity for growth, and I think there’s tremendous opportunity for closer working relationships between the reverse mortgage industry and the housing counseling agencies,” he says in the cover story, Counseling the Counselors (p. 20). All of that is heartening at a time when financial literacy remains a problem nationwide. Another article, Understanding Longevity (p. 30), explains how many people simply don’t understand how long they might live in retirement. Underestimating longevity can greatly undermine the best-laid retirement plans, according to the survey from TIAA Institute and the Global Financial Literacy Excellence Center at The George Washington University. That report is further backed up by the sobering statistics in a recent AAG survey that shows few people are confident about their retirement situation. Some of those details can be found in the short article in the Numbers feature (p. 36). Reverse mortgages, of course, can fill many holes in retirement planning. As someone who expects to live until 100 and to work another ten years, I fully understand how I might want that tool in my financial toolbox. And for anyone who wants to listen, I will explain how it might work well—or not—for them. In Reverse In Reverse continued from page 3 Precise Control. Expert Execution. ASSET MANAGEMENT SOLUTIONS Five Brothers’ reputation for integrity, accuracy, and reliability has been built upon a relentless drive towards customer satisfaction. For over 55 years our expertise in nationwide field services, advanced technologies, and unrivaled Reverse/HECM/FHA expertise continues to build value for our customers, while improving communities across the country. Experience the Five Brothers difference… stronger results from the ground up.™ www.fivebrms.com • 855.552.8020 Inspections • Property Preservation • Violation Resolution Utility Management • Registration Services • Hazard Claim Repairs REO Asset Management and Disposition Safe. Sound. Secure. 4 REVERSE MORTGAGE / MAY–JUNE 2023
Moving Forward New Ideas Emerge for Enhancing Reverse Mortgage Products Broadening Accessibility to Products Would Help Potential Clients By Steve Irwin, President, National Reverse Mortgage Lenders Association “Be authentic. Be yourself, and work at places that really welcome who you are. You’ll get up every single morning passionately committed to making a difference. Leave your fingerprints. Really think about … what’s the impact that I had because of this job?”—Karen Lynch, president and CEO, CVS ACCORDING TO THE 2021 Profile of Older Americans, as published by the Administration for Community Living, “Of the 14.1 million households headed by persons aged 75 and older in 2019, 77 percent (or 10.8 million) owned their homes and 23 percent (or 3.3 million) rented. The median household income of older homeowners was $36,200. The median household income of older renters was $18,280. In 2019, 45 percent of older householders spent one-third or more of their income on housing costs: 36 percent for owners and 76 percent for renters.” As we all know, housing wealth remains one of the greatest assets for much of the ever-increasing population of older homeowners in the United States, and the ability to access that equity, under the right circumstances, is the key to enabling a more secure retirement. How then can we, as an industry, broaden the accessibility to reverse mortgage programs in a boldly creative yet responsible way? Are there product enhancements that might materially improve many of our older homeowners’ standard of living? Some potential solutions to broadening the accessibility of the use of a reverse mortgage might include the following: 1. Reduce the initial mortgage insurance premium for a defined portion of the available max claim limit. Borrowers in lower-valued homes face higher closing costs as a percentage of available loan proceeds. And relatively higher upfront costs remain a barrier to accessing equity for many lower- to moderate- income seniors. An adjustment in the initial mortgage insurance premium may enable many more of our senior homeowners to effectively age in place. 2. Increase incentives to the borrower to use reverse mortgage proceeds to fund home improvements that increase energy efficiency and/or home modifications that help ensure the subject property can properly accommodate the borrower’s ability to continue to age in place. 3. Increase incentives for borrowers who only wish to access a smaller portion of their available equity. The Government National Mortgage Association has already taken a step in incentivizing such program developments by reducing the mandatory pool size, and HECM program enhancements might also be recommended to provide the smaller dollar amounts many senior homeowners need to help close any retirement financing gaps. These are but a few of the recommendations that NRMLA and its Board continue to carefully consider and analyze. Such creative and bold leadership is our best path forward and will further expand the reach of our marketplace so we can meaningfully impact the quality of life of so many of our aging homeowners. Steve Irwin REVERSE MORTGAGE / MAY–JUNE 2023 5
Board Room REVERSE MORTGAGE COUNSELING is a requirement for applicants, but let’s face it, our role in the process is often badly misunderstood. Some applicants think we’re part of some grand conspiracy to take their home while others think we work for their lender. That, at least, seems like it could be true since the lender gave them a list of counseling agencies to contact. We recognize this situation, and we understand we’ll need to work fast to build a productive foundation for our counseling. First, we need to dispel any fears or doubts about our role in the process. Next, we must demonstrate impartiality to help gain trust and open the lines of communication. The information we’re going to discuss must be accepted without reservation because it’s critically important to the homeowner’s happiness with their decisions. Our responsibility is to inform and protect potential borrowers by making sure they understand how a reverse mortgage works. And it’s not just the borrowers who have to complete counseling. Any eligible or ineligible nonborrowing spouse or any nonborrowing owners must also complete the counseling requirement. Among the many issues we must discuss are rising debt, falling equity, borrower obligations, nonrecourse limitations and the eventual repayment of the loan—all topics that make a HECM much more complex than the loan used to purchase the home in the first place. If we only had to relay a list of facts, our job would be relatively easy. But good housing counselors are actually educators. They are empathetic and compassionate and have a need or desire to help others. Speak Jennifer Cosentini Counseling Process Supports Borrowers and Reverse Mortgage Industry By Jennifer Cosentini 6 REVERSE MORTGAGE / MAY–JUNE 2023
to any one of our exam-qualified, U.S. Department of Housing and Urban Development-certified housing counselors at Cambridge, and you’ll quickly realize they all have this in common. Counselors explain a complex subject in a way that allows clients to understand and retain the most important points. They break down difficult subjects into easier steps, use vocabulary to suit individual needs and find ways to link new ideas to more familiar ones. They want to educate and help clients make decisions they can live with. Right now, we’re seeing firsthand the unprecedented financial challenges older adults are facing across the United States. Many clients we speak with are struggling to pay their basic living expenses or have no realistic way to plan for emergencies. A portion of our counseling session is devoted to screening for public and private benefits that can help clients pay for needs such as food, utility bills, prescription costs, home care and other everyday expenses. Being able to provide these resources is one of the most rewarding aspects of our job. The reverse mortgage counseling requirement should never be minimized or trivialized. It’s an opportunity for potential borrowers to meet with an unbiased expert in the field who can help them assess their overall needs, locate resources and help them make informed decisions about their most important asset. I invite reverse mortgage loan officers to emphasize the value of counseling when speaking to their clients about that next step. A HECM is a complicated often misunderstood product, and we all need to work together to ensure applicants fully understand it before making a commitment. One way or another, each homeowner’s decision affects the way reverse mortgages are perceived in the marketplace. It is ultimately the responsibility of loan officers and counselors alike to continue to improve the reputation of this vital program. 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) Board Room REVERSE MORTGAGE / MAY–JUNE 2023 7
Senior Home Equity Exceeds Record $11.81 Trillion When NRMLA was in its infancy and looking for ways to generate media coverage for the reverse mortgage industry, we all agreed that journalists love data. The bigger and more intriguing the number, the better. That led us to RiskSpan, a data analytics firm based in Northern Virginia that helped us create the Reverse Mortgage Market Index (RMMI), a quarterly number that measured home equity held by homeowners who could qualify for a reverse mortgage. With the exception of the Great Recession from 2007 to 2008, the RMMI has steadily increased over time. On January 13, NRMLA announced that senior home equity had grown by 1.95 percent, or $226 billion, in the third quarter of 2022 to a record $11.81 trillion. The RMMI rose in Q3 2022 to 413.22, another all-time high since the index was first published in 2000. The increase in older homeowners’ wealth was mainly driven by an estimated 1.95 percent, or $268 billion, increase in home values, offset by a 1.93 percent, or $42 billion, increase in senior-held mortgage debt. Hey, Members A Roundup of Issues and News for NRMLA Members By Darryl Hicks Darryl Hicks 8 REVERSE MORTGAGE / MAY–JUNE 2023
Congress Passes Law Modernizing Retirement System One of the few bipartisan issues Congress can agree on is improving the U.S. retirement system. On December 30, the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act—a bill featuring more than 100 provisions aimed at modernizing and improving key aspects of the U.S. retirement planning system—was signed into law by President Joe Biden. SECURE 2.0 builds on other improvements signed into law during the Trump administration. Among the key takeaways, SECURE 2.0: • Incentivizes small businesses to offer employee retirement plans by making the setup process easier and less costly; • Raises the age consumers must start taking money out of their retirement accounts from age 72 to 73 beginning January 1, 2023, and further increases it to age 75 beginning January 1, 2033; and • Creates a national lost-and-found registry and system for retirement account identification. Americans can work for a lot of companies over a span of 40 to 50 years. People who are approaching retirement have potentially significant wealth spread around multiple recordkeeping platforms from prior employers. This system will help identify every penny consumers are entitled to. Jamie Hopkins, one of the top retirement experts in the United States and a former NRMLA speaker, published a video summary you should check out at https://youtu.be/6yz9WUTmPuc. Urban Institute Offers Solutions for Improving HECM Program We were all saddened by Reverse Mortgage Funding’s bankruptcy this past fall. In late January, the Urban Institute published an op-ed that proposes policy changes to the HECM program to guarantee its long-term financial stability and to protect other companies from meeting the same fate. The op-ed explains how Ginnie Mae requires issuers of HECM mortgage-backed securities (HMBS) to buy out loans from a HMBS pool once they reach 98 percent of the maximum claim amount. Issuers assign eligible loans to the Federal Housing Administration (FHA), which takes over all financial responsibilities for the loans and reimburses the lender for the buyouts. The op-ed authors—housing experts Jim Parrott and Laurie Goodman and former Ginnie Mae President Ted Tozer—highlight that “the challenge lies not with the assignable loans but with the one in five loans that are not assignable. FHA will not accept the assignment of any loan with delinquent taxes or insurance payments, forcing the servicer to sort through and resolve any outstanding borrower obligations first.” It can take months and years to bring a loan current to the point where it’s assignable while the costs for holding these loans on the issuer’s balance sheet keep adding up. In other words, lenders with sizable portfolios of seasoned loans that are approaching 98 percent of the maximum claim amount face tremendous liquidity challenges, say the authors. “The most effective step policymakers could take to address the problem is for the FHA to accept the assignment of all loans automatically upon buyout,” says the op-ed. “This would remove the prohibitive costs of holding nonassignable loans and reduce the costs of holding assignable ones by reducing the time it takes to be reimbursed.” In addition, allowing HECM servicers to continue servicing loans once they have been assigned “would prevent the costly and cumbersome transfer process and leave the loan in the hands of those better equipped to service them, reducing costs to the servicer and the FHA alike.” These proposals align with policies that NRMLA has been advocating for. You can read the op-ed at https://bit.ly/3XI1IqR. NRMLA Comments on Appraisal Reconsideration Proposal On January 12, the Federal Housing Administration (FHA) announced plans to create a process that people seeking FHA financing can use to request a review of their appraisal if they believe the results may have been skewed by racial bias. Hey, Members Hey, Members continued on page 10 REVERSE MORTGAGE / MAY–JUNE 2023 9
Hey, Members On behalf of its members, NRMLA submitted comments to FHA on this proposed policy change that’s intended to strengthen requirements for processing and documenting reconsideration of valuation (ROV) requests. FHA says the purpose of the policy change is to improve the process when prospective borrowers applying for FHA-insured mortgages request an ROV on a property if the initial valuation is lower than expected, there is an indication of illegal bias, fair housing regulations have been violated or unlawful discrimination has been identified. FHA also proposes updated appraisal review standards intended to provide mortgagees and appraisers with clarifying guidance regarding the quality of an appraisal report and the ROV process and responsibilities. More States Adopting Master Plans for Aging We’ve all seen surveys showing that older adults would prefer to age at home or in their community rather than in assisted living facilities or other institutional settings. Experts are saying that could be difficult or impossible if states do not prepare comprehensive integrated long-term strategies and policies to help them. A January 31 article published by Next Avenue examines a growing trend among states to create master plans for aging (MPAs) that identify the entirety of state, county, local and federal policies and programs that directly or indirectly affect aging residents, including health, transportation, housing, workforce, nutrition, home and community services. By developing a master plan, state officials say they can more readily make sure these diverse programs and agencies coordinate to keep the needs of aging adults at the forefront. New York is the latest state to authorize the creation of an MPA, while California, Colorado, Texas, Minnesota and Massachusetts have fully developed and started implementing plans. Vermont is developing a plan but has not yet rolled it out. In addition to New York, Oregon, Washington state, Hawaii, Michigan, Illinois, Florida, New Jersey, Connecticut, Maine and the District of Columbia are in the early stages of strategizing and developing ideas. You can read the article at http://bit.ly/3E3KLjB. Submit Your Questions or Comments I’d also like to use this column to respond to questions you may have about NRMLA, the 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 / MAY–JUNE 2023
From the Top HAD IT NOT been for his grandmother, Paul Francom may never have become a reverse mortgage executive and advocate. In high school and college, Francom worked for his father, a branch manager for Republic Mortgage. In 2004, his grandmother applied for a reverse mortgage to cover basic living expenses after her husband died. Republic did not offer reverse mortgages at the time, but Francom and his dad immersed themselves in the regulations and learned as much as they could. The positive impact the reverse mortgage had on his grandmother left an indelible mark that inspired him to enter the reverse mortgage business full time. Republic Mortgage was soon offering reverse mortgages. Within two years, he was managing that part of the business. Today, Francom oversees reverse mortgage operations for Academy Mortgage, one of the largest independently owned mortgage companies in the United States. This past year, it ranked 31st in the country for HECM originations. Reverse Mortgage magazine sat down with Francom to discuss his approach to managing a reverse mortgage division and building success. Reverse Mortgage: How did you get your start in reverse mortgages? Paul Francom: I have dabbled in the mortgage industry since I was a teenager. When I was 14 years old, I worked in the mailroom for my dad’s branch office during summers and holidays. My father was a branch manager for Republic Mortgage, but I had uncles and other family members working in the mortgage business, too, so it’s in the blood. In late 2003 and early 2004, my grandma started looking into getting a reverse mortgage. This was new to us. My dad’s business focused on [Federal Housing Administration] streamline refinances, so nobody really knew anything about reverse mortgages. He flew up to Washington and took some classes from Seattle Mortgage Corp., and he brought back a binder full of study material. I was studying engineering, and I saw this material and was captivated. I love the mechanics of the reverse mortgage. I read the HECM Handbook 4235.1 and all the mortgagee letters. I soon decided to go full time into reverse with my dad. I love how the reverse mortgage fits into an overall financial plan for our clients and how it improves their quality of life. RM: Tell us about Academy Mortgage and what distinguishes it from other lenders. PF: Academy Mortgage was founded in 1988 by Dwayne Shaw. In 2015, Academy acquired Republic Mortgage, which is how I came to work here. Academy has a threefold vision that I love—inspire hope, deliver dreams and build prosperity. We inspire hope through the social impact programs that we offer in our communities and worldwide. Home-ownership is a huge dream for many Americans to have a safe, stable, comfortable place to live in. Building prosperity is not just for Academy employees. Of course, we want a job to sustain our families, but we want prosperity for our clients, too. Homeownership is a fantastic way to generate wealth. Academy is headquartered in Draper, UT. We have 2,000 employees and 200 branches in 49 states and the District of Columbia. We’re a top 25 lender and rated No. 1 on Zillow. But what’s more impressive is that we served over 54,000 families last year. We have eight employees who originate reverse mort-gages exclusively. Paul Francom, CRMP, Reverse Mortgage Operations Manager, Academy Mortgage By Darryl Hicks Paul Francom From the Top continued on page 12 REVERSE MORTGAGE / MAY–JUNE 2023 11
From the Top RM: Do you allow your forward mortgage salespeople to originate reverse mortgages, or is there a firewall that separates the two? PF: Our forward mortgage loan officers have two options. They can refer a borrower to one of our fulltime reverse mortgage specialists. I like this option because it allows the forward mortgage team to focus on their bread-and-butter product. It’s hard to specialize in multiple products, especially when they have different guidelines and sales cycles. The referring loan officer can hand over a name and a phone number and get paid a commission if the loan closes. The second option is a certification. If a loan officer wants to add reverse mortgages to his or her business plan, we require four things: 1) read Dan Hultquist’s book, Understanding Reverse; 2) complete five one-on-one training classes; 3) continue taking education classes offered by Academy and our investors; and 4) close a certain number of loans each year. If you’re only closing one reverse mortgage a year, there’s no way you can become an expert. RM: Your company does a lot of social impact work here and abroad. What can you tell us about that? PF: We try to be good stewards of our community and serve those around us. This gets back to inspiring hope— not just in ourselves, but in others. Let’s talk globally. Recently, our team members took time off and paid their way to Verde Sumaco, a small village deep in the heart of the Ecuadorian Amazon, to build concrete pathways. Being in the Amazon jungle, it’s so wet, and without these concrete pathways, you have to wear rubber boots all day, which is not ideal. These pathways improve the quality of life. It’s something small, but it’s having a huge impact on people’s lives. Academy operates an internal website where you can go and see what people are doing in their own communities across America. In Grand Junction, CO, for example, team members are facilitating dog adoptions and supporting and gathering supplies for dogs in need. We have read-a-thons and walk-a-thons to support St. Jude Children’s Research Hospital. One of my favorite activities is food prep. We bring in many pallets of food. We put on our food prep gear—hairnets, masks and gloves—and make these packets that have just the right nutrient profile for those in need. We have 200 branches, and every branch participates. RM: Academy had a pretty decent year in 2022 with production increasing 45 percent from 2021. To what do you attribute that growth and how will you build on that success in 2023? PF: 2022 was a banner year. Like most companies, we benefited from high home values and low interest rates. How do we build on that success? We don’t reinvent the wheel, and we get back to basics. Last year was so easy in terms of qualifying borrowers that we didn’t focus on the basics. People are now scared of interest rates and the possibility that home values will drop, and there might be a recession. People see this negative news, stop what they’re doing, burrow into their holes and stop working. How is not visiting your referral partners going to help? How is not talking to potential clients going to help? It won’t. Visiting referral partners, teaching CE (continuing education) classes, talking to financial planners—in other words, getting out there and doing the work—are crucial. There’s always going to be a need. There’s always going to be a benefit. There’s always going to be a demand for reverse mortgages. I was talking with a loan officer who said she likes this market because many of her competitors are on the sidelines. She’s having more success today than ever. RM: Are there particular approaches to marketing and lead generation that you try to instill in your sales force? PF: I wrote down five things. One, become an expert. Our clients and referral partners want to trust us. When we know what we’re talking about, our clients can feel it and sense it, and it makes it easier to build trust. When you make up answers and fake what you know, people can sense it, and it turns them off. It does a disservice to the entire reverse community. So, study, study, study. Two, focus on respect. Nobody likes it when you’re talking with somebody, and they discount your experience. Don’t do that to our referral partners, or especially our clients. The community that we serve has so much experience, and we need to respect that. Three, be a good listener. Do you care about your client as a person, or do you see them as a dollar figure? Be a good listener From the Top continued from page 11 12 REVERSE MORTGAGE / MAY–JUNE 2023
From the Top and show that you truly are concerned about them and that they are valued. Four, expect questions. The public is more familiar with traditional mortgages. Reverse mortgages can be complicated. Not everybody has a finance degree, so it’s important to expect questions. If someone isn’t asking questions, then probe and make sure they truly understand the reverse mortgage. Make sure to show grace and respect when responding to questions. Lastly, open your mouth. Make sure everybody in your sphere of influence knows that you offer reverse mortgages and how fantastic they are for the right people. RM: What are the biggest challenges you’ve encountered managing a reverse mortgage division and how have you overcome them? PF: Knowledge is a big one. Reverse mortgages are a different animal with different guidelines. Instilling knowledge is a challenge. Someone can take our certification program, but there will still be knowledge gaps, whether it’s with life expectancy set-asides or collateral risk assessment. The only way to overcome this challenge is to continuously offer CE classes and to talk through these issues with our teams. Another challenge is overcoming the negative stigma that reverse mortgages still have. People buy into the negative news and the extreme situations when a grandmother is foreclosed on, and she’s out of her home because of a reverse mortgage. I don’t want to minimize hardships for the people who have experienced them, but that’s not why we’re lending. We want reverse mortgages to be a sustainable solution. To overcome the negative and unfair beliefs, we focus on the positives like how a reverse mortgage can improve a person’s quality of life or extend the life of his or her assets and investments. The last challenge is marketing. This year, people are pinching pennies. Maybe we need to learn new marketing strategies involving Facebook and LinkedIn or go to referral partners and build those relationships. RM: What are your professional goals for 2023? PF: I want to help more new people get a reverse mortgage, so my first goal is to increase production and build momentum. I want to continue to increase my reverse mortgage knowledge. Who knows, maybe the HECM Handbook will get published this year. That would be something to study. I also like to increase my knowledge through different case scenarios. I’d like to see more challenging deals so that we can figure out how to make them work and be creative in the future and help more people. Another goal is to increase product awareness throughout Academy. We still have a lot of employees who haven’t been exposed to all the benefits of a reverse mortgage. It’s a large company, so we still have a lot to do internally. Financing Seniors’ Independence Serving Utah and Idaho for Over 20 Years We opened our doors in 1999 to provide local homeowners and those wishing to be homeowners good quality mortgage loans with no hidden surprises or costs. We pride ourselves on being customer oriented and find loans that are tailor made for our clients. We added the reverse mortgage loan to our great line of product offerings and have been providing the people of Utah and Idaho this loan as another mortgage available to meet whatever financial need arises. We continue to remain committed to our clients’ mortgage financing needs, and our variety of all residential mortgage loan products makes us a great company to add to your network of professionals. FSI Mortgage Independence Square 111 East 5600 South • Suite 102 Murray, UT 84107 • NMLS #4398 www.fsimortgage.net 1-800-808-3066 REVERSE MORTGAGE / MAY–JUNE 2023 13
CRMP Caps Lifelong Career for California Loan Officer A Chat With Dean Jones, CRMP, Senior Funding Associates, Calabasas, CA By M. Diane McCormick Dean Jones DEAN JONES ONCE originated all types of loans. But his longtime, exclusive love for reverse mortgages is on his license plate—the one saying “GOIN REV.” “There’s nothing as satisfying as the reverse mortgage, in my opinion,” Jones says. “It’s nice to help someone buy their first home. But to help someone in their later years, to help them eliminate a mortgage payment or provide them extra monthly advances or set up a line of credit, it’s not only the money to them. It’s the peace of mind.” Jones began his professional career in management for Marie Callender’s restaurants. He started as a busboy, worked his way through college and then traveled for the corporate office as a team leader opening new restaurants and as a quality control specialist for the chain’s locations. When it was time for a change, he went into direct sales, selling monitored home security systems door to door. In those days, he was also serving on his condominium development board with a neighbor, Dan Ryan, who invited him to join his mortgage company. That was in September 1993. On the first day, Ryan suggested that Jones would be a good fit for a newer program called HECM. “Back in '93, the question was, ‘What’s a reverse mortgage?’” Jones says. “Nowadays, in 2023, everyone thinks they know what a reverse mortgage is, and they’re still usually wrong.” More than three decades later, Jones looks back on a fulfilling career. Over that time, he helped 1,500 clients obtain reverse mortgages. The program has changed, but the fundamentals remain the same. “I’m very fortunate that Dan saw something in me,” he says. “It’s been a tremendous ride over the years. Even my own mom has the reverse mortgage.” Jones stayed with Ryan until 1997, before joining a larger mortgage banker, SCME Mortgage Bankers, where a high school friend was the branch manager. Initially, Jones originated all types of home loans, but he was the only person at SCME providing reverse mortgages. As the overall loan market changed, and the company closed in late 2007, he decided to concentrate solely on reverse mortgages. Since March 2012, he has been employed with Senior Funding Associates, based in Calabasas, CA, to place loans. Jones mostly gets clients through referrals, but he still believes in the need for marketing. Over his career, he has done mailings and purchased leads, plus networked with Realtors, financial advisers and other professionals. In addition, he has advertised using print, TV and radio ads, including a series featuring legendary sportscaster George Allen “Pat” Summerall. He has given educational sessions and also simply walked into offices and banks to offer his services to any customers who might benefit from reverse mortgages. “You still need to keep in contact,” he says. “You still need to reach out and find new people.” Jones is licensed solely for California. He travels all over the state, preferring to meet clients in person. “I’m a face-to-face kind of person,” he says. “I want to meet the people. I want to see their homes. It’s a big decision in CRMP: Across the Kitchen Table 14 REVERSE MORTGAGE / MAY–JUNE 2023
CRMP: Across the Kitchen Table their life. I want them to make sure they know who I am and that we work together.” Jones keeps in touch with everyone, whether they are past clients or potential customers who said no but left the door open by saying, “Call me back in six months.” It’s his way of keeping his name top of mind as people’s circumstances change—as spouses die, or medical conditions require home healthcare. He has heard most recently from clients dating as far back as 2004 and 2006. One lead had recently broken her ankle when Jones, as promised, called her back six months after their first conversation. “She said, ‘Hey, Dean, I think I’m ready now,’” he recalls. “It’s about following up.” Although Jones has a brokers license, he has always worked for firms. Because Senior Funding Associates is an independent broker, he can customize recommendations and craft solutions for his clients from a full spectrum of lenders. Often, he has found alternative outlets for clients who couldn’t qualify for a specific lender’s reverse mortgage—perhaps when the client’s manufactured home was new enough for Federal Housing Administration purposes but didn’t fit a lender’s stricter age limits. Others might need a plan for repairing damaged credit. “If, for whatever reason, they can’t get the loan done elsewhere, we try to get the loan completed for them, and if not, we try to put them on the path to get done what they need to do,” Jones says. He believes in giving back to the profession that has nurtured his career. Jones became involved with NRMLA as a member delegate in 2000. From 2005 to 2009, he served on the NRMLA Board of Directors, including a term as board secretary. From 2007 to 2009, he co-chaired the Professional Development Committee. In that spot, he helped lead the creation of the CRMP and its exam. He earned the CRMP in 2012 because he felt it was important to his career and wanted firsthand experience of earning the new industry designation. To him, the CRMP sets him apart; designates standing in the industry; and projects knowledge, experience and ethics. “All the time before, I was basically ‘Dean Jones, specializing in reverse Across the Kitchen Table continued on page 16 REVERSE MORTGAGE / MAY–JUNE 2023 15
CRMP: Across the Kitchen Table mortgages,’” he says. “Now, it’s ‘Dean Jones, Certified Reverse Mortgage Professional.’” Earning the CRMP is not an end but a beginning, he adds. “You can’t just put initials behind your name,” he says. “You’ve got to let people know what that really means.” Today, Jones continues to keep in contact with his client base and other sources for referrals in marketing the advantages of reverse mortgages. He provides education and knowledge on an often misunderstood loan program, showing people how the reverse mortgage can assist in planning for their retirement years and as they continue to age. “If you’re within the age range, and you’re going to look at a line of credit, cash-out refinancing or purchasing a home, you should probably at least investigate the reverse mortgage,” he says. “Whether or not they do it, most people should be looking into it to at least have that understanding to see if it would assist them.” Jones’ career in reverse mortgages has given him the ability to work from home and even on his travels. Coming from a U.S. Navy family, he still enjoys visiting the places where his family lived, such as Hawaii. He hopes to visit Italy where his parents were stationed and where he joined the family on several holiday trips. He sometimes travels to Bozeman, MT, to visit a sister, or he will include her and their brother on vacations to Maui or Cabo San Lucas for zip lining, snorkeling, horseback riding or a sunset cruise. The avid sports fan can often be found in his season ticket seats for the San Diego Padres, Los Angeles Chargers, and Aztec basketball and football games at his alma mater, San Diego State University. Then again, he’s also likely to be enjoying a show in the San Diego Civic Theatre Broadway lineup or an outdoor concert in the San Diego Symphony summer series. (He’s looking forward to seeing Earth, Wind & Fire this June). As his career winds down, Jones is easing into parttime work, but he believes he will keep a hand in guiding clients through the reverse mortgage process. He looks back with pride on his NRMLA service, his role in creating the CRMP, and all the clients he has assisted for 30 years. Many, he has found, simply want the relief that comes from no more mortgage payments. “Like a lot of other originators who do this program and have a strong belief in doing what’s right and trying to help people, I believe there’s a lot of satisfaction to that,” he says. “There are so many stories. People need healthcare or home improvements, or they’re living check to check. To be able to make things happen, because they don’t have the mortgage payment anymore, it’s very gratifying.” Across the Kitchen Table continued from page 15 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 16 REVERSE MORTGAGE / MAY–JUNE 2023
Discover the Liberty difference today! BECAUSE EVERY LOAN COUNTS WE GO THE EXTRA MILE 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). © PHH Mortgage Corporation, DBA Liberty Reverse Mortgage, 2000 Midlantic Drive, Suite 410-A, Mt. Laurel, NJ 08054; NMLS ID # 2726 (www.nmlsconsumeraccess.org). For a complete list of licenses, visit www.libertyreverse/licensesnmls. Equal Housing Lender.
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Counseling the Counselors continued on page 22 AS THE COVID-19 pandemic was raging, David Berenbaum left the private sector to become Deputy Assistant Secretary for the U.S. Department of Housing and Urban Development’s (HUD’s) Office of Housing Counseling because he believed that role in government would open a new chapter in his lifetime of public service. “What brought me to HUD was a recognition that the work of the housing counseling community during the 2007–09 financial crisis assisted over 12 million consumers to sustain their housing,” Berenbaum says. “My experience during this period was extremely probative and relevant to the later effort to help people during the pandemic to sustain their housing.” Counseling the Counselors Deputy Assistant Secretary Talks About HECM Counseling Operations By M. Diane McCormick David Berenbaum PHOTO COURTESY OF SHUTTERSTOCK.COM/BOB KORN
Counseling the Counselors continued from page 21 Working families and seniors faced unexpected challenges, including unemployment, financial stress and the risk of foreclosure and eviction—in addition to the public health challenges, he says. “I felt that HUD, in collaboration with public- and private-sector leaders, and of course, the housing counseling and housing finance industries, had a critical role to play,” he adds. In December 2020, Berenbaum joined HUD in the nonpolitical post of deputy assistant secretary in the Office of Housing Counseling, which is part of the Office of Housing. In a career spanning nearly four decades, he had been CEO of the Homeownership Preservation Foundation and held executive-level positions with the National Community Reinvestment Coalition, Equal Rights Center, Fair Housing Council of Greater Washington and Long Island Housing Services. The Office of Housing Counseling oversees a cohort of over 1,550 HUD-approved housing counseling agencies nationwide. Those agencies employ counselors certified and educated to deliver the objective counseling mandated for any consumer seeking a Federal Housing Administration (FHA) mortgage, including a HECM. “My joy has been partnering with the public and private sectors to expand access to sustainable credit, to ensure that individuals and families across the country have a decent, affordable place to call ‘home,’” he says. “Hand in hand with that, I’ve had a lifelong commitment to ensuring that the interests of all consumers are respected, including consumer protection issues, and promoting fair and open housing.” Reverse Mortgage: What is your role at HUD regarding reverse mortgages? David Berenbaum: It’s my responsibility to ensure reverse mortgage counseling services are provided in a manner that is understandable to seniors and is accessible and responsive to the needs of low- and moderate-income and middle-income seniors considering the HECM reverse mortgage product. The Office of Housing Counseling’s program supports the reverse mortgage industry through education and outreach, fraud prevention, ensuring regulatory compliance and quality control by setting standards, housing counseling certification protocols and written guidelines for all counseling agencies and their practices. Further, comprehensive housing counseling grants provide funding for the education and training of HUD-certified HECM-roster counselors. RM: Do reverse mortgages demand this specialized approach because they target older citizens, including the subset who may be in financial distress? DB: As Baby Boomers are aging today, they are carrying the most significant amount of debt into retirement that we have seen in generations. Because of the pandemic and the challenges of the financial crisis, it is important that the reverse mortgage product be available as a financial option for seniors who have equity in their homes but who may have challenges regarding their budget. Frankly, as the [U.S.] continues to recover from the pandemic, I see a growing importance of the HECM product and ensuring the quality of life as seniors age in place. Counseling helps ensure it is the right product for the consumer. Housing counselors serve as trusted advisers and provide accurate, objective information to the senior and the family or guardians. The role of a trusted adviser has been the hallmark of housing counseling. RM: How has your work in fair housing, equity and inclusiveness impacted your oversight of reverse mortgage counseling? DB: The Office of Housing Counseling has been focused on providing training and technical support to all HUDapproved housing counseling agencies to ensure they’re familiar with fair housing law and to foster activities and counseling approaches that foster inclusiveness, cultural sensitivity and linguistically appropriate services. For instance, we updated our agency locator tools last year. They were extremely out of date. But working collaboratively with the HUD Office of Single Family Housing, we now have a system where consumers—including seniors—can find a HUD-approved housing counseling organization, an organization that’s in their community, an organization that provides services telephonically or virtually. They can go to www.hud.gov/findacounselor, and they will find robust information. If they call our 800 22 REVERSE MORTGAGE / MAY–JUNE 2023
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