October 2008

THE

REVERSE review

Trusts, Powers of Attorney and Reverse Mortgages

Heather Moulden
PAGE Imagine this, “you’ve successfully taken a reverse mortgage application, and discovered
that your widowed borrower has a trust with her deceased husband. Now what? Many
20 brokers and loan officers are suprised to learn that borrowers are allowed to remain in their
trusts for reverse mortgage loans.” Learn the right questions to ask and the correct advice
to give your client to protect them through the process.
CONTENTS

12 Spotlight: 20 Trusts, Powers 28 Are You Prepared

Mortgage Bankers of Attorney to Survive Harsh
Association and Reverse Economic Times?
Mortgages Sam Collins
16 Marketing
Heather Moulden
Reverse Mortgage 30 The Good, The
Products to Baby Bad & The Ugly
Boomers 26 7 Secrets for Shannon Hicks
Paul Fiore
Cost-Effective
18 Successful Lead Marketing: 34 Borrowers With
Incubation Step-by-Step Personality
Gretchen Williams Valerie VanBooven David Gutmann

ESSENTIALS
5 Note From the Editor 6 Ask the Underwriter 8 Contributors
10 Industry Snapshot 37 Directory
38 The Last Word: You, of Tender Years, Can’t Know the Fears, Your Elders Grew By

October 2008 3
Successful Companies
Rely On
ReverseVision
Complete integration from origination to
processing, underwriting, closing, and
shipping.
Highly scalable - for small entities to enter-
prises with correspondents and branches.
Sales oriented graphical interface that
integrates directly with Microsoft Word and
Outlook.
Direct export to Celink, RMS, Fannie Mae,
UBS, Goldman Sachs, ReverseDocuments
and others.
ReverseVision Inc.
3310 Pollock Place • Raleigh, NC 27607
www.reversevision.com
(919) 834 0070 • info@reversevision.com
4 reversereview.com
THE
REVERSE review
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Copy Editor Harpreet Makkar
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Printer The Ovid Bell Press
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Rates, specifications, and deadline information available.
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THE
REVERSEreview
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© 2008 The Reverse Review, LLC. All rights reserved. The Reverse Review, LLC is a California limited liability
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 editor’s note

senior clientele for us to educate them and

lead them down the right path throughout
this process. The only way we can educate
them is to be educated ourselves. And in
the end, education creates trust.

As we publish our seventh issue, I want

Gotta stay focused ...
As we head into the last quarter of 2008,
we’re facing the most tumultuous times in our
industry, our nation’s economy, the world’s
economy, and possibly our personal lives.
Coming into this year, I knew it would be bad,
but could never have scripted such a wild ride.
to thank our contributing authors who
have worked with us to help educate the
reverse mortgage industry. I truly feel the
content created by our authors each month is
educational and insightful.
Thank you for educating us and supporting the
reverse mortgage industry.

As we live our lives from day to day, many of

us, including myself, put the blinders on and
do the best to live our lives for what we have
today. While we have many concerns ranging Aman Makkar
from job stability to our investment accounts, Editor
we must do our part and remain focused on
our industry. If you’re thinking about the fears
you have on a day to day basis, think about the
fears our seniors may have with financial losses
during this crisis and rising health care and
energy costs.

After reading the articles submitted to us

this month, my energies were re-focused. I
was reminded that we as an industry are
on a mission. That mission is to do our
best while playing our part in the reverse
mortgage transaction. From lead generation
to servicing, we each play a crucial role when
we target this segment of the market. There
is a dependence and an expectation from our

October 2008 5
ask the underwriter
Ralph Rosynek
| this month’s question |
What is the next
question or “second
question”?
Recently, a Reverse Sales and Marketing class turned into
a very heated debate as I conducted “Loan Originator File
Tips”. As the session went on, there seemed to be a lack of
consensus in response to some of my questions.
My purpose was to assist in avoiding processing and
underwriting issues by encouraging Loan Originators to
become more engaged in the interview process, thereby
providing a more complete file at the time of submission for
processing.
Regardless of the form of application (face-to-face,
mail or telephone), I believe the next question or “second
question” if not asked, in many cases, commences the
Murphy’s Law process of “a poorly originated file results in a
nightmare of a reverse mortgage transaction”.
Case(s) in point:
a. Your appraiser advises the 2 unit building being
appraised is a combination store front and apartment.
By the way, the borrower lives in back of the storefront
on the 1st floor and the 2nd floor is rented – and yes, the
store front is a bar. What question(s) didn’t you ask?
b. Your borrower is vested in a life estate. There are 7
remaindermen children – 1 is in the military serving
abroad and another hasn’t been seen, heard or spoken
to in 9 years, and yes, he was estranged from his spouse
as the borrower recalls. What question(s) didn’t you ask?
6 reversereview.com
As we eagerly wait for the implementation of changes
to our industry and products, ushered in by HERA, it might
be a good thing to sharpen our origination skills. While
there may be some thoughts of a very active holiday season
ahead after a quiet summer, the experienced will certainly
take into account that operations and staffing cut backs in
many areas may affect the ability to mend and repair a large
number of poorly originated/processed files. It won’t be the
first time lack of training and education have combined with
Investor back room issues to delay some of the best efforts
by Originators to provide timely service to their Borrowers.
So let’s play 20 questions!
This is a learning exercise. Your responses to these
questions will be anonymously tabulated and reported in
the next issue of The Reverse Review. Please e-mail your
responses to information@reversereview.com. Please
respond with your answer in the form of a question.
1. Your Borrower indicates they believe the value of their
home is $250,000.00. What should you ask next?
2. When inquiring about property ownership, your
borrower indicates as far as he or she knows, they are
the only one on title. What should you ask next?
3. You have been advised that one of your borrowers will
be represented by an attorney-in-fact. What should you
ask next?
4. You have been advised that the spouse of your borrower
is deceased. What should you ask next? What would be ReverseVision
your “second question”?
5. As you arrive for your appointment at the borrower’s
Makes
home, the property is located in the middle of the block Companies Successful
surrounded by small commercial storefronts and vacant
lots on a busy thoroughfare. What should you ask next?
6. The borrower and his/her daughter (age 47) are both on
title. What should you ask next? If the borrower’s spouse
were 47, would you ask a different question?
7. The borrowers are currently behind on their present
mortgage. What should you ask next?
8. You are on the phone with the pre-qualified borrower
arranging a time, date and location for the application
session. What should you ask next?
9. Your subject property is a condominium. What should
you ask next? Pose the “second question” based upon
your previous question.
10. At application, your inspection of the borrower’s most
recent mortgage statement indicates a preliminary
payoff amount in excess of your pre-qualification
calculation. What should you ask next?
11. The borrower provides you with a 2-inch thick living
trust file. What should you ask next? Pose the second
question as well.
12. At application you discover the subject property has a
well and septic. What should you ask next?
13. Your borrower is unable to find his social security card.
What should you ask next?
14. Your borrower indicates minor repairs are needed. What
should you ask next? Pose the second question also.
15. The trusted advisor for your borrower requests an
application by mail as the borrower conducts their affairs
“slowly”. What should you ask next? ReverseVision puts all the pieces into place.
16. The address identification documents provided by your Successfully used by medium and large
borrower do not reflect the subject property address. lenders, ReverseVision is the most complete
What should you ask next? software in the reverse mortgage industry.
17. The borrower responds they have no mortgage. What
Thanks to the graphical POS, loan officers
should you ask next?
convert more leads. Loans are easily under-
18. The borrower indicates they are seeking a reverse
written with the semi-automatic underwriting
mortgage to purchase a smaller home. What should you engine, closed with MERS-compatible docu-
ask next? Pose the second question also. ments, automatically transferred to Fannie
19. In discussion with the borrower, it is revealed that part Mae, and reported in compliance with HMDA.
of the proceeds will be used for “investments”. What
should you ask next? Companies switching to ReverseVision
20. The borrower advises they have already completed experience an immediate increase
counseling and are seeking an application appointment. in their productivity.
What should you ask next?
ReverseVision Inc.
3310 Pollock Place • Raleigh, NC 27607
www.reversevision.com
(919) 834 0070 • info@reversevision.com

October 2008 7
contributors
Ralph Rosynek Valerie
- Ask the Underwriter, page 6 VanBooven
Ralph Rosynek is President and CEO of 1st Reverse as well - 7 Secrets for
as a HECM DE Underwriter. Mr. Rosynek has been involved Cost-Effective
in mortgage lending for over 30 years with the last 5+ years Marketing: Step-
exclusively providing reverse mortgage lending solutions. by-Step, page 26
To contact Mr. Rosynek or to learn more about 1st Reverse Valerie
Financial Services, Please visit www.1streverse.com or call VanBooven RN BSN is a Senior
877-574-1000. Service Marketing Expert and the
National Marketing Director for
Next Generation Financial Services,
Gretchen Williams John Lunde
a Division of 1st Mariner Bank.
- Successful Lead - Reverse Market
She is a professional speaker and
Incubation, page 18 Snapshot,
the author of the books “Aging
Gretchen Williams is page 10
Answers” (2003) and “The Senior
the Director of Sales John Lunde is
Solution” (2007). She can be
for Reverse Mortgage President and
reached at valerie@nextgenfinser.
Directory and focuses founder of
com. Please visit her website at
on advising industry professionals Reverse Market Insight, the premier
www.MySeniorService.com
on Internet marketing strategy and source for market intelligence and
successful lead incubation. Every analytics services in the reverse
month RMD provides thousands mortgage industry. RMI clients
of guaranteed reverse mortgage include five of the top ten reverse
leads to hundreds of Lenders mortgage originators, both lender
across the United States through and independent servicers, as well Sam Collins
ReverseMortgageAdviser.com. RMD as some of the largest financial - Are You Prepared
also offers consumer access to its services firms in the world. Find out to Survive Harsh
National Lender Directory. more at www.rimnsight.net or call Economic Times?,
949-281-6470. page 28
Sam Collins is the
President of Sam Collins Reverse
Marketing, LLC and Founder of
REMALO, the Reverse Mortgage
Sean Brickford
Association for Loan Officers.
- Successful Lead Incubation, page 18
REMALO is a web based National
Sean Bickford has been in the mortgage industry for the
sales, marketing, training, and full
past 5 years, exclusively working with Reverse Mortgages
service center, created exclusively
for the 4 years. During that time Sean trained a team of
for Reverse Mortgage Loan
loan consultants on lead follow up. As an Executive Account
Officers, Correspondents, Branch
Manager at RMD he is eager to share his knowledge and
Managers, and key executives, and
experience with RMD and its clients.
brokers. www.remalo.org

8 reversereview.com
 Heather Moulden Paul Fiore
- Trusts, Powers of Attorney and Reverse Mortgages, - Marketing
page 20 Reverse Mortgage
Heather Moulden is the National Sales Manager for Products to Baby
Premier Reverse Closings (PRC), one of the reverse Boomers, page 16
mortgage industry’s first dedicated title and settlement Paul joined Senior
companies. PRC has an experienced team of individuals Lending Network,
who have closed more than 100,000 reverse mortgages nationwide, as a program of World Alliance
well as a reverse mortgage specific title and trust/POA review department. Financial Corp., in 2005 and
For more information on Premier Reverse Closings, visit www.PRClosings. currently serves as chief learning
com or call 800-542-4113. officer. Mr. Fiore’s focus is on
educating partners on all aspects
of the reverse mortgage industry
Shannon Hicks and positioning the company as
- The Good, The Bad & The Ugly, page 30 a leading institution for training
Shannon is a reverse mortgage originator David in the industry. He recently held
and VP of Product Development with Gutmann the position as vice president of
Reverse Fortunes, Inc. In the past is Co- sales for Senior Lending Network’s
he has worked with a non-proft CEO and national retail division. Paul Fiore
organization assisting in planned General Counsel earned his bachelor’s degree in
giving and fundraising and as for Customized marketing from New York Institute
an agent in the financial services industry. Lender’s Services, of Technology.
He currently teaches reverse mortgage Inc. (CLS). Mr. Gutmann
seminars for both financial professionals and his partner Laura R.
and borrowers across Northern Ward acquired CLS from Public
California. For more information
Stephen Kinney
Abstract Corp./First American
- You, of Tender
call1.866.592.2096. Title Insurance Company of New
Years, Can’t Know
York in July of 2008. CLS is a multi-state
the Fears, Your
title/settlement services agency, with a
Elders Grew By,
particular expertise in reverse mortgages.
page 38
He was admitted to the practice of law in New
Stephen Kinney is
York State in 1982, and was previously in private
CEO of Stephen Kinney Associates
practice with a mid-sized firm in the Rochester, New
a company that specializes in
York area where he concentrated his practice in real
training and consulting services
property law; both residential and commercial, and has 15
to the reverse mortgage industry.
years of experience with reverse mortgages.
Stephen has 26 years experience
He is a member of the New York State and
in the mortgage industry and an
Monroe County Bar Associations.
expert in reverse mortgages.
David Gutmann
- Borrowers With Personality, page 34

October 2008 9
reverse mortgage industry snapshot
Statistics Provided by Reverse Market Insight - August 2008

Top 10 Rankings by Region

10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates.
Also includes active lenders and growth

Lender Distribution by YTD Growth Rate

Lender distribution graph and table, showing number of lenders growing at various growth rates YTD vs. prior
YTD, including volume attributable to each group of lenders.

Client Notices

1) Help improve data quality in the Reverse Mortgage industry. If you believe your company’s numbers on this report are inaccurate, please email us (support@
rminsight.net) and we will review your feedback promptly. Please include your name, company and contact information along with a thorough description of the
suspected inaccuracy. Thanks!
2) If you received this report as a trial or sample and would like to purchase this report or future reports for your company, please visit: www.rminsight.net/MICreports.
php
3) If you’ve been looking for a source for Reverse Mortgage intelligence beyond MIC endorsement numbers, we’ve got just what you need. Find out more at www.
rminsight.net/rmarket.php

10 reversereview.com
 24 Month Penetration and Unit Volume
12000 1.80%

1.60%

1.40%

Penetration
10000 1.20%

1.00%
Units

0.80%

8000 0.60%

0.40%

0.20%

6000 0.00%
2006-9 2007-1 2007-5 2007-9 2008-1 2008-5

MIC Units Penetration %

2 year trend graph of monthly HECM unit volume and industry penetration against 62+ homeowner households nationally.
Appendix
1) All statistics based on retail originations from HUD’s Monthly HECM MIC reports
2) Loans are in unit volume, based on HUD reported mortgage insurance certificate issuance
3) Lenders are aggregated using HUD’s lender identification numbers and unique lender names, along with feedback from
reporting lenders
HUD Regions and Corresponding States/Territories

Region 1 - New England Region 3 - Mid-Atlantic Region 5 - Midwest Region 7 - Great Plains Region 9 - Pacific/Hawaii
Connecticut Delaware Illinois Iowa Arizona
Maine District of Columbia Indiana Kansas California
Massachusetts Maryland Michigan Missouri Federated States of Micronesia
New Hampshire Pennsylvania Minnesota Nebraska Hawaii
Rhode Island Virginia Ohio Nevada
Vermont West Virginia Wisconsin Region 8 - Rocky Mountain
Colorado Region 10 - Northwest/Alaska
Region 2 - New York/New Jersey Region 4 - Southeast/Caribbean Region 6 - Southwest Montana Alaska
New York Alabama Arkansas North Dakota Idaho
New Jersey Florida Louisiana South Dakota Oregon
Georgia New Mexico Utah Washington
Kentucky Oklahoma Wyoming
Mississippi Texas
North Carolina
Puerto Rico
South Carolina
Tennessee
U.S. Virgin Islands

October 2008 11
MBA
2008 Reverse Mortgage Lending Fall Conference
Miami, Florida
SPOTLIGHT
Interview with
Regina Lowrie and John Courson
This month The Reverse Review had the wonderful
opportunity to attend the MBA’s Reverse Mortgage Lending
Conference in Miami, FL and to sit down with John Courson
and Regina Lowrie. The MBA has recently formed a Reverse
Mortgage Task Force which will be lead by former MBA
Chairwoman Regina Lowrie. In the interview below John and
Regina discuss their goals and aspirations for this task force.
Reverse Review: Talk to us about the Executive Reverse
Mortgage Task Force. What are its goals and objectives?
Regina Lowrie: We’ve put together a pretty comprehensive
agenda of a number of high level issues that are on the
forefront. One is educating the senior, and that’s where
the MBA Home Loan Learning Center comes in, with a
special section for reverse mortgages. [We’ll be] talking to
seniors, helping the understand, so they’re not going into
a 20 minute or 1 hour counseling session totally blank, not
understanding anything about a reverse mortgage, and
unable to really ask any intelligent questions to make a good
decision.
Second, we’re working on developing a best practices
and code of ethics for our loan originators and along
with that, MBA is putting together a reverse loan officer
accreditation program that we will be able to offer by
the end of the year. This will really help instill these
best practices in the origination process. Therefore
our members that are looking at this as a new business
opportunity can do it right and look out for the best interest
of the senior.
12 reversereview.com
John Courson: With this task force, we will also have a focus
on servicing. We need to get a subset of servicers, because
they have a different set of issues than counseling, appraisals
and so on. We can be a forum for them to get together
because certainly as this product grows, the servicing is
going to get more and more of a spotlight on it.
RR: Talk to us about the environment in today’s
marketplace. What does the future hold for us?
JC: We’ve really got an opportunity. We’ve got a chance,
as my grand kids say, to have some “do-overs”. There is
an opportunity now to really look at the basic tenets and
structure of the business. The question is, is the industry
ready. Are they bold enough to take those actions that
we need to take to bring in the accountability, bring in the
transparency, and to really align the interest of borrowers
with the interest of our for profit members. That’s going to
be one of my tasks in leading us through this opportunity
and seizing the environment; to take that blank sheet of
paper to re-write and restructure some of the basic tenets of
our business.
RL: Amidst this crisis, I’m still very very bullish on the
housing industry. Housing drives this economy. We have
a growing housing demand, both in tenant and owner
occupied properties. Once the credit markets settle, there
are going to be huge opportunities for the housing markets
to bounce back with resilience because housing has become
more affordable now.
RR: How do we educate people in the industry and outside
of the industry?
RL: That’s actually one of the major missions of this
executive task force. We want to raise awareness
within MBA of the need to improve our marketing and
communications, whether it’s through press releases,
conferences, the MBA Home Loan Learning Center; we
see that as a part of our mission. One of the things we’ve
discussed is putting together a marketing piece to dispel
the myths of the reverse mortgage industry. When we
think about the growth in this industry, and some of the
tremendous work that’s been done by NRMLA and others in
this industry, we still have such a long way to go.
RR: How do you see the MBA’s role with NRMLA in the
reverse mortgage industry:
JC: We see it as complimentary. Frankly, they’ve done a
very good job. Obviously, they’ve done a yeoman’s duty in
working with the people that are out there originating loans.
Peter Bell and I have known each other for 20 years. They’ve
done a very good job of that. In our case, the task force is
there to work with the CEOs and the people who are running
the enterprises. We have corporate members at the senior
executive level and they’re looking for us to play this role.
So, I think it’s absolutely a perfect compliment. Between the
two, we’re all working for the same goal. The companies
that belong to NRMLA are also members of the MBA. So, I
think our members are looking for value on both sides of the
equation.
RL: As things come up in Washington, on the hill, if NRMLA
and the MBA can walk up on the hill together, in lockstep,
how powerful will that be for the industry? So, John is right.
It is a compliment to what NRMLA does we’re looking for
ways in which we can work together in the industry.
October 2008
about John Courson & Regina Lowrie...
John Courson is COO of the Mortgage Bankers
Association (MBA) and will become the Association’s
President on January 1, 2009. Courson has been involved
in the mortgage industry for more than 40 years and
served as Chairman of MBA in 2003. From 2004 to 2008,
Courson served as Chairman of the Board of Directors of the
California Housing Finance Agency, a position for which he
was appointed by Governor Arnold Schwarzenegger.
Regina Lowrie is President and CEO of Vision Mortgage
Capital, LLC, Operating Subsidiary of American Home Bank
N.A. Vision Mortgage Capital was formed by Regina Lowrie
in June 2007 to be a premier mortgage banker dedicated
to meeting the emerging housing needs of – first time
homebuyers, move-up buyers, immigrants, senior citizens
and existing homeowners – “housing the future.”
Lowrie is also President & CEO of RML Investments Inc. –
a company that currently serves the real estate financial
services industry in many capacities to include consultative
services to mortgage bankers and an advocate for fighting
mortgage fraud. She is also former chairwoman of the
national Mortgage Bankers Association (MBA). The MBA
is the only national organization dedicated to meeting the
professional needs and interests of companies who have a
vested interest in the mortgage industry.
13
Marketing Reverse Mortgage Products
to Baby Boomers
Paul Fiore

In January 2008, the first of the baby boomer generation turned 62 years old and since that
time, per the US Census, more than 6,500 people continue to turn 62 each day. This represents
a tremendous opportunity for the reverse mortgage market. The baby boomer generation is a
new and unique customer and they have the potential to help make reverse mortgages even more
popular and mainstream than they are in the current environment.
However, before you approach this group, there are
some distinct differences between baby boomers and the
traditional reverse mortgage customers, those of the WWII
generation. To be successful, everyone involved in the
reverse mortgage industry must learn what the differences
between these two generations are and how to market to
each segment.
The Traditional Reverse Mortgage Market
For as long as we have been selling reverse
mortgages, we have focused on the traditional senior
marketplace. Seniors from this generation have slowly
begun to understand and embrace the concept of a
reverse mortgage. Specialists in reverse mortgages have
worked hard to overcome many of the concerns and
misconceptions these clients have about this type of loan.
Quite often, this generation is classified as being house
rich, but cash poor. Many of these clients bought their
homes years ago, witnessed a significant appreciation
in value and paid off any liens or mortgages. They
remember hard times and how important it was for
them to pay off their home and own it free and clear.
This generation is not prone to making many major
financial decisions with regard to their home and
since most do not have a mortgage on their house,
they may be hesitant to take a reverse mortgage
and create new debt. The concept of “managing
debt” is not something that these seniors are
familiar with and quite often they have
many fears and concerns regarding
reverse mortgages. This client base
generally wants to leave their home to
their children as a form of inheritance
since this is typically their biggest asset.

16 reversereview.com
 Unfortunately, many seniors from this generation are
facing major financial struggles such as affordable healthcare
and rising energy costs. They often rely on social security
income to fund their lifestyle and with the cost of living
continuing to rise year after year, even though they don’t
have a mortgage payment, they struggle to make ends meet.
When approaching seniors who fit this profile, it is very
important to discuss their fears and concerns openly and
illustrate how a reverse mortgage can potentially change
their life. Many times, the senior will look to their children
or a caregiver for advice with regard to a reverse mortgage or
any other financial opportunity. Education and relationship
building serve as the best tools for approaching this type of
senior and their caregivers. They need a trusting relationship
and thorough understanding of the product in order to make
a final decision.
Baby Boomers Require a Different Approach
The boomer generation has a completely different
mindset from the more traditional senior and ultimately a
different set of objectives. Before you approach boomers,
you need to understand their motivation. A more traditional
client may be house rich and cash poor, however, the
boomer generation is much more inclined to carry and
manage debt through the years.
Members of this generation typically have refinanced
their home at least once and have taken advantage of how
the housing market has appreciated over the years. Their
plan is centered on taking advantage of financial opportunity
as it presents itself. They reinvested money back into their
homes, allowing the home to grow and appreciate in value.
Typically, they paid off credit card debt by refinancing their
home and are accustomed to a certain level of debt.
Overall, baby boomers are much more comfortable
with the idea of taking a reverse mortgage. In fact, many
in this generation have embraced the concept because
they understand that they can use it to pay off their
existing mortgage, allowing them to lift a huge financial
burden in their retirement years. This client is more apt
to look at a reverse mortgage as a financial tool that
maximizes their ability to lower overall monthly expenses.
Another distinction with this generation is that they have
fewer concerns about using their house as the source of
inheritance for the family.
Many baby boomers have set up a retirement plan
and are now looking at ways to keep their home and avoid
dipping into their retirement funds. They approach the
reverse mortgage like they do everything else – they shop
for what they consider to be the best proposal. They do
October 2008
their homework and when they reach the reverse mortgage
specialist they often understand many of the nuances of
the product and are closer to making a decision than a
traditional client.
The most common obstacles in selling to this
generation is competition. When dealing with baby
boomers, reverse mortgage specialists will find themselves
in a very competitive market and will need to distinguish
themselves. Although this client is an educated consumer,
it is important to remember that building a relationship
with them and understanding what motivates them to seek
a reverse mortgage is key to getting the business. Each
reverse mortgage specialist must take the time to learn the
customer’s financial plan and how a reverse mortgage fits
into the scenario.
How a reverse mortgage will change their life is as
important as how much money they qualify for. Loan officers
who are adept at illustrating the lifestyle benefits to their
customers will exponentially increase their business. While
this is still a relationship-driven sale, it is one that tends to
occur more quickly because so much of the research is done
by the client before they ever contact the lender.
One point to remember, these clients are going to
research all their options and a reverse mortgage may just
be one of the choices. It is up to the reverse mortgage
specialist to work with them to see if a reverse mortgage
is, in fact, the best option. How can you quickly identify if
the product is right for your customer? Jot down at least
five ways a reverse mortgage will impact the customer’s
situation in a positive way. If you are unable to make this
list, you may have a challenge in convincing your client that
this is the right choice for them. And, truthfully, that’s okay.
You will be a much more respected sales person if you are
honest and treat your clients in an ethical manner. If you
were unable to help them but treated them with respect,
they will remember you and refer you to others. Conversely,
if you are able to come up with at least five benefits for your
client, make sure you point each one of them out clearly and
concisely.
In the End, It’s a Matter of Trust
While understanding these generational differences
will put you one step ahead when you first speak with a
customer, the one consistent factor in working with all
seniors is building relationships. The primary goal is to assist
your clients in make the best decision for their particular
situation. By demonstrating that you are working in your
client’s best interest you will embark on a clear path to
success.
17
Commentary by Reverse Mortgage Adviser

Successful Lead Incubation

Gretchen Williams

As the Boomer Generation enters their golden years

there will continue to be an influx in seniors using the
Internet, especially for research and educational purposes.
For many of those in the industry, the idea of marketing
online is still very new and turning those online inquiries
into closed loans is a whole other story. We have recently
welcomed a new member, Sean Bickford, to our team. Sean
comes to us with an extensive background in the Reverse
Mortgage industry. While originating loans, Sean and his
team spent much of their time working Internet leads. In
this article we will be interviewing Sean in order to share his
expertise on successful lead incubation.
lead sources while generating business for yourself and your
Life as a Loan Consultant - The Last 4 Years team?

Since entering the industry 4 years ago Sean has had a
wide range of experience in different aspects of consulting
and originating Reverse Mortgage loans. Sean has worked
for different sized lenders from the small, mid-sized to the
large corporate lender, and utilized almost every marketing
channel available. During these 4 years Sean experienced
failures and successes, while gaining a wealth of knowledge.
It is this first-hand insight and knowledge of the Reverse
Mortgage industry that allows Sean, as an Account Manager
with Reverse Mortgage Adviser, to assist other loan
consultations to more efficiently and successfully grow their
business and close more loans.
When Sean first entered the industry, he conducted all of
his business through face-to-face consultations. In addition,
he has also managed a team of loan consultants who were
focusing on marketing to borrowers via direct mail, TV ads,
print, radio, Internet leads and cold calling. Sean extensively
trained his team on different selling techniques using phone,
mail and face-to-face presentations. By the end, Sean was
working out of a large call center and began conducting all
of his business through the mail and over the phone, all
the while working with borrowers located throughout the
country.
The Interview
RMA: What was the biggest obstacle you encountered
having utilized so many different marketing channels and
Sean: It became really apparent early on that we could
not treat all borrowers the same. The first step was to
understand the origination of the lead and adjust the
approach from there. The conversation was very different
when speaking with a borrower generated by telemarketing
efforts, versus those generated reactively to a borrower’s
inquiry. The introduction was key, and even more so when
leaving messages. In addition to letting the borrower know
who you are and why you are calling, it is equally important
to disclose how you received their information.
RMA: What did you find was the biggest difference between
those leads where the borrower had been solicited (i.e.
direct mail, telemarketing, etc) versus those where the
borrower had initiated the request?
Sean: There tended to be a great deal more clarity when
speaking to borrowers who had initiated the request. Making
your affiliation with the lead source known from the onset
helped give you credibility from the first call. Having that
immediate trust with the client allows them to open up more
easily, and allows you to uncover their motivation more
quickly. In the end, I found that the Internet leads were the
most successful because they provided us with a great deal
of quality and consistency. More importantly, we realized
one of the highest closing ratios with Internet leads when
compared to all other lead sources we utilized. By the end,
we had moved to a purely online lead model.

18 reversereview.com
RMA: What suggestions do you have as it relates to
appointments?
Sean: There were 3 different things that I always tried to do.
First, be specific when setting follow up appointments and
avoid using open-ended questions. Instead make statements
like, “I am going to call next Friday at noon to give you
time to think about what we talked about and answer any
questions you may have”. It is always best to make them
tell you if a specific time doesn’t work for them, rather that
asking a question that they can simply reply yes or no to.
Second, when possible, include family or other third
party decision makers. This applies to any meeting you have
with a borrower, whether it be face-to-face or over the
phone. You do not know what kind of information they may
be getting from friends or family who may be misinformed.
Having as many people involved with you and your client
during the presentation of the program will help dispel any
misconceptions and will help you turn their focus to the
loan’s benefits.
And lastly, focus on goals. Borrowers can easily get side-
tracked, particularly by fees; to overcome this it is important
to maintain a strong focus on the borrower’s goals.
Determine your client’s need/motivation and constantly
remind them of the monthly savings they would receive by
eliminating their mortgage payments. Help them establish
a personal connection, by asking them: “How will this loan
affect your daily life? What would change? How will you
spend the money?”
RMA: Do you have any suggestions for those who may
be having a difficult time making contact with potential
borrowers?
Sean: I would first try to use a different phone number. For
instance, if you typically call from a landline try using your
cell phone. This will help you overcome issues where your
number may come up as “unlisted” on caller id. Also try to
call at different times of the day. This is especially important
in instances where a request is made by a third party (on
behalf of the senior). Often times an adult child researching
the program for their parents will provide a home number
but they are at work the majority of the day. Try calling
after work hours if need be. Sending emails with varying
subject lines or topics may also help spark interest and get a
response.
RMA: What processes did you have in place for continued
follow up? How long was that follow up schedule?
October 2008
Sean: The ability to send my clients marketing materials such
as information packets gave me a great opportunity to, not
only, follow up but to go over the information with them in
detail once they received it. Sending your client something
tangible they can keep for their records will show that you
take the time and effort to make sure your clients are well
informed.
I categorized each of my clients into lifecycles of 30, 60
or 90 plus days. The lifecycle of each client was determined
by their unique situation and need. Having access to a Client
Relationship Management (CRM) tool will help increase
your ability to properly follow up with each lead. Use these
lifecycles to customize your CRM tool to set automatic
reminders for periodic phone calls, emails and/or letters
ensuring you remain in contact with your leads over a longer
period of time. If you do not have access to such a tool you
need to at least develop a system to track your follow up and
results.
I approached follow up with my clients as an opportunity
to provide them with as much relevant information as
possible on a consistent basis. This helps ensure they do
not seek out the information elsewhere and disseminating
it over time helps prevent overwhelming the client. I also
found that interest rate changes were always a good reason
to regularly contact my clients. I would let them know that I
would be calling each week to update them on rate changes.
Since higher interest rates decrease the monies a borrower
qualifies for I would also use these calls to create a sense
of urgency for those clients qualifying for just enough to
pay off their mortgage balance. This allowed me to help
more of my clients (particularly those with the most need)
while avoiding situations where they would lose the loan
they so desperately needed. You can leverage the “Principal
Limit Lock Disclosure” in much the same way since signing
the application will allow the borrower to lock in the loan
amount (based on the expected rate as of that day).
RMA: To what do you attribute most of your success?
Sean: Regardless of the type of lead I was working,
persistence and follow up strategy were by far the most
important factors. A successful follow up strategy requires
organization, in which case my CRM tool was my saving
grace.
Gretchen Williams
Reverse Mortgage Adviser
(888) 407 - 6365
reversemortgageadviser.com
19
 trusts, powers of attorney
and reverse mortgages
Heather Moulden

Congratulations! You’ve successfully

taken a reverse mortgage application, and
discovered that your widowed borrower
has a trust with her deceased husband.
Now what? Sneaking suspicion tells me
that it all gets a bit blurry from here.

Many brokers and loan officers are surprised to

learn that borrowers are allowed to remain in their
trusts for reverse mortgage loans. While the Federal
Housing and Urban Development Department
(HUD) has guidelines to follow, most reverse
mortgage lenders vary slightly in interpretation and
implementation of these requirements. Some call for
attorney opinion letters, while others allow for your
title company to review and approve trusts.

20 reversereview.com
 Often, brokers and loan officers aren’t even aware
that title companies will review trusts to meet reverse
mortgage lender, HUD and state guidelines. In most of the
“forward” world, keeping borrowers in a trust isn’t even a
consideration, but in the reverse world, it’s a philosophical
must.
What most reverse mortgage lenders and brokers are
trying to avoid, is seniors unknowingly complicating their
reverse mortgage situation due to ill advice. At the advice
of their mortgage broker, the Smith couple took their
property out of a trust, and after the close of the reverse
mortgage, they recorded a deed back into the trust. Their
broker assumed that there wouldn’t be any repercussions
since it was a common practice in the forward world. But,
unfortunately for the Smith couple and their mortgage
broker, a reverse mortgage is very different from a forward
mortgage. This couple ended up losing their Medicaid
Last, familiarize yourself with your lender requirements.
Do they allow trusts? If they do, what’s their review
process? Do they allow for Powers of Attorney? How long
does title have to be seasoned?
What could have been an easy solution for the Smith
couple, turned into a complicated situation, with no way
of changing their condition. However, to help others avoid
the same conundrum; most reverse mortgage lenders
have implemented programs to provide an alternative for
borrowers with trusts.
Some lenders require attorney opinion letters for their
trust reviews, however many attorneys charge upwards
of $150 an hour. Other reverse mortgage lenders have
implemented a system, which allows title companies to
review trusts, powers of attorney and conservatorships as a
part of their closing services. Since most reverse mortgages

“
benefits, and the Smiths were devastated. This is why it’s are still needs-based loans, this provides a huge advantage
always important to consult for your borrowers who are
all appropriate parties when watching how they spend
you are changing title. At the advice of their mortgage broker, the every dollar. In today’s
Another scenario is
Smith couple took their property out of a trust, competitive marketplace
and after the close of the reverse mortgage, for loan applications,
senior homeowners who
this may also provide a

”
are in a rush to close their they recorded a deed back into the trust... probable advantage for
reverse mortgage and don’t This couple ended up losing their Medicaid the loan officer taking the
realize their property isn’t
held in a trust, yet want benefits, and the Smiths were devastated. application.
to have a trust recorded However, not all
on their property. After they close their reverse loan, the title/settlement companies are created equal. They vary
borrowers can have a trust prepared that meets lender greatly in their interpretation of how to review trusts. It’s
guidelines, and request permission from the lender to have important to pick a provider who is familiar with reverse
the property placed into the trust by recording a deed at the mortgage guidelines – not just title guidelines. Since a trust
County Recorder’s office. If the senior borrowers were to is not breathing, nor is it filling out the application for a
place the property back into a trust without lender approval, reverse mortgage, it must meet certain guidelines in order
there is a chance that the trust could change the terms of to qualify for a reverse mortgage. Lenders require different
the loan and therefore trigger a maturity event. guidelines be met for revocable, irrevocable and A/B trusts,
and they should be familiar with each of these.
These types of scenarios can simply be avoided by
following these relatively easy steps. First and foremost, If you are unsure of their knowledge on the subject,
learn the differences between a conventional loan and a ask questions. For example: How many reverse mortgage
reverse mortgage. There are fundamental principles that trust reviews have you completed? What are some of the
vary with a reverse mortgage, and it’s truly a key to success expectations I should set for my borrowers? Who performs
in this industry. your trust reviews? Does your trust review form indicate
if the trust conforms to HUD guidelines? Does your trust
Second, pick providers who are familiar with reverse
review form indicate what problems, if any, need to be
mortgages. There are appraisers, title companies, notaries
addressed and what needs to be done?
or closers available nationwide, with experience in working
with reverse mortgages. Those who are committed to the The trust reviewers should know the differences between
industry are trained to watch for fraudulent documents and a review for a forward mortgage and a review for a reverse
signs of elder abuse. Your lenders typically have preferred mortgage. For a forward mortgage, the title officer checks
provider lists available – ask them. to see that the trustee of the trust is the current trustee of
public record and that the trustee has the power to borrow.
»
October 2008 21
For a reverse mortgage, title must check these things as
well as, check to see that the borrower is the immediate
beneficiary and make sure the trust is revocable.
How does the process begin? If you do choose to work
with a title company, the most important thing to do is
obtain a full, signed and dated copy (not the original) of the
trust. While in some states trust certifications are accepted,
they must still outline all pertinent specifications to meet
the parameters of HUD and/or private investors. Most trust
certifications fall short of this expectation, so it’s better to
educate your borrowers early on as to why you’ll need a full
copy of their trust. Remember, nobody needs to know who
gets the grand piano or the china set when mom goes, so
please don’t send the will.
Once you have a copy of the trust, submit it to your
title/settlement provider to review right away. Most title
companies who are truly familiar with reverse mortgages
should have a trust review department specifically versed in
how to read pertinent supporting documentation.
As soon as the title commitment/preliminary title report
is completed, the trust is now ready for review. The trust
must match the vesting on the preliminary title report/title
commitment, and if this varies, your settlement agent will
let you know as soon as possible. Examples of variances:
Sometimes trustees may match, but
a different date is reflected in the
vesting, or there may be only half
of a trust provided.
The review process itself
will vary for different lenders.
Some lenders want to know
if the borrowers are lifetime
beneficiaries, while others just
want to make sure the borrowers
are the immediate beneficiaries.
Most lenders want the trust to be
notarized, while title guidelines
only require the trust to be signed.
Make sure your title company
is adhering to your lender’s
guidelines; otherwise the review
process could be delayed.
Once the trust has been
reviewed, your title/settlement
provider will let you know that
the review process is complete
and whether the trust has been
approved or needs further
evaluation by an attorney.
22 reversereview.com
revocable trusts
Revocable living trusts are what HUD requires for reverse
mortgages. Most should meet HUD guidelines and qualify
for a reverse mortgage, but there are always exceptions to
the rule. Submit the trust to your lender and title company
right away so they can confirm if the trust meets HUD’s
requirements.
irrevocable trusts
Irrevocable trusts, unfortunately, cannot and will not
meet guidelines for any reverse mortgage at this time. If the
borrower is currently in an irrevocable trust, and if all parties
are still alive and well, they must “bust the trust” in order
to obtain a reverse mortgage. If one party has passed away,
unfortunately they will not meet qualifications for a reverse
mortgage and must search for other options available.
a/b trusts
Even if a title company assesses your trusts, there may
be occasions that call for further review. Remember, this is
a measure to try to save your borrowers’ money up front.
Sometimes the borrowers still face the inevitable prospect of
spending money for an attorney review.
If an application is taken from a borrower who has a
spouse that passed away, and they
were in a trust together, more
than likely the borrower will be in
what’s known as an A/B trust or a
“spillover trust.” This means that
upon one person’s death, a portion
of the trust becomes irrevocable
and may no longer qualify for a
Home Equity Conversion Mortgage
(HECM). If that’s the case, there
are still measures the borrower can
take to meet HUD’s guidelines for a
reverse mortgage. It just may take
some extra work.
The A/B trust split is a way
of avoiding federal estate taxes. If
the estate does not reach a certain
threshold level (in terms of the how
much the estate was worth) at the
time of the passing, the majority of
trusts do not split. The threshold
level changes every couple of
years. Most title companies don’t
have the capabilities (at least not
currently) to determine the size
of the estate at the time of the passing of the spouse. Title
relies on the attorney to review the estate at the time of the
passing to see if it hit the threshold level of splitting into an A
Trust (usually revocable) and a B Trust (usually irrevocable).
Loans with trusts in certain regions may be more apt to
split into A/B trusts (think Manhattan or Beverly Hills). If it
doesn’t reach the threshold level, then many trusts remain
completely revocable.
Once it’s been determined that the borrower is in an
A/B trust, the trustee must have the power to encumber
the property. The attorney review will help determine if the
estate had sufficient assets to split.
powers of attorney
Reviewing trusts may be complicated, but what if you
have a borrower who is competent, yet can’t sign the
loan paperwork? What if your potential borrower has a
degenerating health condition like Alzheimer’s? Is your deal
dead on arrival? Thankfully, no.
Recently a reverse mortgage loan officer in California
met with Mrs. Smith, whose husband was diagnosed
with Alzheimer’s. Fortunately, before Mr. Smith was
diagnosed with the disease, he executed a financial power
of attorney that Mrs. Smith could use in case something
was to happen to him. As the years went on, Mr. Smith’s
October 2008
condition worsened, and Mrs. Smith was overwhelmed with
mortgage payments and medical bills. Just as the problem
became insurmountable, she happened to hear about
reverse mortgages and turned to the Internet for further
guidance. Luckily, Mrs. Smith was able to obtain a reverse
mortgage, while keeping Mr. Smith and herself on title. They
were fortunate to be able to find the reverse mortgage as a
solution, allowing them freedom from mortgage payments,
and the ability to pay for Mr. Smith’s healthcare.
Most everyone who is successful in the reverse mortgage
industry has the borrowers’ best interest in mind when
helping them look at all accessible options available.
However, both HUD and lenders are keenly aware of fraud
that exists, and have therefore deemed some rules necessary
for borrowers using a power of attorney. According to a
study done by the National Center on Elder Abuse, 60.4
percent of all perpetrators of financial abuse are adult
children, including powers of attorney and trustees of trusts.
It’s very important to pay close attention to your borrowers’
needs and individual situations if they are indeed using a
power of attorney or trust.
The type of power of attorney that should be used for
a reverse mortgage is a financial power of attorney – not a
»
medical one. A power of attorney is a document that gives
one person legal authority to perform certain acts and/or
23
make certain decisions for another. The person granting the
authority is called the Principal; the person acquiring the
authority is called the Attorney in Fact or Agent. To be used
for a reverse mortgage, an Attorney in Fact needs to have
the power to borrow money, encumber real property and
execute contracts, etc. Unless the POA specifically allows
it, an Attorney in Fact cannot use the POA for self-serving
purposes (example: a wife may not deed her husband off
title so she can obtain a reverse mortgage in her name only).
There are many types of powers of attorney, but the most
common one used for a reverse mortgage is a durable power
of attorney, which means the document takes effect upon
delivery and survives the incompetence of the Principal.
This type of document also becomes void upon death of the
Principal.
Another common type of power of attorney used for
reverse mortgages is a springing power of attorney. This
document takes effect only upon the incompetence of the
principal.
Either of these types of powers of attorney is suitable,
provided they meet lender and title guidelines. This is
another instance in which title companies familiar with
reverse mortgages will come in handy.
24 reversereview.com
If you know that a power of attorney will be utilized for
the purposes of the reverse mortgage, obtain a copy of the
power of attorney and submit it to both your lender and title
company for review. The title company should know how
to review the power of attorney for both title and lender
purposes. Guidelines will vary depending on if the borrower
is using the power of attorney by itself or in conjunction with
a trust.
Sample requirements:
If the borrower is using the power of attorney by itself:
„ If competent, the borrower must sign the up front
documentation and attend counseling.
„ The borrower must sign an affidavit stating they know
the power of attorney is being used to obtain a reverse
mortgage.
If the borrower is using the power of attorney in conjunction
with a trust:
„ The power of attorney will sign on behalf of the borrower
as an individual.
„ If a borrower is incompetent, the trust and power of
attorney will determine how many doctor’s letters are
needed. For example: if the trust calls for two letters,
but the power of attorney calls for one, title will need to
see two letters.
conservatorships
Contrary to Mrs. Smith’s story, some borrowers
desperately need the money, but are sorely lacking proper
documentation to ascertain a reverse mortgage. Recently
there was an Attorney in Fact who signed loan documents,
but could not provide the original POA at closing, which was
required. The borrower was suffering from Alzheimer’s and
could not re-execute a new power of attorney for recording
purposes. Her doctor’s letter implied that she was not
mentally stable. In this case the power of attorney was
rendered useless, and the person acting as Attorney in Fact
had to proceed with obtaining a court’s approval authorizing
her to act on the borrower’s behalf. This process is known as
a conservatorship.
A conservatorship is a legal proceeding in probate court
wherein a petition has been filed, and granted, requesting
oversight of the affairs of someone who is or has become
incapable of handling his or her own affairs, including
financial matters. The court appoints a conservator to make
certain decisions or perform certain acts on behalf of the
conservatee.
Setting timeframe expectations with borrowers
is the best business practice you can implement if a
conservatorship must be obtained for use in a transaction.
Some conservatorships can take upwards of six months to be
realized – sometimes longer.
If you are choosing to see your borrower through
the process of obtaining a reverse mortgage with a
conservatorship, please submit all documentation to title for
review as soon as possible. They will review all appropriate
court documentation to make sure guidelines have been
met, including the court approval for the reverse mortgage
itself.
Essentially what title and lenders will want to see are the
Permanent Letters of Conservatorship, and a court order
authorizing the reverse mortgage. (Note: terms may vary
from state to state.)
our industry’s reality
In today’s reality of a declining market, trusts,
conservatorships and power of attorney documents, in
addition to financial complications, are all too familiar within
the reverse mortgage industry. That’s why selecting partners
familiar with the reverse mortgage process will help make
you successful.
To further complicate our industry, there is a surge of
new reverse mortgage brokers just as the volume of reverse
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October 2008
mortgage loans is on the decline. In order to remain a
strong player in the reverse mortgage game, it’s important to
educate yourself continually on the needs and expectations
of the seniors in your target community, as well as back-end
guidelines that will help get your loans closed quickly.
Mark Twain once said, “Always do right – this will gratify
some, and astonish the rest.” While it might sound altruistic
in nature, this quote is indicative of our industry. There are
very few people who are in the reverse mortgage industry
who aren’t looking out for the senior demographics’ best
interest.
Those companies who are in this industry for the right
reasons will be successful over the long term. Given the
current situations with the sub-prime mortgage meltdown,
there are few companies who are without change in recent
months. Products were revoked, pricing has changed
multiple times and companies were swallowed whole – all
because of circumstances bigger than any few groups of
individuals. Any company who can weather this kind of
storm and still focus on seniors’ needs will continue to thrive,
even if we are in a declining market.
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25
 7 Secrets for Cost-Effective
Marketing: Step-by-Step
I’m divulging all of my secrets for this issue
of The Reverse Review on lead acquisition!
Aren’t we all looking for the MOST cost effective
marketing strategies? Wouldn’t it be great if the postcard
mailers really pulled the numbers they used to? Everywhere I
turn, Reverse Mortgage originators, and frankly anyone who
serves the senior market, are looking for the magic bullet
that improves their lead conversion. Is it seminars? More
postcards? Newspaper ads? Online marketing? Who should
you listen to, and where should you begin? There are lots of
questions.
Here are some real answers.
I would say that 90% of Reverse Mortgage originators
would do a lot more business if they would take the time to
understand the dynamics of successful internet marketing.
I know that very few of you are internet gurus, and very
few of you have the time to learn a completely new skill.
However, just a few tweaks of your website, and a few hours
spent each month reaching out to consumers on the internet
will TURN those LEADS into CLIENTS.
There is no magic bullet. If you aren’t interested in
spending a lot of marketing money these days (and who
is?) then you will need to spend a little time and focus on
education.
26 reversereview.com
Valerie Vanbooven
If my income was based on commissions only, then
here is what I would have in my arsenal of marketing tools
without question:
1 A short (professional, not goofy) video on Reverse
Mortgages customized with my name, picture, logo,
phone, website etc at the end.
2
I would have that video in a DVD format (for handing
out to seniors and their family members) and in a
MPEG or WMV file for posting on the internet.
a. Side note on the video: If you don’t sound
professional, please let someone else do the video
for you, do not do voiceover work if you don’t know
what that means. Want a good example? Go to www.
youtube.com and type in Reverse Mortgages. Look
at some of the WORST videos ever created on the
subject. Get a good laugh and while you are there,
take note of the really well done videos. Learn from
those who have done a professional job.
b. Once I have my video put together, I would post it
on every video website on the internet using a title
 like this: “Reverse Mortgages for Seniors in St. Louis,
Missouri” The reason I added my location is because
when an individual surfing the web does a search for
“Reverse Mortgages St. Louis, MO”, my video is likely
to come up first in their search results. Make sense?
I don’t care to serve the entire country, I just want
clients in St. Louis, MO. This is called using long-tail key
words.
money. I’m talking black and white, 2-sided, fun,
interesting factoid kind of newsletter. Something that
makes people smile. Don’t put long boring articles
about Reverse Mortgages in EVERY issue. Keep it
simple. Just a small reminder that you cared enough
to say hello is all it takes for a senior and their family
to respect and acknowledge that you are a kind and
thoughtful professional. When they decide to move
forward with the Reverse Mortgage process, you will be

3 A 30 minute recorded “radio show” on CD, again,

professionally done, great host, great voiceover, great
interview. This builds credibility and trust instantly with
seniors and adult children of aging parents. Have it on
top on their list (and on their coffee table) for that first
phone call.

In a nutshell, those are the 7 steps to dominating your

your website for download and on CD for distribution local market. All of the suggestions are affordable, easy to
to prospects and referrals. duplicate, and cost more of your time than your money. If
you are sitting around without appointments, get busy and

4 My Articles: I would write at least 5 articles or more
(350 words each) on Reverse Mortgages. Think of the
top frequently asked questions, and write an article
on each. Submit those articles to every service on the
internet that accepts free article submissions.
learn the secrets that successful marketers already know:
education, content, trust, credibility- show the consumers in
your local area that doing business with you is a no-brainer.
Can’t do it all yourself and need help? Reach out to those of
us who do this all day long. We are always glad to point you
in the right direction.

5 My Website: I would certainly look into a website

makeover. Eliminate the clutter. Eliminate the 5000
options for people to click on. Focus on ONE thing:
getting the lead’s information. Don’t give away good HUD Foundation Specialists
stuff until the person visiting your website gives
YOU their name and email address. If you have an
unprofessional looking website, or if you have dozens
of information options on your website, it’s time to
redesign it, make it simple, effective and compelling. M
Manufactured
actured Hou
Housing
sing
Make people WANT to give you their information. Use Troubleshooters
Trouble
great headlines, great titles, and great content.

6 My FREE OFFER: Every ad, every website, every

presentation, everything I hand out would have a free
offer attached. That could mean a free e-book, or a
free DVD, free radio show CD, free booklet, free report,
FFoundation
Inspections, Upgrades
& Repairs
free vial of life, free discount prescription drug card,
free something. NOT a FREE CONSULTATION. The free EEngineer
consultation is over-used, and completely ineffective. Certificatio
C ons
Everyone offers a free consultation. Take those words
out of your vocabulary and off of your ads. It’s a given.
Think of something tangible and compelling that
will educate your prospect and make them believe
they would be absolutely CRAZY to do business with
anyone else but you.

7 My monthly newsletter: Every month without fail, a

newsletter should go out to your prospects, clients,
past clients, and referral sources. I’m not talking about
a 4-color slick expensive newsletter, don’t waste your

October 2008 27
 Are You Prepared to Survive Harsh Economic
Times?
Sam Collins
The U.S. being the world’s greatest superpower is showing signs of weakness at home
and abroad. Excesses in spending, conducting a war on two fronts, rapid growth in stock
equity, unsurpassed home equity growth, a weakened dollar, dependence on social
programs, entitlements, a greedy Wall Street, consumer spending out of control, and an
aging population are all contributing to harsh economic times. Are you prepared to survive
the inevitable?

If you are not careful you might think Armageddon is
around the corner. However, do not fret, as the American
spirit is still alive and well. I have confidence that our
economy will pull together. Yet, there are many who will not
survive the challenges that confront us. Harsh times call for
emphatic direct action. Sitting back and doing nothing will
surely lead to your destruction. If you are in a competitive
market, doing nothing is exactly what your competition is
hoping you will do. The reverse mortgage pie has only so
many slices and when it gets completely divided, you may be
left with the crumbs and this is not the place you want to be.
Now is the time to consider a complete business diagnostic.
You must dissect every facet of your business model.
Here are some tips for your diagnostics and consideration:
• Review your current and projected expenses to find
waste and opportunities to increase your profits.
• Review your current marketing systems to find missed
opportunity costs which lead to missed profits.
• Review your training curriculum. Are you keeping pace
with program changes? Are your new originators up to
speed? Can you or they explain TALC and what it really
means? Do your originators and staff know the specific
terminology relative to the reverse mortgage industry?
• What is your current pricing structure? Are you
consistently offering products that will give you the
proper return in order to stay in business?
• Have you reviewed your sales processes to ensure
maximum conversion from prospect to converted active
origination?
• Have you reviewed your current ads, direct mail pieces,
letters, brochures, and other marketing materials and
changed them if they are not working?
• Is your criterion for direct marketing pinpointing the
highest probability sales model? Are you challenging
your list provider to make sure they understand what
you are looking for them to produce and what is
producing the highest return on your investments?

28 reversereview.com
• Is your entire team rowing the boat in the same
direction? Is there one leader who is asking for input
from all team members? If one team member fails to
pull their weight are you willing to let them go or decide
what you need to do to get them on board before they
drown everyone?
• What affect will new legislation have on your business?
Are you prepared to quickly change marketing efforts
once HR3221 is fully implemented or partially clarified?
A regular review and assessment of your business is of
the utmost importance if you are going to succeed during
these harsh times. You must be prepared to change your
strategies. If your diagnostics recognize flaws in your system,
you must change them.
Fine tuning your business is where you can substantially
improve your net profits without working harder or longer.
Remember, working smarter is the secret to more profits.
Another tactical approach may be to address other expenses.
You may be tied to a lease or a projected long-term contract.
You may be surprised landlords and others may be willing to
work with you and lower your monthly expense, if you lay
it on the line. Remember, they are experiencing the same
thing as you. There are not a lot of new tenants willing to
pay for your space or new businesses that will pay the rent
your landlord is asking.
Not asking to lower your expenses is similar to not asking
for a sale. You will never get the sale if you don’t ask. So,
what do you have to lose if you don’t ask?
If you are experiencing harsh economic times, you must
consider the fear and anxiety your senior clients are
experiencing.
Here are some key points to keep in mind:
• Your senior prospect’s spending may be outstripping
their savings.
• Your seniors may be unable to keep up with the current
cost of medical care.
• Many of your seniors are under the perception social
security will give them a comfortable retirement and
realize now savings have not kept pace.
• Paying for groceries and gas is a weekly financial burden
and puts undo psychological pressure on your senior.
• Many are unable to budget for unforeseen expenses.
• Fear the stock market might collapse, thereby losing
their 401K, IRA, or pension incomes.
Review the latter key points. There are a vast number
of opportunities for you to be a resource for your senior
prospects during these harsh economic times. These are
the times you should use your consultative selling skills. You
must be prepared to empathize and show genuine concern
October 2008
for the fearful things your senior clients are experiencing.
You must offer solutions a reverse mortgage can provide for
your seniors.
Recently, I was taking an application from a borrower
who was facing foreclosure. Luckily, we were able to stop
the foreclosure and save our senior client’s home. Our client
was 79 years old. She had no money saved and her husband
had passed within the last year. During our meeting she sat
shaking and sincerely worried about her predicament. My
heart went out to her and I knew we had to try our best to
reassure her we could save her home. Luckily, it all worked
out and she was able to remain in the home in which she
and her husband had raised their children and had fond
memories. I have heard of similar stories and I am sure you
have probably experienced similar situations. Surely, your
ability to solve these severe situations will position you to
be a good steward and client advocate to help get seniors
through tough economic times and when this occurs you will
naturally insure your future success and survival.
The NRRI (National Retirement Index) reveals nearly 45
percent of households are “at risk” of not having enough
money to maintain their living standards during retirement.
This fact is noteworthy, since many folks have not saved
enough money for retirement to keep up with the same
standard of living when they were working.
Stimulating your prospective senior clients is tricky. You
don’t want to seem too pushy, but you must be politely
persistent. Your senior prospects are being bombarded with
many possibilities, which add to their anxiety. For you to
survive and endure during harsh times your goal must be
to increase your audience, and in turn this will result in you
being able to talk to as many senior clients as possible. The
more seniors who get to know you, the more relationships
you build, thus ultimately resulting in more business for you.
Now is your time to make serious choices. Are you a
survivor or are you going to be a casualty? I am sure you
want to survive the current harsh times. History has proven,
when harsh economic times occur, they are usually followed
by prosperity and resurging profitability for those who
survived the tough times. Now is the time to implement the
strategies necessary for your survival. Good Luck.
If you are stuck and feel like you have no where to
go, or you simply want to talk through some ideas and
solutions for your specific business, email me to set up an
appointment for a free 30 minute consultation. My email is
sam@samcollinsmarketing.com . To see tools and systems
to help you through these harsh times, visit http://www.
samcollinsmarketing.com or consider joining the REMALO
Membership Team, http://www.remalo.org.
29
 The Good,
The Bad
& The Ugly Shannon Hicks
Is the FHA Legislation for reverse mortgages all it’s cracked up to be?
It’s perhaps the most hyped and anticipated legislation in the reverse
mortgage industry. The Housing and Economic Recovery Act (HERA) and the
FHA Modernization Bill. Conventional wisdom on the street touts the benefits
as the greatest advent since the arrival of Robert Wagner on television ads.
While positive in many respects pundits are missing some of the drawbacks
and unintended consequences of this new legislation.

Origins of Bill

While there were many reasons for the changes to the FHA reverse
mortgage, a few key areas were the catalyst of the bill: Loan limits, origination
fees and financial product sales.

If you are unfortunate enough to live where your commute entails staring at
the bumper of the car in front of you for extended periods of time, then you
are fortunate to work in a higher lending limit area. Lending limits across the
country varied wildly from $200,000 to $362,790 for FHA HECM loans. One
result was heavy market penetration in urban areas while less populous areas
garnered less attention. Loan originators enjoyed more qualified properties
due to the higher principal limit and larger paychecks based on higher property
values. As a result, this left smaller communities on the table as viable, but less
profitable areas in which to market. More importantly it left many borrowers
with higher valued properties unqualified due to their area’s lending limit. The
lending limit increase passed in October brings a more equitable opportunity
for qualified borrowers to obtain a reverse mortgage without being penalized
for living in a less-populous area.

FHA has Changed Your Paycheck

Another key change in the new legislation is the reduction of loan origination
fees. I would suggest this provision is rooted in the myth of the greedy reverse
mortgage originator and the desire of lawmakers to garner political points with
the populace for being “consumer advocates”. As originators we knew this bill
would reduce our income, but hoped the increased lending limits and more
qualified properties would compensate for the loss. The reality may be quite
different. Why? Most property values are rapidly falling and with consumer
confidence shaken, it may be quite some time before we see loan production
offset reduced loan origination fees. Also, to date HUD has yet to settle upon
what the new loan limits will be.

30 reversereview.com
 So where does that leave us today? Let’s take a $350,000
property with a lending limit of $321,955. Total loan
origination fees would be $6,439, or 2% of the lending limit.
The new loan origination for the same property is 2% of the
first $200,000 in value, then 1% above that to a maximum of
$6,000. What is the new loan origination fee? $5,210 or 20
percent less than before! What happens when lending limits
are finally approved? The loan origination is now $5,500, but
still 15 percent less. Ironically, the FHA insurance remains a
full 2% of the property’s value or maximum claim amount.
Smaller lenders will have to cut expenses, staff or increase
overall loan volume to make up for reduced loan origination
fees. This poses a challenge as overall originations have
fallen sharply this year.
We’ll never fully know why FHA saw fit to reduce loan
origination fees. We can only guess that it was an effort to
lower the upfront entry costs and to protect consumers
from “greedy” loan officers. AARP was one of the biggest
forces behind this provision in the bill. Strip away the hype
and the truth is the cost of originating a HECM loan has not
gone down. Reverse mortgages are one of the most labor-
intensive and time-consuming loans in our marketplace.
The vast majority of loan officers in our industry are caring
individuals with the desire to provide the best service
possible to our senior clients. A typical reverse mortgage
originator’s loan volume was less than that of his forward
mortgage counterpart (before the market fell) because of the
labor-intensive nature of the loan. What was different? We
had to fully disclose our true origination costs upfront while
many in the forward mortgage space could charge a smaller
upfront fee then make much more on the back end of the
loan.
The Wild West
Besides loan limits and origination fees, the FHA sheriff has
ridden into town to chase out the bad guys. Now, no reverse
mortgage originators may cross sell financial products,
or benefit financially from their sale. Did I say bad guys?
Well, yes if you consider those who came into the reverse
mortgage business with the only intention of selling financial
products. As with any new market the early days often end
up looking like the Wild West. As the reverse mortgage
market expanded much like Manifest Destiny in the last five
years, shady players arrived on the scene along with the
early pioneers.
One of the industries that seized upon reverse mortgages
initially was the financial and insurance industry. The
reason was easy; the largest holder of wealth in the country
(seniors) and trillions of dollars of untapped, invest able
October 2008
assets. While this may have fueled expansion of the product,
it spawned a host of problems. The temptation was too
great for many who asked themselves “why make $3,000
on the sale of a reverse mortgage, when I can make another
$6,000 selling an annuity?” So, compelled by greed, many
insurance-licensed originators placed reverse borrowers into
products that produced no income benefits but lined their
pocketbooks quite nicely. They had forgotten the mission
and were consumed by the commission and lawmakers had
to step in.
That being said, we must ask ourselves, “is the sale of
all financial products a bad idea with reverse mortgages?”
While consumer protection is good for the borrower due
to abuse, financial products may be appropriate in some
instances. The real key here is someone besides the loan
originator should be able to provide the borrower with
options where appropriate. The needs for long term care and
not outliving one’s income are two of the greatest concerns
for seniors. I’ve often wondered, what is the exposure to the
borrower if they leave all of their money in the loan, versus
separating it and taking complete control? That’s the role
of an outside advisor removed from the loan process, but a
valid question nonetheless. While protected, the consumer
must remain empowered to make decisions in their best
interest. The provision prohibiting loan officers from cross-
selling financial products is good, but in the end, lenders will
have to police their own.
Overzealous lawmakers:
There’s an adage in sales that goes like this: always be
selling. I would argue a similar one applies to lawmakers,
always be campaigning. Lawmaking in our nation’s capital is
largely a reactionary process. A problem rears its ugly head
and lawmakers try to fix the problem as best they can after
the horse is out of the barn. The FHA Modernization Bill
covered a host of lending problems facing our country and
the reverse mortgage provisions were a small part of the
overall plan. The mindset most lawmakers approach issues
with is a litigious one versus a business worldview. Why?
Most of our lawmakers are attorneys.
While making a bill watertight legally is good, the business
end of the bill is often overlooked. I would venture to
guess very few lawmakers who worked on the bill had any
lending experience. This leads special interest groups with
experience in the lending industry trying to influence and
educate our elected officials. It’s this lack of real world
experience that often leads to trouble.
»
31
The Law Of Unintended Consequences
Because the reverse mortgage is the child of FHA
legislation in the late 1980s, it’s the government’s game
and their rules. That’s fair. But one wishes that more
consideration was given to the true effects legislation will
have on businesses and the consumer in the end. Having
observed what goes on underneath that great dome in DC, I
would venture to say that lawmakers are masters of the law
of unintended consequences.
Ironically, shortly after the new FHA Modernization Bill
passed with reduced loan origination fees, banks responded
promptly by increasing margins. This increase in margins
was not solely driven by investors seeking more safety in the
secondary markets, but banks having to compensate for the
loss of loan origination income despite the static costs of
originating a reverse mortgage. Within a week we saw banks
increase their margins for HECM products a stunning 50
basis points. Assume a portion of the margin increase was to
offset lower origination fees and you can easily see the long-
term costs will far exceed what the consumer saved up front.
These are side effects anytime the free market system is
over-legislated. The politicians get the publicity of “consumer
protection” while the consumer foots the bill. In fact much
of our current housing crisis is rooted in bad legislation of




the 1990s that had the intention of making “lending more
equitable and accessible” to the average American.
This summer Washington State seniors experienced
the brunt of legislative “good intentions” when legislators
voted unanimously to move unregulated mortgage brokers
under the scrutiny of the Department of Financial Services.
The end result? Businesses subject to the new Consumer
Loan Act (mostly brokers) were banned from doing any
“reverse style” mortgage. Lawmakers left in their wake a
mess where only banks and credit unions could offer reverse
mortgages eliminating much choice and availability for the
consumer. When asked about the unintentional banning of
reverse mortgages, director of the Department of Financial
Institutions Scott Jarvis replied, “Sometimes, legislation
may have unintended consequences, but if no one comes
to complain or bring it to their attention, it’s not fair to fault
the Legislature for it,”. I think that pretty much sums up the
legislative viewpoint.
Even more recently California seniors and reverse
mortgage lenders had reason to be concerned about new
lending legislation with the introduction of Assembly Bill
1830 drafted by Assemblyman Ted Lieu. This bill made it
all the way to Governor Arnold Schwarzenegger’s desk
only to be vetoed. The bill would have banned all negative

 









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For more information contact Laura R. Ward at lrward@cls.us.com or 866-724-0040.

www.CLS.us.com

32 reversereview.com
amortization loans. Fortunately an amendment was made to
exclude reverse mortgages from the negative amortization
prohibition. Imagine if this small detail had been overlooked.
You can see how the devil is in the details and the
importance industry vigilance plays in today’s regulatory
environment.

What Lies Ahead?

To be fair, there are many good things that came from FHA
Modernization Bill and Housing and Economic Recovery Act.
One is the ability for seniors to use a reverse mortgage to
purchase a home. The other is homeowners in previously
low lending limit areas will benefit from a national lending
limit of $417,000 targeted to go into effect November 1st. In
fact those lending increases may save thousands of seniors
from foreclosure who need to escape adjustable rate loans.

The FHA insurance fund will do quite well with lending

limit increases, if we can keep the monies safe from
Congressional spending. Increased lending limits will make
more money available to borrowers, but also entail higher
insurance costs. The two percent charge upfront and the
ongoing .5% charge seem more than sufficient to offset the
limited exposure to loan deficiencies. This is good news
because the coming wave of baby boomers will most likely
precipitate another boom in reverse mortgage loans that
must be secured. The less risk to investors means continued
access to HECM loans.

Today we stand at a unique crossroads in the reverse

mortgage industry. Interest rates are historically low today,
but will most likely increase. Also many companies will be
moving from the CMT index to LIBOR in the effort to secure
larger lines of credit from international pools of investors.
Couple this with the strong possibility that home values may
continue to decline for the next several years and seniors
may have their best opportunity to maximize the benefits of
a reverse mortgage today than in the future.

With change comes challenge and opportunity. It is up

to us to evolve and adjust to the new marketplace. If we
do, brighter days lay ahead and more Americans will retire
comfortably with a reverse mortgage.

October 2008 33
 Borrowers With Personality
You may not think (from the title agent’s perspective) it
makes much difference what a borrower’s age, mental state
or personality is like. However, when dealing with reverse
mortgages these are very important attributes to consider.
I have been handling reverse mortgage closings for almost
fifteen years, and it became apparent early on just how
relevant this can be.
One of my first reverse mortgage closings was at a
borrower’s home. The loan officer met me there and when
we concluded the execution of the documents he quickly
excused himself, as he was late for another meeting, leaving
me with one of the most fearsome and fearless individuals in
this business. No it wasn’t the state insurance commissioner.
No it wasn’t a class action attorney. It was an elderly widowed
woman, with pictures of her children and grandchildren, a full
pot of coffee and cookies………… Obviously the loan officer
had been in this situation before and knew enough to quickly
throw me in front of the beast while he made a quick escape.
The point, of course, is that many senior borrowers
are much different than other borrowers. They’re retired.
They’re on a different schedule. They’re not caught up in
the rat race any longer, and operate at a slower pace than
the rest of us. They don’t want to be hurried, so we need
to slow down to their pace. In addition, recently there have
been many more “sub-prime reverses” taking place. This is
largely due to the current economic climate. I have come to
recognize that there are several types of senior borrowers. In
addition, there are particular financial issues that affect these
seniors with resultant title issues. Below I have summarized
six categories of senior borrowers. Why is this important to
the title agent? If you can recognize the type of borrower you
have it will greatly enhance your ability to clear title issues.
The title issues haven’t changed, but how you interact with
the borrower to resolve the issues will go a long way in being
able to do so more expeditiously.
The six categories are divided into two parts, the old
senior and the new senior. Actually, the old senior is more
appropriately termed the traditional senior; think of your
parents or grandparents. The traditional seniors generally are
more conservative, have lived in their homes for a number of
years, have only owned one (possibly two) homes, paid off
their original mortgage a long time ago (maybe refinanced
34 reversereview.com
eview.com
David Gutmann
once - and paid that off as well), and have few if any credit
cards; although we are beginning to see this change with the
“sub-prime reverses”. The new seniors, on the other hand,
are more a product of the times. They have owned two or
three or more homes, have refinanced a number of times,
have numerous credit cards and are more attuned to how the
system works.
Clara
Clara is an elderly widow. Unfortunately, she doesn’t
totally understand financial issues. When asked about
financial matters her response may be “My husband always
took care of all the bills”. This type of borrower could also
be an elderly widower. He or she is usually doing a reverse
mortgage for the more typical reasons; additional monthly
income, to come current with real property taxes, or making
repairs on the house. They are also looking for guidance,
if they don’t already have that from a child or other family
member. If treated like parents or grandparents, they can
become very trusting of the loan originator and even the title
agent very quickly. Like the other categories of traditional
seniors they tend to save everything, which can be helpful
when trying to track down the mortgage satisfaction from
that mortgage paid off twenty five years ago. They have
it in a file somewhere, they just didn’t know what it was
when they received it, or what it looks like. I remember
one originator calling us from her cell phone in a borrower’s
attic going through a number of boxes of papers looking for
documentation to clear several title issues. If you don’t have
such an ambitious originator working with you, you may end
up having the borrower faxing or sending you numerous
documents hoping that one of them is what you need. Even
my own dad, who passed away several years ago, still had the
original contract from the purchase of what was his newly
built home, along with the change orders and invoices for
light fixtures from over fifty years ago. Not to mention all the
paid receipts for all the carpeting and appliances replaced
over the years. You can spend an extraordinary amount
of time on the phone with these senior borrowers tying to
obtain information or locate documentation. In addition,
they sometimes use this as an opportunity for visiting. “Are
you married? Do you have any children?” Brushing them off
quickly can be risky, as this may come across as being rude.
There can be a fine line between “being rude” and spending
an extraordinary amount of time on the phone with this
borrower. Your title clearing or escrow personnel need to be
able to recognize this type of borrower rather quickly and be
able to walk that fine line in order to gather the necessary
information and form a bond with the borrower at the same
time.
Fred
Fred, the second type of “traditional senior” may
be diagnosed with dementia. It’s not usually advanced;
otherwise he would have a family member or friend assisting
with his application. These borrowers are quite often
using the reverse mortgage as a means to remain in their
home and pay for in-home care. They usually have trouble
comprehending the issues involved as well as difficulty
remembering certain details or transactions from the
recent past. With regard to a mortgage refinance just three
years ago you might hear “I probably did, but I just don’t
remember”. With these seniors you should be prepared to
find out if there is a family member or friend who can assist
them with requests you may have. Don’t forget that these
borrowers, too, have accumulated many years of documents
relating to their home, and a family member may know
where to look for clues. Also, many times the loan originator
may be able to fill you in on the borrower’s mental capacity
prior to you contacting them. Or, the originator may find it
better if you deal with them rather than the borrower, so as
not to confuse them. Too many parties to the transaction all
contacting the borrower with different requests can cause
unnecessary confusion.
Helen
Helen is another “traditional” senior borrower and she
is in financial trouble. She has a limited understanding of
financial issues, but is in desperate need of help. She has
numerous credit card bills, real property taxes that are in
arrears, and mortgage payments in arrears. These types
of borrowers may have also had foreclosure proceedings
commenced, whether for taxes or mortgage loan. In addition,
they may have filed for bankruptcy. Some may be behind on
their Chapter 13 payments and risk having their bankruptcy
dismissed. Their bills have reached a critical level and they
don’t know where to turn for help. Fortunately, the mortgage
originator found them, and as it turns out a reverse mortgage
may help payoff their debt with no monthly payments
going forward. I say may, because much of this depends
on how much equity the senior has in their home. A debt
level exceeding the value of the home means that a reverse
probably is not the answer. Even if it is the answer there can
be a considerable amount of work; from coordinating with a
bankruptcy attorney and trustee, to holding off a foreclosure
proceeding. These are usually time consuming and
complicated issues to deal with when time is of the essence.
October 2008
Octobe
In addition, we have had several files where the
foreclosure proceeding had already resulted in the sale of
the property with no opportunity to redeem. At this point a
referral to an attorney and possibly social service agencies
may be the best that can be offered. Don’t forget that
these seniors don’t know where to turn for help, and simply
providing some telephone numbers may be enough to point
them in the right direction. Many times the borrower’s
situation may become evident before you as a title agent are
involved in the transaction and the loan originator may have
already made a referral. However, there are times when the
title agent may be asked for this type of help. Why would you
want to bother with this if there is no possibility of a closing
and no fee? Simply put, because it’s the right thing to do.
Consider it your civic duty, and a way of “giving back”. Don’t
forget, you want to treat these folks as you would your own
parents or grandparents. Also, if you are able to recognize
this type of borrower early on, asking some questions and
staying in contact with the loan originator, may help avoid
wasted time working on title issues that ultimately won’t get
resolved. Plus, your customer knows that they have someone
they can count on.
Sophie
Sophie, although having exceeded her life expectancy
is still very sharp, understands financial matters, and has a
firm grasp on what she is doing. These seniors are frequently
doing a reverse mortgage in order to be able to remain in
their homes during their last years. Some are terminally ill
and are using the reverse to pay for in-home care to remain in
their home, in familiar surroundings, with their family at their
side. They are usually well aware of what they are doing and
are consciously leveraging their equity to make their lives and
possibly their last days more enjoyable and comfortable. I am
reminded of the transaction we handled for a borrower over
100 years of age, whom we are told is still enjoying her home.
My staff tells me that she was “as sharp as a tack” throughout
the process. As you might imagine these senior borrowers are
able to assist quite well with any title clearing issues. It is also
important when dealing with end of life issues, to advise your
witness/notary closers of the circumstances so they know
what to expect when meeting with the borrowers to sign the
documents.
The last two categories of seniors fall into a different
age group, and could be called the “new seniors”. These
borrowers range in age from 62 to 72 or thereabouts.
Dick
Not unlike my third category above, Dick has financial
issues. However, he is pretty familiar with the issues, as he
has been there before. He has previously refinanced for the
»
35
same reason. Using his home equity to get out of financial
trouble. Think credit card debt, home equity lines of credit
and multiple refinancing. This was always possible while
property values were on the rise and he always had increasing
equity to tap into. Now it’s a matter of paying off the debt
and having no payments going forward. These borrowers
know how to the system works and are familiar with the
length of foreclosure proceedings and how to avoid process
servers. They are confident that they know more than you
about legal issues and title related matters and can be quite
convincing, especially to the title novice. They have even,
on occasion, convinced a loan originator that their title
agent doesn’t know what they are talking about. As soon as
you recognize that you have this type of borrower, have a
conversation with your loan originator so that they know what
the issues are, and what you need to do, and will be doing
to clear up those issues. Already having established a good
working relationship with your customer goes a long way in
this regard.
Marty
Marty doesn’t really need a reverse mortgage, like our
other borrowers. He is knowledgeable about reverses and he
may have the assistance of his CPA and/or attorney. He also
has a specific use for the equity he is tapping into. He may be
purchasing a sail boat, sports car, vacation home or planning
36 reversereview.com
on traveling. These borrowers have more than enough
equity in their homes for purposes of the reverse mortgage.
Generally speaking these transactions do not have major
title issues. These would be on par with jumbo conforming
forward mortgages. Some borrowers have had considerable
experience with financial transactions and prefer to move
matters along and “get the deal closed”. Others will want to
carefully consider all the costs and details. After all that is
how they got where they are; by being careful and reading
the fine print. In either case title clearing should not be time
consuming.
Naturally, personalities are as diverse as the number of
borrowers with whom you will interact. Categorizing some
more common traits could help in setting your expectations
as to how much time will be necessary on particular
transactions. In addition, you may be able to identify which
of your staff will interact best with each type of borrower. I
know enough now to ask a few questions of my staff before I
head out to a closing just in case I need to spend some extra
time for visiting. I’ve matured since those early closings. I’m
now a member of AARP and don’t mind spending a little extra
time with a borrower. Besides now I have my own pictures to
share.
 directory

1st Reverse Financial Services, LLC
A Subsidiary of Wilmington Savings
Fund Society, FSB
(877) 574 - 1000
info@1streverse.com
National Reverse Mortgage Lenders Assoc.
(202) 939 - 1760
Reverse Fortunes.com
nrmlaonline.org
(866) 592 - 2096
reversefortunes.com
info@reversefortunes.com

Next Generation Financial Services

America’s Recommended Mailers, Inc. Reverse Mortgage Nation
(800) 992 - 2722 (888) 973 - 8377
armleads.com ngfs.net
Gretchen Williams
Reverse Mortgage Adviser
(888) 407 - 6365
reversemortgageadviser.com
OnTheLevel
AppraiserLoft (800) 909 - 1110
(877) 229 - 7799 onthelevel@mac.com
appraiserloft.com Reverse Mortgage Association for
information@appraiserloft.com Loan Officers
(877) 2NARMLO (877) 262 - 7656
remalo.org

Premier Reverse Closings

(800) 542 - 4113
Celink
prclosings.com
Reverse Mortgage Servicer
www.celink.com

Reverse Vision
(919) 834 - 0070
Stephen Kinney reversevision.com
Stephen Kinney Associates, Inc info@reversevision.com
(973) 842 - 0081
Customized Lender’s Services, Inc. stephenkinney.com
cls.us.com

John Lunde
Reverse Market Insight, Inc. Paul Fiore
International Document Services (949) 429 - 0452 World Alliance Financial
(800) 554 - 1872 rminsight.net (800) 562 - 6755
idsdoc.com info@rminsight.net wafcorp.com

October 2008 37
the last word
Stephen Kinney - You, of Tender Years, Can’t Know the Fears, Your Elders Grew By
The turmoil in the financial markets in the past few weeks,
and recent experiences with my own parents got me thinking
about the words of my favorite Crosby, Stills, Nash, and Young song
“Teach Your Children”: “And you, of tender years, can’t know the
fears, that your elders grew by, and so please, help them with your
youth.....”
To me, these words are about the importance of sharing life
experiences between parents and children. Last November my
mom called me because my father was having difficulty managing
their day-to-day finances. My 79-year-old father, who until recently
worked a 35 hour week, had begun suffering from the effects of
advanced Diabetes and Parkinson’s disease.
Now my mother was faced with the challenges of my dad’s
declining health, and taking over the household finances. She
was completely unprepared. Over the next few months I spent
days going through their paperwork and the household finances,
tracking down assets, and trying to make sense of the investments,
insurance, and annuities they had accumulated over the years.
While my father was doing the best he could, I was shocked to
discover that over the years he had been victimized by investment,
insurance, and annuity schemes, as well as trusted investment
advisors who put the amount of the commission they made ahead
of my parent’s best interests.
Over the years I rarely had conversations with my father about
their finances. When I did they were usually brief. Occasionally, I
would see a bank or investment statement and quiz my dad about
them. I expressed concern over the performance of these funds
and my dad would respond, “I trust Mary Smith (not her real
name), she handles our investments.” In hindsight, I regret letting
it go, but I was afraid of prying.
Adult children often don’t ask their parents about their
finances, and seniors are often reluctant to talk about them. A
recent survey by Crestwood Associates for lender Golden Gateway
Financial backs this up. The survey indicated that 50% of seniors
have not had an in-depth discussion about their own finances with
their adult children. More telling is that nearly 40% of the seniors
surveyed had not discussed their finances with their children
because “that’s the way they wanted it”.
Past research reveals that seniors are concerned about privacy
or not wanting to burden children with such matters. However, for
many seniors and their children, not talking about their finances is
a serious mistake.
The turmoil in the stock and credit markets must be very
frightening to seniors. Even if they didn’t live through the
depression, senior parents grew up in a simpler time; well before
mortgage backed securities and credit default swaps. Unless
they’ve been very diligent, it’s likely they have not kept pace
with changes in modern investments and finances. Heck, Wall
Street doesn’t even understand them. The sophistication of
modern investments, combined with the overwhelming variety of
38 reversereview.com
complicated options, make seniors easy targets for smooth talking
investment advisors who are not necessarily looking out for their
best interests.
Children of senior parents grew up in a different time; we are
more familiar with these products. Even seniors with children who
have limited knowledge of investments can make wiser choices by
seeking help from a child. Children can help research a prospective
investment, helping parents to ask the right questions, read the
fine print, or find an ethical advisor. Children who get involved in
parents’ finances benefit by gaining perspective on their parents’
retirement, and their own. Lessons learned from parents’ years
of experience will benefit their own investment and retirement
planning.
In the reverse mortgage industry we struggle with stories of
seniors victimized by unethical originators every day. We’ve all
seen how each of us becomes a victim when just one person in
our industry takes unfair advantage of a senior. Thirty-two percent
of reverse lenders in a recent survey indicated that negative
publicity was the cause of loss of business. With more than 1300
new lenders entering the industry this year alone, each of us has
responsibility to insure seniors are making an informed, thoughtful
decision, and to guard against a few unscrupulous originators
taking advantage of seniors. NRMLA has set up procedures to
report abuses, so protect seniors and your industry by making
them aware of originators abusing borrowers.
In my training classes I often teach participants methods
and techniques to develop trust. I do this because I truly believe
it is in every senior’s best interest to understand what a reverse
mortgage can do for them. Without trust, few seniors will take
the time to listen to all you have to teach them. With that trust
comes the responsibility to do your best for them, and that entitles
your to earn a fair return in the process. Sometimes doing right
means losing a sale, but the trust you earned will likely pay you
back three-fold in positive word of mouth, referrals, and a place in
Heaven.
So what’s the moral of the story? For you and your parents;
Insist on getting involved! Even against your parents protest, let
them know in the end all decisions are theirs, but two heads are
better than one. Each of you will benefit from the exercise and
each other’s perspective.
For your clients; get seniors and their children talking about
finances. Invest in yourself and your clients by reading everything
about reverse mortgages and seniors. Invest in a comprehensive
training program and become an expert in your field. You may
not be able to do the job of a certified financial planner, but your
clients will benefit and your sales will grow. Take a little extra time,
preferably with children present, to do a cash flow analysis of how
a reverse mortgage may (or may not) help them live a happier,
more comfortable life.
“And you, Who are on the road, Must have a code, That you can
live by.” - Crosby, Stills, Nash & Young
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Register before September 20 and Save! NRMLA Members receive a 20% Discount
To learn more and register, see us online at www.nrmlaonline.org/annual2008
Or call us today at (202) 939-1760