The Sky is Not Falling! Ignore naysayers and stay positive

The Reverse Review - January 2012

Last Updated on Thursday, 18 February 2010 17:24 Written by Kenneth J. Klawans Monday, 07 December 2009 09:13

Currently in the reverse mortgage industry, negativity is rampant. The news is typically piled with negative report after negative report. Consumer Reports say our industry is the next “financial fiasco”. The National Consumer Law Center calls reverse mortgages, “Subprime Revisited”. It appears we have all had huge targets painted on our backs.

However, misery loves company and many traditionally talented reverse mortgage specialists are using the current environment to find like-minded pessimists. While it’s not wise to ignore market conditions, it’s even worse to let negativity control your activity. Temper negativity with realistic evaluation and maintain a mindset of goal-orientated activity.

Too much negativity has a way of bringing on a defeatist mentality. Unfortunately, as arrows keep flying and the threat of more restrictive legislation is discussed, some folks have succumbed to hopelessness. This was recently demonstrated to me through a conversation I had with a former reverse mortgage specialist. He told me that the market seemed to be decimating and he was actively looking to leave the industry. He explained that he simply couldn’t fight for business anymore and wanted something “guaranteed”.

He admitted that few of the naysayers had an educated argument; they were just repeating news reports, vague market data and what “might be coming”. Unfortunately, all the negativity overcame him. He did leave the reverse mortgage industry and took a position in an industry I feel he is poorly suited for and will likely net even less income than when he was while originating reverse mortgages. So were things so dire?

It’s true his commissions were down from a lower sales volume but only by 10 percent. I’m confident that a talented reverse mortgage specialist like this man could have overcome the slower start in 2009 and at least matched last year’s numbers. Instead, he bailed out.

This is an unfortunate case of too much compiled negativity leading to desperate decisions. Rather than evaluate and recommit to his production, he fell victim to an assault of negativity from the press, co-workers, friends and family. The lack of production was blamed on the market rather than identifying potential modifications he could make to his business model.

Keep a level of objectivity about negativity. If possible, surround yourself with people who can give a straight answer, not a dramatic one. Mindset is a big part of performance and keeping yourself motivated through uncertain times largely depends on not falling prey to negativity and desperation.

If all else fails, repeat the following sentences out loud:

1. I’m a talented, competent, honest, and ethical reverse mortgage professional.

2. A reverse mortgage is a beneficial financial product for the right borrower.

3. There are currently 8,000 people in the United States turning 62 every day.

4. There were approximately 115,000 HECM’s endorsed by HUD so far this year.

5. All I need to close is (fill in your number) loans each month to earn a good living.

6. I’m going to set specific goals and objectives to achieve my target of closing (fill in your number) loans each month next year.

7. Everything’s going to be ok.

So all you have to do is read the sentences above, click your heals and you will be closing tons of deals? Well not exactly.

While it is important to filter out the negativity, it’s just as important to keep a level of objectivity and surround yourself with those who will give you a straight answer. Although I may not know you personally, let me touch on each of the seven items above in an attempt to provide realistic straight answers.

1. I’m a talented, competent, honest, and ethical reverse mortgage professional.

Think about your answers to the following questions. There are no right or wrong answers. Listen to your insides because how you feel inside may be different from the sales pitch you give your clients.

Why am I in this industry?
Is doing the right thing for my client really more important than getting paid on the deal?
Am I more committed to strengthening my sales skills than increasing my technical knowledge of the product?
How long do I foresee myself staying in this industry?

Voice of reason: The reverse mortgage sector is not the “get rich quick” answer for “forward” dropouts. In order to succeed today, you not only need to sell your qualities, you need to be these qualities. Being a good salesperson will only take you so far. Those of us who will succeed have a deeper understanding of our clients and the products we offer as well as an unyielding sense of ethics.

2. A reverse mortgage is a beneficial financial product for the right borrower.

Suitability. (noun). 1. The quality of having the properties that are right for a specific purpose.

My first memory of the recent wave of bad press was hearing about an 80-year old lady who took out a reverse mortgage and was then sold a 30-year annuity with huge withdraw fees. It was obvious that nobody should have sold a 30-year annuity to an 80-year old individual, however, was it wrong for her to take out the reverse mortgage? I don’t know…maybe or maybe not. It very well may have been the right decision to take out a reverse mortgage based on her individual circumstances…however, the reverse mortgage became guilty by association with the annuity.

Voice of reason: If you’re interested in selling anyone and everyone a reverse mortgage, you won’t last long in this industry. Looking at your prospects’ individual scenarios. Identifying and reviewing their available options are critical in determining whether or not a reverse mortgage is a suitable product for your client. Are you able to strike the ethical balance between suitability and sales?

3. There are currently 8,000 people in the United States turning 62 every day.

4. There were approximately 115,000 HECM’s endorsed by HUD so far this year.

Voice of reason: Both of these statistics demonstrate the future and potential growth of our industry. If you’re only in this business for today, these figures really don’t matter. However, those who want to cultivate their business over time, waves of prospects are coming. If you don’t see the opportunity, you may need to seek medical assistance.

5. All I need to close is (fill in your number) loans each month to earn a good living.

I believe it was June of this year; I overheard some negative people complaining that endorsed HECMs fell from 11,660 in April to 8,396 in May. Someone else was talking about leaving the industry because, “…Wells and the other big banks are taking all the volume.”

Voice of reason: How many loans do you need to close each month to earn a good living? So what if there were only 8,396 HECMs endorsed in May? Unless you’re living like a king…homes, yachts, jets, etc., you don’t need to close hundreds of loans each month. What’s your number, 3,.. 4.. 8 each month? In our business, you’re an excellent producer if you’re individually closing 8 loans every month. Think about it…that’s 8 loans out of 8,396 total. Even if Wells and the other big banks take over the world, there will always be plenty of “scraps” left over for you to close 8 loans every month.

6. I’m going to set specific goals and objectives to achieve my target of closing (fill in your number) loans each month next year.

As sales professionals looks for ways to maintain or grow business in a struggling market, I’m always shocked to see a fundamental building block for success missing properly setting goals.

In a difficult industry environment, goals are critical- not only to clearly understand what we, as reverse mortgage specialists, want to achieve, but also so we understand how to get there. Precision goal setting is formulating goals, which leads to a clear plan for success.

Voice of reason: Salespeople are typically big offenders of believing they have set goals when in reality they have not. Do you have goals? Are they written down? Have you shared your goals with anyone who will hold you accountable?

7. Everything’s going to be ok.

We all have pressures. Some pressures are stronger then others…and everyone handles pressure differently. On a broader level, we constantly hear about the state of the economy, the wars, disease and the price of food and housing. On a more tangible level, we have bills to pay, family needs to meet, etc. Are you in panic mode?

Voice of reason: Discovering what’s really important in life is not easy, but well worth the effort in terms of fulfillment and satisfaction. There’s no right or wrong or good or bad answer to what is important to each of us. These are our values. What creates stress and/or panic is when you are not in sync with your values.

Dedicated to the Reverse Mortgage Industry!