Are We Evolving or Devolving?
Friday, 09 July 2010 07:59
As 2010 continues to unfold, the reverse mortgage industry casualty list continues to grow. The casualties seem to be taking place on all sides of the spectrum.
The industry continues to lose loan officers as this current environment makes it close to impossible to earn a living. Small to medium mortgage brokers continue to drop like flies and many correspondent lenders are looking at the new net worth requirement guidelines as a death blow.
The $250 million in credit subsidy that the FHA is requesting does not appear to be happening as I write this article, which almost guarantees an additional principal reduction. This, combined with ever continuing appraisal issues on the great majority of our files, is another huge gut shot to our beloved evolving industry.
Should reverse mortgages be used to finance Long Term Care insurance, in home care, life insurance and other various investment products? This subject itself is causing a very emotional debate between those of us still standing.
Our good friend Senator Clair McCaskill continues her relentless mission to offer inaccurate and harmful information to the very seniors she claims she wants to protect and now she has a new best friend…Consumer Reports. Clair McCaskill and Consumer Reports…the Stevie Wonder and Ray Charles of the reverse mortgage industry!
So, are we evolving or devolving?
Many would say we are devolving. I would say we are most certainly not! (Big surprise there…)
Every life changing product that has been introduced to this nation in the last few decades has been met with the very same obstacles and “reshaping” periods in the beginning of their evolvement as well. And make no mistake about it; a reverse mortgage (when used correctly) is a life changing product!
You want examples?
Cable TV: I remember the masses in the 1970s unequivocally taking the position of “pay for TV, what are they, crazy? We already get it for free!”
Home Computers: Who the hell needs a home computer?
Cell Phones: Why would anybody need a cell phone? There is a phone booth on every corner!
Map Quest: What the hell is that? Google? Isn’t that against the law in most states? Yahoo? I love that drink!
The list goes on and on. It brings to mind one of my favorite sayings: “Those who say it cannot be done are usually interrupted by someone doing it!”
The reverse mortgage industry is here to stay! Today’s reverse mortgage looks nothing like that of just 3 years ago. And guess what? In 3 years it may look totally different than today! But, it will surely exist, helping seniors maintain and, in many cases, increase their quality of life!
The reverse mortgage is evolving and it will be an accepted vehicle for allowing seniors to avail themselves to financial services and products they never would have had before.
But how do we survive until then, as an industry and as individuals?
Here are my 2 answers:
For those of you that have read my articles in the past, it’s the same message. Education, education, education! I sometimes get negative comments and feedback on my philosophy of how the positive reverse mortgage “word” needs to be introduced to the masses.
This message will never be delivered properly through the mortgage industry. My apologies to my mortgage brothers and sisters; we are not, nor have we ever been the voice, the eyes, or the ears of the senior population of this country! Although no one will ever convince me that the reverse mortgage industry is not the noblest group of the mortgage industry today, we must admit that the mortgage industry itself has been tarnished by the events of the last couple of years; we just don’t have the credibility to silence critics like Senator McCaskill or Consumer Reports. Put your egos aside and let’s evolve into that voice! And how do we do that?
EDUCATION, EDUCATION, EDUCATION!
And just who do we educate?
How about the 60,000 Certified Financial Planners in this Country? How about the 1.2 million insurance agents that seniors actually call every time they need to access their life insurance, long term care insurance, or annuities; to inquire why their homeowners and flood insurance premiums have skyrocketed? How about the 1.1 million attorneys that are involved in estate planning, wills, trusts, Medicare and Medicaid issues? How about the 726,000 bankers? How about the 476,000 CPAs? How about 1.2 million accountants? How about the 649,000 registered representatives that actually speak to seniors everyday about their financial security? And, how about the 1.1 million realtors, a great majority of which don’t even know that a purchase reverse mortgage exists?
These groups, these industries are the eyes and ears of the senior population, not us!
But, we are their eyes and ears to the reverse mortgage world!
EDUCATE, EDUCATE, ECUCATE!
Educate these millions of potential referral sources and they will educate the tens of millions of seniors in this nation that can benefit from this incredible product we all believe in so much!
There is still much debate ahead of us in order to accomplish the above. There is still a need for strong and accurate “suitability standards” to protect our seniors and I look forward to that debate and hope to be heavily involved in the development of those standards. But, make no mistake about it; once the bond between those industries mentioned above and the reverse mortgage industry is forged, the reverse mortgage industry will be here to stay! It will be a great asset to seniors and it will flourish! And once those very powerful industries put their muscle behind this great product, you will see our detractors change their tune so quickly—even Stevie Wonder & Ray Charles will suddenly and miraculously gain sight!
Now, how do we all survive while this great evolution is taking place?
That’s the tough question. So many of us, including myself, have exhausted every option to keep our companies’ doors open through these record breaking bad times. We have cut expenses, been forced to lay off associates that had grown into friends, borrowed on our homes because we believe we are on the noble path…There is just no easy answer for this one. It’s as much a personal dilemma, as it is an industry dilemma. But I have an idea.
It’s time for a roll up.
It’s time for a bunch of us little guys, (who, buy the way, used to be kind of big guys) to get together and form a company that takes this industry by surprise. We need a company that is capable of educating the masses discussed above, one that gives some muscle and gains some “staying power” to take this industry and ourselves to the next level.
And guess what else? This company could also allow its players to have an equity position in the company. How about an equity position that grows with time and volume? An “exit strategy” for the independant reverse mortgage broker/lender. It’s time….
I think it’s time we all started talking. This is our industry; it is our future and those of us that believe in it need to start taking contol of it.
Another one of my favorite sayings: “You know the best way to predict the future? Make it happen!”
I leave you this month with thoughts and prayers that all of you will survive these rough times and enjoy prosperity again in the near future.
Let’s help as many seniors as we can.
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