Written by Lisa Schreiber Thursday, 01 May 2008 12:15
I’ve been in the “forward” mortgage industry for over 22 years. From my start in post-closing all the way through retail and wholesale sales to sales management and EVP of American Brokers Conduit, I thought of myself as one of many knowledgeable people in our industry.
Since starting my new venture as a consultant, I have relied on my experience and past industry partnerships and colleagues to build my business. Truth be told, I knew of reverse mortgages and like many didn’t think positively of the product as my perception was that they negatively impacted the consumer. Of course what I have found out through education is, there is a great place for this type of lending for many in our communities.
Education is a primary goal for me in any thing I undertake. I learn from asking lots of questions and listening to the answers. As a consultant I found I had opportunity to be valuable to clients that had either reverse aspirations or reverse platforms. So how did I get started?
First I went to one of my old colleagues that I admire for her sense of integrity and knowledge. I asked her to give me a Reverse Mortgage 101 crash course. She gave me all the industry data and taught me about the different way you had to think about a reverse mortgage. She also opened my eyes to the risks and benefits from the borrower and lender aspects. It was a terrific presentation and I learned a lot!
Next, I started to get industry publications so I could keep up with the changes and issues that confronted the reverse world. Finally, I bought a ticket to the MBA Reverse Mortgage Conference in San Diego last month. I found out later that there was a NRMLA conference in Philadelphia that same week, which would have been handy information as I live in Northern Virginia, but all part of the learning curve!
The MBA Reverse conference was a good one as it looked at reverse mortgages as a newer entity for most, which it was for me and was geared to educate from that perspective. Through the conference I learned the industry statistics, although each speaker had a different number associated with the current available equity, from 2.5-4 trillion, understandable as home valuations are an issue for any type of mortgage these days!
So what were the main things I learned about the reverse world? Besides all the things you already hear; reverse is really a new business and not a product as its sales cycle is protracted due to the fact that you are selling to not only the senior but their family (many cooks in the kitchen) and like our forward world, is highly regulated and becoming more so each day. If you are gun shy about things like suitability and further scrutiny regarding your origination practices, I am thinking this world is not for you.
What I do see is opportunity for those that are willing to be educated. Per my conference speakers, only 2% of the eligible population has been penetrated. I am not sure what the number should be, as many will never need a reverse mortgage, but when I think of my own family members or those of my friends, I can see a real value to many. If we just think of the higher taxed areas of the US where the elderly are living longer than ever before, I can clearly see how the ability to tap the equity in your home to help you through your later years can be a huge benefit. In the forward world without income to qualify for the payments, these same clients have been underserved. Another example of the major differences between forward and reverse worlds is the issue for servicers in the non-payment of taxes and insurance. Think about it, typically we have an escrow payment included in our mortgage payment that goes towards taxes and insurance, even if we waive the escrow (or impound) we understand it is our responsibility. A reverse scenario is more like when we pay off our mortgage and we are now on our own, so many forget that this is now their responsibility. I was happy to hear that servicers are now offering a hold back option to pay taxes and insurance for their borrowers.
In the forward world I also advocate partnerships to develop referrals and talk about expanding your reach by using the internet. In the reverse world the internet is not the primary tool to market to, unless of course you are talking to the children of the seniors you are looking to educate. My favorite thing I learned is the places that make the most sense to hold marketing and educational seminars, Bob Evans and Sizzler restaurants as an example and make sure it is in time for the early bird special!
This is not meant in any way to make fun of or denigrate the importance of this product or its clients! I am just really fascinated by the way my brain started thinking when I learned more about the reverse world. As a “forward thinker” I am glad I took the opportunity to understand the possibilities of helping those that need it the most.
About Lisa Schreiber: Lisa Schreiber is currently a mortgage consultant and speaker with LSK Consultants, LLC. Lisa is a 22 year mortgage industry veteran, formerly executive vice president with American Brokers Conduit and regional vice president with Bank of America. Her expertise resides in building the bridge between corporate goals and successful field implementation. She can be reached by email
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or by phone 540-822-9710.
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