Senior money matters!: The stampede of forward Mortgage Brokers is underway!Nelson A. Locke, CRML, RMSSenior mortgage lending
Hello to everyone. I hope your year is going well. Mine
certainly is. Things are fabulous here, and we are grateful. I just
returned from the Florida Association of Mortgage Brokers Annual
Convention and Trade Show, "FAMB Loves the '80s." Each year, this
is the largest Mortgage Broker show of its kind in the United
States. At this show, we generally have a chance to mix and mingle
with thousands of Florida's best brokers, as well as many wholesale
lenders and service providers.
One theme was clear this year. While most attendees put on a
happy face and were there to learn or contribute to our industry,
they could not conceal the sense of fear, uncertainty and doubt
about the future. Things are not going well in the forward mortgage
world. Over and over again, I heard tales of woe about weakening
forward pipelines and the loss of yet another favorite lender.
Usually, the very next thing I heard was some question about how
they could get into the reverse mortgage business. The questions
focused on commission splits and negotiating a better back end. I
didn't hear questions about why this niche of ours was doing so
well, nor did I hear many questions about what a forward Mortgage
Broker needed to do to succeed when working with the senior
demographic. That was worrisome. If you are going to succeed in the
senior demographic, learning how to deal with seniors has to come
first. The best split in the world is meaningless if you can't get
your client closed first.
I had the privilege of teaching "Understanding Reverse
Mortgages" to convention attendees. This is a four-hour course
designed to give a learner some sense of what reverse mortgages are
all about. Less than 10 percent of the attendees had experience.
What does that tell you? It is a positive development to see more
brokers seeking knowledge about this great niche.
One learner asked me a question that—believe it or
not—I do not recall ever being asked by a Mortgage Broker.
After listening to me describe theory and the demographic for the
first three hours, he queried, "Nelson, you have certainly made a
great case for why reverse mortgages are wonderful. But, somewhere,
there must be some bad news. What can you tell us about the
negative aspects of a reverse mortgage?"
Man, I had to think about that one. You see, I really believe
through and through that these programs, especially the Home Equity
Conversion Mortgage, are doing good work for seniors all over
America. When originated by persons of honor and integrity, there
is no harm that flows from them—only good. Seniors who had
been consumed by worry find a new peace of mind.
They find a new sense of financial security. They have more
self-reliance. They demonstrate a renewed sense of self-worth. All
those thoughts flashed through my mind, as I thought of how to
answer him. Eventually, I said, "I honestly cannot think of any
time when I have seen a properly originated reverse mortgage fail
the senior and cause him harm."
That made me reflect on all those forward people who want to get
into this business. The traditional mortgage business is so vastly
different from my world. I am positive there are more things
different than alike. Should this cause us to worry? Well, I'd only
worry if they got into our business primarily for the money. People
sometimes do questionable things on the way to their next paycheck.
If you are the kind of Mortgage Broker who can't see past your next
paycheck, please leave seniors alone. This is not a "quick close,
then churn" kind of business. This is a caring business. You must
be driven by a desire to help and change your client's life for the
better. The money must be secondary. If you originate with this
kind of attitude, you will be successful, because your referrals
will fly through the roof.
Here's a nugget for you forward guys and gals who are looking at
becoming reverse mortgage originators. Next to inquiries about
commission split, the second most-asked question is usually how to
market to seniors. Here it is, sorted in order of priority and
based on a ton of experience:
1. "Personal" referrals;
2. "Expert advisor" referrals;
3. Very carefully done direct mailing, with none of the usual
clutter or bloviation (create inbound telemarketing by using
4. Community newspaper ads with a very clear, quick message;
5. Once you have established a reputation, seminars and joint
events with financial industry service providers; and
6. Eventually radio (this is a real skill; every detail
If you are a seasoned reverse mortgage originator, get ready for
the changes that will come with all these "forward people," because
the stampede is coming now and you will be competing with them
Nelson A. Locke, CRML is a past president of the Florida
Association of Mortgage Brokers, a founding member of the National
Reverse Mortgage Lenders Association, the founder of the
Association of Reverse Mortgage Specialists Inc. and CEO of Value
Financial Mortgage Services Inc. He hosts the public television
program "Ask Mr. Mortgage," discusses reverse mortgages daily on AM
radio and designed the FAMB training course "Understanding Reverse
Mortgages." He may be reached at (800) 760-5363 or e-mail [email protected]