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Ginnie Mae applauds the creation of Reverse Mortgage Market Index

Nov 19, 2007

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 outbound mailing); 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 matters). 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 soon. 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].
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