Everyday I read articles about how we're trying to differentiate between Reverse Mortgage and Insurance Origination, because the two of them combined seem to lead to trouble, and then something like this happens. It's not the first time though ... just another insurance company (ie: Genworth, Metlife) creating another "strategic" alliance.

It's kinda confusing.

Isn't HUD suppose to be releasing a Mortgagee letter that clearly draws a line between the two disciplines?

"(LTC Global) is an independent marketer of insurance and financial products to seniors with emphasis on Long Term Care insurance, Medicare insurance products, and most recently reverse mortgages."

LTC's target client -- the senior market. The rules are very specific…no cross-selling, but AFTER a RM is in place, even by a day, its perfectly legal to market to these same customers of parent company. Is it legal to sell/share leads between divisions and still be within NRMLA and HUD rules?

If it walks like a duck, quacks like a duck etc. it's suspiciously close to a fine line of impropriety or am I missing something?

Personally I don't see a problem with a client purchasing LTCI with RM proceeds. As long as the insurance is appropriate for the client - of course. I feel strongly that the regulators are doing, not only the senior a disservice by not allowing LTCI being purchased along with an RM loan, but also the nation's financial health.

I say; "why not let the house protect your house (and all your assets)". The RM allow this when one funds LTCI with RM proceeds.

I personally see LTCI prospects and Reverse Mortgage prospects as two separate groups. The average age of LTCI client is 57/58 while the average age for a Reverse Mortgage client is 73/74.

LTCI could be very expensive for a 74 year old with pre-existing medical conditions!

There certainly isn't anything wrong with a Genworth or MetLife getting in the business of Reverse Mortgages and it doesn't necessarily mean or we shouldn't assume that they are going after these client (average age 74) to sell them more products. They are simply adding to their product line and covering more needs.

Personally, and professionally, I think most people (yes I own what I sold) should have LTCI, even before they need a RM. To say that because a senior (many LTCIs are being issued to people in their 50s) is buying an LTCI after he does an RM is ludicrous. Either you need it, or you don't. Louise was talking about a man who had an expense of $7,000 a month for his LTC needs, as an example. I'M HOLLERING AT YOU regulators and lawmakers-We are all out to help seniors not screw them!

I have been originating HECMs in California for over 5 years and can recall when a reverse mortgage application package included an authorization form completed and signed by the senior homeowner which instructed the HECM lender to pay monthly payments to a LTCi firm. As one of a few Certified Senior Advisors (CSAs) specializing in HECMs in my area, I received a fair amount of referrals from local CSAs who knew that I would follow the SCSA's Code of Conduct in my dealings with their clients. Working in concert with other CSAs,we were able to help several hundred senior homeowners achieve peace of mind because they knew that they could remain in their home and would receive in home care in their later years which was paid for via LTCi insurance.

However,because of dishonest insurance agents in Northern California who took advantage of homeowners who spoke limited English and sold them inappropriate annuities, the simplicity of the above mentioned professional network approach which was for the benefit of the client has now become more complicated. Today,even though I am a fluent bilingual (English/Spanish)I am required to inform a homeowner who has a Spanish language preference that they must engage an interpreter (3rd party) to be present during my reverse mortgage application interview and that they must wait 30 days after funding of the reverse mortgage before requesting that monthly payments be made to an insurance firm. This creates distrust at the onset and as a result, some Hispanic homeowners decline moving forward. It is well known that Hispanic senior homeowners are severly underserved when it comes to reverse mortgages and needed worthwhile insurance products.

I look forward to the day when perhaps, compliance will mean that licensed /certified reverse mortgage and insurance professionals will be "required" to make a joint visit with a client to fully explain the benefits of using their home equity and LTCi to avoid having to go to state run facility thereby accelerating the demise of MediCal.

Hey Corick!

I may be mistaken, but isn't the California legislature currently either looking to (may have already in face) pass some corrections about the foreign language issue? Does anyone have an update or clarification about that?

Corick

Glad to hear of appropriate sales, for a change; it's too bad the crooks screwed things up, again.
It would be nice if some of those people that bought LTCI because of your efforts would write a letter to you if they have utilized the LTCI for helping them stay in their homes rather than going into a facility and possibly triggering a foreclosure. If I understand it correctly, that would only be a year.
BTW: the average stay in a nursing home is way over a year; hasn't any one heard Medicare and Medicaid/MediCal are going broke.

There is no "one shoe fits all" scenario. ALL options available for the betterment of the senior homeowner need to be invaluated and incorporated.

It is my opinion that, as a RMS, we should not be involved in the sale or purchase of LTCI or any other financial/insuarnce products. I beleive that sets us up for moral and ethical scrutiny. Who in our industry needs any more scrutiny?

I do believe it is our obligation to avail our knowledge and expertise to professionals in other areas of financial/estate planning. No cross-selling and no cross-compensating. Thus we can be a part of the solution, not the problem.