Reverse Mortgage Certifications: Raising the Bar

As government activism further ramps up and the mortgage world feels the impact, lawmakers are increasing demands on loan purveyors of all stripes to be taught, tested and tagged. “The big moment for all of us is the SAFE Act,” says Ken Markison, assistant vice-president and regulatory counsel, Mortgage Bankers Association, referring to the Secure and Fair Enforcement Mortgage Licensing Act (Act). “It’s about requiring originator licensing and registration for both federal and state originators (individuals),” says Markison, noting that 36 states have initiated some kind of new regulatory restrictions.

In an effort to blunt and head off some of that regulatory pressure, the National Reverse Mortgage Lenders Association says it spent $300,000 to develop a new industry designation called the Certified Reverse Mortgage Professional – Loan Originator. Before they can sit for a 140-question exam that leads to earning the designation, candidates must have a minimum of two years originating reverse mortgages (and 50 loans closed), 12 hours of continuing education and submit to a background check. The first group of candidates is expected to earn the designation in 2010.

“As we make this designation known,” explains Sherry B. Apanay, senior vice-president, Generation Mortgage Company and a member of NRMLA’s Independent Certification Committee, “seniors can seek out those with the designation and expect the most knowledgeable and ethical service from [them].”

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“There is a need for certification,” says Shannon Hicks, vice-president of product development, Reverse Fortunes.com, Redding, Calif., “because the bar of entry [has been] really low. There’s no real requirement for even HUD counselors to pass a background check,” he maintains. Hicks says there is a need for certification now “because of the increased patchwork of ‘do-gooder’ legislation that will be harmful to the industry. It’s almost too late, to be honest,” he adds glumly, reckoning that the swell of new regulations is really a backlash. “We’re inheriting the pent-up anger and frustration of the subprime industry. My biggest gripe with lawmakers is that they are masters of unintended consequences [and] most of them have no experience in finance or lending.”

But, even though “the reverse mortgage business has had somewhat of a tainted past,” argues New York attorney Neil Garfinkel, “today’s product is terrific, with lots of protections. The industry today,” he adds, “is concerned about its image.”

Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade, currently specializing in the reverse mortgage sector. He can be reached at nmorse@morsecommunications.com

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  • Creating the gold standard in a reverse mortgage credential is significant to the growth of the industry but is, in fact, long overdue. Like Mr. Hicks, I think the greatest good this credential could have done is in the past (probably 2006 and 2007) when legislation regarding origination was beginning to be formulated. But still this credential is needed and needed sooner rather than later.

    While I support NRMLA wholeheartedly, it seems that the NRMLA Board is once again less proactive than reactive. Some have stated that the credential concept was actively being pursued before 2005. It seems that internal Board squabbling over the type of credential it should be, whether it should be entry level, etc. has unnecessarily held up the final product. Mr. Bell has been actively promoting its creation for some time. It is too bad his words were not heeded earlier.

    While it is good to know the threshold requirements, it is also important to know its costs, what the background check will consist of, and what its renewal requirements will be. The exam should be difficult and not constructed in a way that makes its grading subjective. Hearing the term “continuing education” apply to the minimum education requirement is odd. In most professions “continuing education” applies to the education needed to maintain (“continue holding”) the credential not to qualify for it.

    I find the comment of Ms. Apanay very interesting: “As we make this designation known, seniors can seek out those with the designation….” As important as its creation so is its promotion. Few seniors I speak with have any idea what NRMLA is or stands for. How will they ever know about this credential? I personally am not as interested in how much money was spent in creating the credential as in hearing how much is being dedicated to promoting it and how quickly that will take place. Since the industry is marketing driven, I am assuming the plan will be a well thought out and executed one. Is it realistic to expect that the majority of seniors and their advisors will have sufficient information to perceive the value in the credential so that they “seek out” credential holders by 2012, 2015, 2020, or when? Since Ms. Apanay has been involved in the credential process for some time and she is a member of its governing body, the ICC, maybe she can illuminate us.

    I hope to see high professional standards enforced against holders with a strong means in the ICC to discipline those holders who violate those standards. I also hope we hear how the credential will be promoted in some detail. It would be tragic if the credential program were nothing more than an interesting curiosity in the history of NMRLA or as one RMD reader put it – “a wall size credential suitable for hanging, a lapel pin, and your very own personal decoder ring….”

  • I am wondering what type of continuing ed would be required…traditional mortgage CE often does not address the needs or concerns that we face in the “reverse” world. Would education in aging and gerontology issues be accepted? I agree that most seniors are looking for a person they can trust, and there are many designations floating around requiring translations even to those in the industry.

    While I think the Reverse Mortgage Industry does have some work to do, I do not know that this is the solution. Again, the man in the field does not seem to have a place at the table in this discussion.

  • How can you originate loans if you use NRMLA plan. Two years or 50 loans. When I started originating rm, i studied and learned the program with no experience, and knew more about them then alot of people that had been offering rm for years. Having that type of plans only BLOCKS out new people.

  • Lets really look at the product we sell. If you have a background in forward mortgages, we all know reverses are simple. There is nothing hard about them. A special RM certification???? If I were a senior, I would prefer to work with a CPA, or someone with a similar financial credential. Lets up the education requirements, and require an accounting or finance degree with a professional designation, CPA, CIA, CFE, etc.. Reverse mortgages should not be classified as a typical mortgage product. They should only be in the hands of ethical professions regulated by more than a group from the tainted mortgage business. Now that would be true protection for our seniors!!

  • Pat,

    Your intentions are good wanting knowledgeable and professional reverse mortgage originators, but a professional degree as a requirement? Wow.

    What’s ironic is some of the more knowledgeable originators came from the financial services industry with financial professional designations. These folks are often painted as suspect because of their insurance license.

    I would disagree with your point suggesting we require a specific four-year degree and/or professional designation. This would raise the bar, but to the point where many currently originating who are good and ethical would be left out in the cold.

    I think the CRMP with the essential points taught in the CSA would be of great benefit to our industry.

  • The life insurance industry has had a similar designation for years (CLU – Chartered Life Underwriter)yet the vast majority of life insurance is sold by non designated agents. NRMLA should spend it’s money on getting the word out to the senior population that the HECM program does not “steal” their home.

  • Yes we should all have a professional designation that correctly reflects our knowledgeable and ethical approach to the business. Originators that have conducted their business in this fashion are the ones that want the designation, because it validates how we approach our profession. Ever since I entered the mortgage business in 1983, there has been such a low/ lack of standards for becoming or continuing as an originator. If there had been some minimum designation/ education/ continuing education requirements, a percentage of the bad operators would have been deterred from entering lending in general, thereby keeping them out of the RM business as well. There are no teeth in the existing regulations to keep the bad apples out of the basket. Tough area to regulate.
    I will continue to sleep well knowing that I am one of the good guys. Good discussion folks.

  • I have been assisting seniors with reverse mtges for the last 5 years & I agree that a lot of subprime lo’s have jumped on board. Hopefully with new licensing being required in several states, which includes finger printing & background checks,these “boiler room lo’s” will be excluded from our industry.

    In responding to Pat’s suggestion that reverse lo’s have a professional designation–he must be a CPA! How ridiculous to think that only a “professional” designation would ensure an honest & ethical reverse lo! Ever heard of accounting fraud(Enron, Bernie Madoff’s CPA & others)? We have enough licensing in place.

  • Ms. Apany’s comment “seniors can seek out those with the designation and expect the most knowledgeable and ethical service from [them].” is more than a little self-serving. It implies that there are not others in this business who are also knowledgeable and ethical. In my opinion before anything is done about yet another “requirement” or “certification” or “licensing” NRMLA needs to stand up and kick out members violating their own code of ethics. We don’t need a proprietary certification program – we need to rid the business of dishonest people.

  • If the question is ethics, no amount of testing or degrees will be of any help. As for background checks…sure…but as a starter perhaps members of Congress should be the first to submit to those.

  • I haven’t heard much about qualifications related to understanding the people we’re trying to help, like becoming a CSA (Certified Senior Advisor). Also, big brother shouldn’t forget the Seniors they’re trying to protect. Interest rates and costs are too high. What happened to the HECM 100 as the government was driving down regular interest rates?

  • Help me understand the fairness of the NRMLA cert. If I started originating reverse mortgages and became a member of NRMLA in Jan 09 I am not qualified to take the test because of the two year/50 loan closed requirement. Seems very unfair. Why not allow everyone to test and pass background check?

  • The NRMLA designation would just be another way for them to squeeze more money out of originators. I have been doing reverses for 7 years and not once had a client ask about my credentials or schooling. Borrowers just want to deal with a professional and knowledgable loan officer. We all know the crooks figure out a way to beat the system and this designation would just be another angle for crooks to work.

  • I agree with Gene that 2 years in the industry and 50 loans closed may seem to be a little harsh as a requirement BEFORE the test can be taken and a background check done. I would point out that a test and background check and a small amount of coursework are required before a person is licensed to make their first sale of real estate in the state of California. However, to be a licensed broker, coursework and experience are required as well as extensive testing. Can the designation be done incrementally or has that been discussed and discarded as unworkable?

  • Oh Mr. Critic…..
    It seems you might need a lesson in humility! I cannot respect the fact that you chose to take my post and turn it into a non-sensical rant by you about me, and to make it personal, but here we are.

    I’ll address your points:
    – Google any of the celebs you mentioned and click on images. These are non protected, non copyrighted images.

    – $40 vs. $125 for the same piece of paper that is required to do the loan. I look out for the expenses of my seniors, not a guy like you who wants to use words like “baiting” to characterize one of the top reverse mortgage professionals in the country….

    – I NEVER STATED that I did not think that I NRMLA certification was needed, yet you blabbed on about that….

    -For the record, I started in the Reverse world with Wells Fargo, known for the best training in the country. Try six months , not 8 hours.
    If you’d like to do some further research on your “Kevin Reichard Project”, check with the owners and/or divisional / regional managers throughout the SE. They can all tell you who I am and what I do.

    – I could care less about your personal confidence in me. You hide behind an alias. I don’t know who you are , therefore, your confidence, opinions, and constant negative take on everything you post is irrelevant.

    – DO you have a website that has no “call to action”?!? Is this what you recommend? Of course I promote myself, and then step up to the plate and prove it, leaving it to the senior customer to choose who they work with.

    – Lastly, the bottom line is this. I am one of the many who actually pull in to a driveway and care about the seniors and educating them properly over a paycheck. Next time, , Mr Critic, do your reserach a bit further. I guess ever group needs a bully, but know that in this group, some of us will call you out if prompted.

  • Gentlemen! Gentlemen!

    What’s in a name? A cabbage by any other name would still smell as rotten. I don’t care what names are used. Calling one another out is futile and unhelpful. And no, I’m not your mother or your keeper. I just want to see some helpful insights posted instead of petty squabbling.

    Do we want input with NRMLA about the new designation, or are we content sparring with one another while the state and federal governments slice and dice our little corner of the mortgage industry?

  • WSB Mortgage Services, Inc. will give you a Certified Reverse Mortgage Advisor™ (CRMA™) designation for $699.00! ‘Get Reverse Mortgage Certified Today, It’s Easy!’

    If you’re a senior citizen and figure you have less than ten years to go, the ‘Association of Reverse Mortgage Specialists, Inc.’ may be a cheaper way to go. Nelson Locke will give you a ‘RMS Certificate’ for $197.00 plus $49.00 per year.

    The NRMLA program will be fully accredited. It is not a dog catcher’s exam. Hopefully seniors will recognize the difference.

    Kevin — “The lady doth protest too much.” It looks like you paid your $699 so you may as well make hay with it.

  • I see nothing wrong in pointing out to someone with experience in the business that his website is misleading at best.

    To the greater point, I think the only value a NRMLA certification will have is to keep the lawmakers from killing off brokers, this program, or both. This will only work if the designation is challenging and there are provisions to kick out the unethical predators. Who will enforce this? NRMLA?

    There are only a few designations that register with the general public. CPA is an example. Many with difficult and demanding course work required like CFP are mostly unknown by the general public. NRMLAs’ will be unknown as well.

  • (Admin: I am not in the RM business, but I am in the financial services business. If you prefer that I keep my thoughts to my self in the future, please advise.)

    Some random thoughts on designations:
    (1)Too bad there isn’t an “Honesty” designation (that works). It would have helped avoid our current global economic mess.
    (2) After I passed the license exam, my boss said “do you want to be just a salesman or do you want to be a professional, are you serious about helping people with their financial problems?” So, I studied part-time for four years for my first designation and I did it for MY own self esteem.
    (3) I felt that I would feel better advising clients with as much knowledge AND with other professionals as
    back-up resources, and they, clients and other professionals, would be more comfortable with me knowing that I had “put in the time” in my chosen field.
    (4) We all know, or have heard of, convicted crooks with or without a designation. BUT, I THINK A DESIGNATION DOES WEED OUT SOME CROOKS (especially the ones in for a quick hit and those with a shorter attention span).
    (5) It took me another four years for my second designation, which I again did for myself. Now I felt even more wary of screwing up and hurting a client.
    (6) As others have stated, cleaning up ones own house, background checks and comprehensive initial licensing requirements, would be great and a possible faster, easier first step prior to a designation program, but not a substitute for one.
    (7)This is a slippery slope last statement; I’m sure some will disagree with my own biased observation (I have mostly been in the field, not at the “home office”.) Many corporate problems are caused or exacerbated by:
    Short-sighted management controls and attitudes, at some, or all, levels from the very top to the street supervisory level. All levels should strive to minimize these bad corporate habits: “Looking the other way”, “turning a blind eye”, using pressure to force inappropriate sales, lax or non-existent sales suitability monitoring procedures (I sure some of you can you can add many more). Leading by example from the top down I feel is the best solution. Yes, I know there will always be some bad apples, but fewer of them and not much of a systemic risk to the whole organization.
    (8) I don’t think the real bad apples give a hoot about designations, don’t read this forum and they probably would laugh at some of you attacking each other on a personal level.
    I think most you really do care about doing the right thing for your client (the seniors AND their heirs.

    I wish you all well, I think RMs are great planning tools for some folks.

  • dduck,

    Overall, I agree with your assessment. It comes from experience and having a strong sense of self respect, professional pride, and not taking the easier road.

    You see RMs as few others, a great planning tool for some. I see it as a great income tax planning tool for some. I wish others in the financial industry had your insight. Too bad so many only know it as a loan of last resort.

    Good job and great insight!!! Thanks once again for your comments.

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