Local New York Media Outlet Runs Reverse Mortgage Feature

Local media outlet NY1 ran a reverse mortgage feature last week, sitting down with Jason Levy, chief executive officer of Guardian First Funding.

“An ideal candidate is someone who is having a hard time making ends meet, so to speak, but has the equity in their home,” says Levy. “It’s not a coincidence that that equity is there. They built it over time and that’s an act of success.”

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A previous version of the interview had Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, give his two cents on the costs associated with reverse mortgages.

“They can charge up to 6 percent in origination fees, there’s another 6 percent in mortgage insurance premium. So for a $200,000 reverse mortgage, that’s $24,000 in fees,” says Zinner. “You may borrow $120,000 through a reverse mortgage and by the time that senior passes away, there may be $250,000 owed if you add in the fees and the interest.”

Levy told RMD the company contacted NY1 and it removed the Zinner segment. Check out the final version at the link below.

How A Reverse Mortgage Can Help Or Harm An Older Homeowner

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  • It was less than inspiring to hear Jason; however, that is not to say his statements were not helpful or honest. Unfortunately it is consistent with the view he expressed in a RMD article posted on August 18th about HECM Savers. u201cu2018The product might motivate consumers that were on the fence due to cost conscious concerns,u2019 said Levy, u2018but I donu2019t see it causing a shift in our customer.u2019u201d Earlier in that article Admin noted that he u201cu2026still sees the HECM product serving the need of borrowers who need to pay off larger mortgage balance.u201drnrnThe focus in this comment is not on the errors made in the short video but rather the mediocre reception the HECM Saver has received to date by many industry leaders. To some it is a bold move forward by HUD to provide products to a wider spectrum of seniors while others want to relegate it to nothing more than another minor product like HECMs for purchase.rnrnWhile I refute the position Jason takes and the vision he promotes, I deeply appreciate his honesty. While it is expected many originators are reluctant to change, it is very disappointing to see that attitude expressed by industry leaders. Few babies are actually beautiful at birth but with love, care, and encouragement they grow and even blossom. While my grandchildren are very young, what excites me is not with them remaining at the stage of life they are but rather with being involved in their maturing.rnrnWhile Jason may be very right, our leaders need to rise to the occasion and give this product line the chance it deserves. Many are gun shy due to the over enthusiastic push of proprietary products just a few years ago. It seemed like with each passing day, the predictions about those products got wilder and wilder until their quick decline and total collapse.rnrnIf we are going to reach the broader senior market, leaders need to pick up the HECM Saver banner and move it forward. It will require their enthusiasm, support, and push. Yes, it will even require marketing dollar subsidies and an increased marketing budget. Many will claim this is not the right time, but when is the right time? Either this product will be embraced as a game changer or seen as a pretender that never got the support needed to be a game changer — if it was actually one at all. rn

  • Overall the message was positive and fairly even handed. It was surprising to hear that our existing origination fee rate is 3% up to $6,000.rnrnIt was troubling to hear and read: “It gives that senior the discretionary income that they need to live a much better lifestyle.” While that statement might be expected from the reporter, it is not one that should have been made by Mr. Levy. Discretionary income does not include loan proceeds. rnrnOf course nervousness can always distort a message. It causes us to rely on old habits and messages which die hard. As our industry makes a significant turn, it is important our message is stellar and accurate. While one could argue Mr. Levy made a stellar presentation, it was not accurate.rn

  • I for one appreciate Jason’s candor in discussing the honest applications of the HECM product. While I agree with the desire to grow into the next phase of the reverse mortgage as a “game changer”, I am also more secure in knowing that the leaders of this industry are realistic in their approach to making that growth true and organic. Now more than ever, it is important to deal with our consumer base in the most direct and straightforward manner possible. Jason spends a lot of time in the trenches, and I feel like he brings a sensible approach to the table. n A senior is not interested in the technical definition of discretionary income, they are interested in knowing that using their loan proceeds to pay off a high mortgage balance allows their income to be used at their discretion. More important is the statement of a reverse mortgage as an act of success. We need to constantly drive home that idea, as a unified industry, and that is where Jason’s leadership shows.

    • Evanste76,rnrnYou claim: u201cMore important is the statement of a reverse mortgage as an act of success.u201d Jason never said that in the interview. Please point that out!rnrnThe article and interview state: “Jason Levy, the chief executive officer of Guardian First Funding, says a reverse mortgage is not a sign of failure.” To not be a sign of failure is much different than to be an act of success.rnrnThe act is success is having built up equity. Here is what Jason actually said according to the interview and article: “‘It’s not a coincidence that that equity is there. They built it over time and that’s an act of success.'”rnrnAfter claiming that Jason said a reverse mortgage is a sign of success you conclude: u201cWe need to constantly drive home that idea, as a unified industry, and that is where Jason’s leadership shows.u201d Now you are taking a falsehood and raising it to the level of wanting to make it a standard and slogan for the industry. How silly and ridiculous. You got caught in your own emotions.rnrnBe careful what you tell seniors. Never once in this article did Jason Levy say what you claim. Please stop misquoting and attributing words to others things you want to say. Say them on your own or don’t say them at all. rn

    • Evanste76,rnrnYou have said a whole lot in the following run on sentence: u201cA senior is not interested in the technical definition of discretionary income, they are interested in knowing that using their loan proceeds to pay off a high mortgage balance allows their income to be used at their discretion.u201d Since it seems directed at my comment, I am responding and will start with the full paragraph where Mr. Levy made the claim that a reverse mortgage provides discretionary income.rnrn”u2018Is your priority to have more equity at the end of the day but struggle to heat yourself in the winter or have air conditioning in the summer?u2019 says Levy u2018It gives that senior the discretionary income that they need to live a much better lifestyle.u2019″rnrnIn context, Mr. Levy was discussing the ability of the senior to take care of what most of us see to be essentials. Is this situation just the plight of seniors with high mortgage balances? Many senior homeowners with no existing mortgage lack the cash to pay for needed utilities. We have provided reverse mortgages to seniors in exactly that situation. We have also provided reverse mortgages to seniors with sufficient discretionary income to care for those needs who just wanted to exchange their existing u201chigh balanceu201d mortgage for a reverse mortgage. rnrnYou have absolutely no idea who may or may not see or read the report but it will be seen by far more people than just seniors with high balance mortgages. What Mr. Levy states is just plain wrong and a misstatement of fact.rnrnThe goal of my comment was and is not to correct what seniors think. It is to correct what the industry claims a reverse mortgage can do. While it is true that reverse mortgage u201cloan proceedsu201d can be used to decrease debts which have monthly payments, the impact to discretionary income is only indirect. A reverse mortgage alone does not give THAT u201csenior the discretionary incomeu2026.u201d The specific senior in context is one who is cash short with no qualifier as to any existing mortgage.rnrnPersonally your comment is insulting. In less than four months I will be 62 with a high balance mortgage. I do not expect my personal interest in the technical definition of discretionary income to die by simply turning age 62. I also know some who happen to be over 62 and are just as concerned about the misuse of financial terms like discretionary income by our industry. It is not just technical; it is a practice our industry needs to terminate. Your statements and the attitude expressed in them are an example of why so many CPAs and attorneys refuse to listen to why reverse mortgages may be helpful to their clients. Not even CPAs can read your mind; we can only evaluate and respond to what is presented to us. Too many times the spoken (and even in print) information we receive is full of myths, incorrect and inaccurate claims, misstatements of fact, and misinformation without adequate explanations. Quite frankly it can be very disappointing, just like the statement of Mr. Levy.rn

    • Evanste76,rnrnSome are content with the status quo. Personally, I wish the market was as full of proprietary reverse mortgages as we heard predicted less than four years ago. I fully support that vision. Unfortunately, they were the right products delivered at the wrong time — quite frankly too late.rnrnCould this be the wrong time for the HECM Saver? Yes, it could be; that is realistic. But as an industry leader simply being professorial in comments about the opportunity immediately before us is the place of U.S. Presidents and junior college instructors, not business leaders like Jason. Am I trying to provoke business leaders in our industry to action? You bet. Jason has a lot to offer; I hate seeing it bottled up.rnrnBusiness decision making is all about risk taking and risk acceptance. It has been attributed to Warren Buffet that he just hopes that more of his major business decisions pan out to be right than wrong. I have heard many successful business leaders make similar statements.rnrnIt seems you prefer “secure” over immediate growth and market penetration. That is OK. I find u201csecureu201d with u201cgrowth true and organicu201d throughout every graveyard I have visited. I certainly hope the industry is not headed there.rnrnIf this product line is wrong for expansion, letu2019s hear why so that we can get it modified to make it work. To simply say that one expects the new product line will only be marginally helpful with no reason why seems more safe than visionary. I for one want more visionaries speaking in the industry. We need help in our direction and growth not just the voice of philosophical reasoning.rn rn

  • While the Critic may assume he “refuted” Jason Levy’s affirmations the reality of Jason Levy’s views stand. The views the Critic considered his refutation actually seem little more than wishful thinking.

    • Acghiotto,rnrnNEWS u2013 as of this morning there was no HECM Saver program. The very earliest HUD has indicated it will start is October 4th, 2010. rnrnSo how is what JASON said “reality?” These are plain and simple predictions by all parties based on nonbinding HUD explanations, NOT reality. rnrnI would rather be delivering wishful thinking than declaring Jason’s view IS the reality. Although I do not believe this is true of Jason, I believe you are saying that you want it dead on arrival. But why? rnrnIt is true that I believe this product could be a game changer but not if the vast majority in the industry are as pessimistically aligned against it as YOU. I do NOT believe that of Jason. I am attempting to enlist his overt and personal support for exploring the use of this product with more affluent seniors (and their advisors) than our typical borrower. rnrnIf our industry leaders are less than enthusiastic about its potential, in the current market our sales efforts on HECM Savers will mean little or nothing. We need their enthusiastic support and push.rn

  • it will be my pleasure to discuss these concerns with those that have been critics as well as cynics at the next nrmla show in novemberrnim pretty confident they will be therernlets use this forum to support the industry united not dividedrn

    • Jlevy,rnrnAre we to assume you are Jason Levy? rnrnYou state: u201cu2026it will be my pleasure to discuss these concerns with those that have been critics as well as cynics at the next nrmla show in Novemberu2026.u201d It seems in part you are addressing your comment to me. Why? While I genuinely appreciate the gesture, I just have no earthly idea what you want to discuss. rnrnMy only remark in this thread was a strong rebuke to a comment of a self proclaimed follower of yours; nothing was addressed to or at you. The follower proclaimed: u201cMore important is the statement of a reverse mortgage as an act of success. We need to constantly drive home that idea, as a unified industry, and that is where Jason’s leadership shows.u201drnrnIt is surprising how closely your appeal, u201cu2026lets use this forum to support the industry united not dividedu2026u201d, aligns with the statement of the self proclaimed follower. I hope it is not your intent that we are unified under the misquotation of that alleged follower. Forgive me but I for one want no part in her misquotation. I personally do not choose to align myself or want to be u201cunifiedu201d with people who intentionally do such things.rn rnI agree with the quotes attributed to you in the article particularly that a reverse mortgage is not a sign of failure and that equity build-up is an act of success. Those are very good and healthy statements for seniors to hear. I really like those statements.rnrnWhat I do find bothering is that you fail to rebuke someone who lauds you. While others may feel comfortable driving the misquotation u201chomeu201d, I for one do not and will not!rnrnPerhaps we can be unified in proclaiming that members of our industry should not be involved in making misquotations. I strongly support and am in unity in that position. If that is not an ethical position of NRMLA, it should be. Can we at least agree on that much?rn

      • no need to assumernyes its jason levy, ive always posted my comments as who i amrni suggested meeting at nrmla so that i can meet those that will critique my every word with such conviction and i wouldnt have to wonder who they were.rnits funny how an interview that lasted over 45 minutes only aired 30 seconds, and those that credit me as being one of the industry leadersrnchoose to attack me anonymously rnwhy? rnwhy not simply call me or email me to discuss your concerns, i am very accesible and can be reached at jlevy@guardianfirst.comrni am a strong supporter of NRMLA, and i applaud all the efforts exerted by peter,marty ,darryll and the board.rnrni have read many comments posted on rmd by the cynicrnsome ive agreed with and some i havent but to attack because i disagreernseems sillyrnanywayrnplease continue to support the industry , and ill make sure to do the samernrnregardsrnrnjason levyrnceo

    • Mr. Levy,rnrnReading my comment and reply, in this thread I acknowledge that I am clearly a critic of one thing and only one thing you said. I believe it is very wrong to declare that reverse mortgages produce something they do not, particularly any form of income, discretionary or otherwise. I am sure many RMD readers have read my RMD articles exactly on this point. rnrnWhile I would be delighted to meet with you in New Orleans, unfortunately due to family and church matters, this will be the first NRMLA national convention I will miss since I first heard about them. On the other hand this may serve as an opportunity for the two of us to come together to discuss on RMD what it is our product is and what it can actually do for seniors.rnrnIt would be a delight to see members of our sales forces going out and being able to present to advisors like CPAs and attorneys how our products can solve the cash problems their older clients are facing more and more, like: rnrnu2022tWhy a reverse mortgage is not just a financial product of last resort. rnu2022tHow recourse debt can be replaced with nonrecourse and many times saving interest costs.rnu2022tHow reverse mortgages provide cash flow in retirement.rnu2022tHow younger seniors may be able to increase retirement contributions using a reverse mortgage with tremendous tax savings now and yet preserving the cash for the future.rnu2022tHow the HECM line of credit can be an effective nonrecourse replacement for a recourse business line of credit at substantially less cost than they are now paying.rnu2022tHow a HECM can help provide needed cash in rental activities.rnu2022tHow cash basis taxpayers can convert the accrued interest on a reverse mortgage into income tax deductions without paying one dime out of pocket.rnu2022tHow to protect a client at inception from the tax liabilities of a reverse mortgage foreclosure.rnu2022tHow their can clients maximize reverse mortgage home interest deductions.rnu2022tHow heirs can take advantage of interest deductions.rnu2022tHow proper tax elections can allow the deduction of interest currently against business and other income for accrual basis tax activities.rnrnI am not trying to make this a marketing attempt to seniors; that would be overkill. However, it is not overkill to their advisors. The presenter does not have to know the ins and outs. It is up to the advisors to get it right. All our sales forces need to do is to provide the overview on how it could work. While these ideas may not impact very CPA or attorney, there is enough here for them to realize they need to view our products in a new and different way.rnrnI cannot tell you how ignorant and biased tax professionals are in regard to our products. In part that is a failure not just of originators but perhaps more importantly those in this industry who could make a difference but for one reason or another fail.rnrnIf you are willing, this is something I would be interested in exploring with you. rn

  • Your right “Since there is no HECM Saver program in existence, it hardly seems worthwhile to labor over an issue that is simply an opinion’. Lighten up….life goes on.

  • One thing I do know is that Jason cares about seniors and does whats in their best interest. We can speculate about the parameters of the new product all day, but I don’t think that was the real importance of the piece. I think it is another way of making seniors more comfortable with the product and the idea of it, and trying to change the stigma that some have attached to the product as a loan for the needy. We all know the people that we help every day. Many are just like you and I. People should be proud of all they have accomplished and be given a great deal of credit for making it in these tough times. The reverse mortgage allows for them a better more stress free exisistence. I for one am glad that we have people that are working in the public eye to get information out to the senior community. At the end of the day we are all on the same team trying to help people realize the benefits of the reverse mortgage. Let’s all work together to make this the special product that it is.

    • reversebeliever, rnrnForgive me for being overly enthusiastic.rnrnI do not call many people a leader in our industry but Jason is clearly one of them. However, that does not mean I find his speaking in that report inspiring. The vast majority in this thread seem to — which is fine.rnrnWhile you make good points in his defense, my comment was clearly labeled for what it was. I make absolutely no apology for it. Good leaders take us in new directions which sometimes work and sometimes do not. Jason is normally such a leader but Jason is NOT by himself in this regard.rnrnWhile it was bewildering to hear how one leader after another sing the lauds of proprietary products throughout 2007, it is surprising how little those same leaders are speaking out today. Where is everyone?rnrnEven though I do not regard John Nixon as great of a speaker as some in our industry I fully support his leadership as to the HECM Saver. I appreciate his support and huge efforts in this regard. John rose high in my esteem due to the way he has personally latched onto this product line and attempted to make this available to all of us. In many ways I feel the same about Meg Burns, Peter Bell, and Colin Cushman. There are many others who have worked hard behind the scenes like Cheryl MacNally, Craig Corn, and Jeff Lewis.rnrnBut it is those who have spoken out for these products that I appreciate the most. It is hard to have sand kicked in your face the way those who have spoken out seem to be treated. This is something new that will not hurt the industry and it is not u201ccoolu201d to be neutral about it. Our leadership needs to be out in front of these products thanking HUD for getting them to us and driving us to increase our market penetration. rnrnIt is here I find Jason is less than stellar. Why, I do not know. You and his other defenders fail to explain this oddity. Perhaps worst of all, Jason wants to put off any discussion until close to two months from now. Quite frankly, I donu2019t get it. Do you? Please do not misunderstand; Jason is truly one of the good guys in this industry. While this is not about him as individual, it is about overall leadership in the industry of which he is one.rnrn

      • ill reach out to my friends at NRMLA and make sure they will understand that i fully support the hecm saver productrni also agree that those mentioned in this thread are true pioneersrnespecially peterrnrnrespectfully yoursrnJason levy

      • Jason,rnrnI have not doubted your committment to our industry but I really do not understand why there appears to be a lukewarm reception to the HECM Saver product by so many industry leaders. It is not just you. I genuinely appreciate the fact you spoke out in the way you did. I wish others would.rnrnFor years we have asked for a product like this and when it comes, it seems to come in with a loud thud. I agree with some that it would have been better if the HECM Saver would have provided the same proceeds as the HECM Standard but with a higher MIP annual rate than the HECM standard; however, I am just pleased HUD has done anything at all. rnrnEven though the HECM Saver may not be exactly what many of us wanted, it seems to be a very good alternative. I hope it is my perception about industry reception that is off. Remembering back to 2007-2008, somehow I just do not think so.rnrnMy call is not to you alone. If it was just you, I would not bother on a public forum. I would have reached out to you as an individual.rnrnYou are doing a great job. Keep up the good work.

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