HECM Saver is Almost 20% of MetLife’s Reverse Mortgage Volume

NewImage.jpgThe latest edition of Kiplinger hit newsstands and includes a new article on the HECM Saver.

Released earlier this year, the product allows borrowers to withdraw smaller amounts at a lower cost compared to the traditional HECM product.  Eric Declercq, vice-president of reverse-mortgage operations at MetLife Bank told the magazine, “the new Saver has virtually eliminated the upfront insurance premium.”

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The most interesting piece of news comes from Declercq, who said that the HECM Saver accounts for one out of five reverse-mortgage originations at MetLife Bank.  RMD reached out to MetLife and learned that HECM Saver volume has increased steadily since the roll out in October.

“This resulted from our preparing systems to handle the product well in advance of its being made available by HUD, and believe we were first to market,” Declercq told RMD.  “Lastly, we offer the product through retail, wholesale and correspondent lending channels, making it available to more consumers.”

According to figures provided to RMD, MetLife’s share of HECM Saver loans increased from 5% in October, to 8% in November, to 14% in December, to nearly one in five today.  After initial data from the Department of Housing and Urban Development showed less than spectacular HECM Saver endorsement numbers in November and December, the data from MetLife is an encouraging sign that consumers are responding well to the new product.

Declercq told RMD that consumers are finding the value proposition of the HECM Saver compelling and believes there could be additional room for growth.  “Although we would not pretend the ability to predict how much a share the market that HECM Saver will occupy, we do expect it to grow beyond current levels,” he said.

According to data from Reverse Market Insight, MetLife endorsed 3,875 reverse mortgages during 2010 and was the 3rd largest lender.

New Reverse Mortgage Hits the Market

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  • Some of the negativity about the Saver shows how little naysayers actually think through the length of the endorsement process. Most in the industry believe that if a FHA Case Number was assigned to an HECM loan application on October 1, 2010, one cannot reasonably expect it to be endorsed before February 1, 2011. Yet with nothing more than anecdotal evidence many originators have been ready to assign Savers to the same junk heaps as Edsel, Betamax, and the New Coke. While we get upset about how HECM program detractors overuse anecdotal evidence when condemning HECMs, why is it not the same when originators fall into the same anecdotal trap over Savers?

    Even very recently the Saver naysayers have had some interesting comments in and in response to the January 17th RMD article titled: “Rising rates and the impact on reverse mortgage proceeds.” With no objective evidence Cliff Auerswald, Bob LaFaye, and Raymond Denton seemed all but ready to declare Savers as a failed experiment but these three are certainly NOT by themselves. Only the comments of James Veale sounded the least bit positive; however, his comments seemed guarded but that could be because of a lack of objective evidence at that time to counter the less than glowing statements of the other three.

    The only objective evidence on the success of the product to date is the specific endorsement numbers recently released by HUD in the late morning of January 20, 2011; even with this limited objective evidence it is far too early to call Savers a resounding success. To have any endorsements on Savers this early in the new fiscal year is very, very encouraging. 94 endorsements in less than three months from the time that FHA Case Numbers could be first obtained (October 4, 2010) on this product is outstanding especially when HUD first introduced the Saver publicly on September 21, 2010 in Mortgagee Letter 2010-34. Yes, some will counter that HUD permitted conversion for HECMs with FHA Case Numbers assigned before October 4th to Savers but 94 is still impressive in less than 90 days. The program only had 157 endorsements for its entire first fiscal year (1990) and did not reach 1,000 endorsements for a single fiscal year until two full fiscal years later. Look at the slow start for HECMs for purchase.

    Congratulations to MetLife. MetLife shows it pays to be big. Having Craig Corn sit on the HUD Saver formulation team gave MetLife a competitive advantage but Jeff Lewis of Generation Mortgage, Cheryl MacNally at Wells, and John Nixon from B of A also sat on that same committee. I wonder how well the latter three are doing on their Saver endorsement and FHA Case Number assignment volume. The Met Life numbers are not just good; they are impressive despite how early we are in the life of the Saver product. It seems MetLife knows what it takes to promote this product and more importantly have done and are doing it.

    The three very experienced naysayers above illustrate the need for a new core of Saver originators; each of the three seems very knowledgeable about and experienced with Standards but each seems uncomfortable with Savers. Retraining alone may not overcome bias or the fundamental need for a sound, fundamental collegiate education in financial matters when it comes to marketing and promoting Savers in the current HECM origination environment.

    While this does not change my outlook on overall endorsement numbers for this fiscal year, it does cause pause as to the projected makeup of those numbers. While it still seems likely that Saver totals will be less than 5% of total endorsements for the current fiscal year even 2% of total fiscal year 2011 HECM endorsements would be an enormous feat for Savers for their first fiscal year of production especially when compared to the limited volume for HECMs for purchase over the last two fiscal years.

  • Some of the negativity about the Saver shows how little naysayers actually think through the length of the endorsement process. Most in the industry believe that if a FHA Case Number was assigned to an HECM loan application on October 1, 2010, one cannot reasonably expect it to be endorsed before February 1, 2011. Yet with nothing more than anecdotal evidence many originators have been ready to assign Savers to the same junk heaps as Edsel, Betamax, and the New Coke. While we get upset about how HECM program detractors overuse anecdotal evidence when condemning HECMs, why is it not the same when originators fall into the same anecdotal trap over Savers?

    Even very recently the Saver naysayers have had some interesting comments in and in response to the January 17th RMD article titled: “Rising rates and the impact on reverse mortgage proceeds.” With no objective evidence Cliff Auerswald, Bob LaFaye, and Raymond Denton seemed all but ready to declare Savers as a failed experiment but these three are certainly NOT by themselves. Only the comments of James Veale sounded the least bit positive; however, his comments seemed guarded but that could be because of a lack of objective evidence at that time to counter the less than glowing statements of the other three.

    The only objective evidence on the success of the product to date is the specific endorsement numbers recently released by HUD in the late morning of January 20, 2011; even with this limited objective evidence it is far too early to call Savers a resounding success. To have any endorsements on Savers this early in the new fiscal year is very, very encouraging. 94 endorsements in less than three months from the time that FHA Case Numbers could be first obtained (October 4, 2010) on this product is outstanding especially when HUD first introduced the Saver publicly on September 21, 2010 in Mortgagee Letter 2010-34. Yes, some will counter that HUD permitted conversion for HECMs with FHA Case Numbers assigned before October 4th to Savers but 94 is still impressive in less than 90 days. The program only had 157 endorsements for its entire first fiscal year (1990) and did not reach 1,000 endorsements for a single fiscal year until two full fiscal years later. Look at the slow start for HECMs for purchase.

    Congratulations to MetLife. MetLife shows it pays to be big. Having Craig Corn sit on the HUD Saver formulation team gave MetLife a competitive advantage but Jeff Lewis of Generation Mortgage, Cheryl MacNally at Wells, and John Nixon from B of A also sat on that same committee. I wonder how well the latter three are doing on their Saver endorsement and FHA Case Number assignment volume. The Met Life numbers are not just good; they are impressive despite how early we are in the life of the Saver product. It seems MetLife knows what it takes to promote this product and more importantly have done and are doing it.

    The three very experienced naysayers above illustrate the need for a new core of Saver originators; each of the three seems very knowledgeable about and experienced with Standards but each seems uncomfortable with Savers. Retraining alone may not overcome bias or the fundamental need for a sound, fundamental collegiate education in financial matters when it comes to marketing and promoting Savers in the current HECM origination environment.

    While this does not change my outlook on overall endorsement numbers for this fiscal year, it does cause pause as to the projected makeup of those numbers. While it still seems likely that Saver totals will be less than 5% of total endorsements for the current fiscal year even 2% of total fiscal year 2011 HECM endorsements would be an enormous feat for Savers for their first fiscal year of production especially when compared to the limited volume for HECMs for purchase over the last two fiscal years.

  • The Critic brings up a lot of very good points. I do want to applaud Craig Corn and the Met Life team, those are impressive numbers. met life must have found a way to market the product so it is appealing to the senior.

    I have said this before and I will say it again. I feel the HECM SAVER is an excellent nitch product. It serves as a product that will fill certain gaps. The draw back in today’s market with the SAVER is the high interest rate verses the other HECM products. Once the rate becomes in balance and the secondary market can get a conformable feel with its marketability, the Saver will be more attractive.

    I have a tendency to agree with the Critic in that the overall percentage of HECM endorsements for the SAVER in the current physical year will not exceed 5%, time will tell.

    I will say this, I am happy to have the product to sell, if anything it is a great tool to combat the high closing cost image of the reverse mortgage.

    Have a good day,

    John A. Smaldone

  • The Critic brings up a lot of very good points. I do want to applaud Craig Corn and the Met Life team, those are impressive numbers. met life must have found a way to market the product so it is appealing to the senior.

    I have said this before and I will say it again. I feel the HECM SAVER is an excellent nitch product. It serves as a product that will fill certain gaps. The draw back in today’s market with the SAVER is the high interest rate verses the other HECM products. Once the rate becomes in balance and the secondary market can get a conformable feel with its marketability, the Saver will be more attractive.

    I have a tendency to agree with the Critic in that the overall percentage of HECM endorsements for the SAVER in the current physical year will not exceed 5%, time will tell.

    I will say this, I am happy to have the product to sell, if anything it is a great tool to combat the high closing cost image of the reverse mortgage.

    Have a good day,

    John A. Smaldone

  • It is problematic to compare 1990 to 2011, for many reasons. I am looking at this from a more elemental level. How can MET claim 20%, if MET reported large numbers of origination and the Saver has only had 94 endorsements? Is it likely MET is holding off on insuring? The numbers don’t seem to work.

    Repsectfully, most originators I speak with share the opinions of Cliff Auerswald, Bob LaFaye, and Raymond Denton. Maybe we are all ready for retirement?

    • legal_eagle09,

      Your comment proves the point. Applications do not become endorsements overnight. It takes about four months. The first HECM Savers were offered on October 4, 2010. To see any endorsements this early is a good sign. Before attacking MetLife’s numbers, I suggest you wait until you see the May 2011 endorsement numbers for fiscal year-to-date totals on Savers. If they are stil 94 or even just 200, your criticism is well taken. I am taking MetLife at their word, but maybe you desire the title, The_Cynic.

      I support the current origination core in their feelings about the Saver. Most do a great job with the Standard. They should keep it up and cause that market segment to grow. More power to them. There is absolutely nothing wrong with thinking the worst of the Saver. However, that does not make those opinions accurate or correct.

      I just feel many originators are very wrong when it comes to the Saver and much of it has to do with not understanding their potential use by the more affluent in financial and cash management planning. To see growth with this product will require a concerted effort to educate trusted advisers on the unusual and unique aspects of the line of credit and tenure payouts.

    • legal_eagle09,

      Your comment proves the point. Applications do not become endorsements overnight. It takes about four months. The first HECM Savers were offered on October 4, 2010. To see any endorsements this early is a good sign. Before attacking MetLife’s numbers, I suggest you wait until you see the May 2011 endorsement numbers for fiscal year-to-date totals on Savers. If they are stil 94 or even just 200, your criticism is well taken. I am taking MetLife at their word, but maybe you desire the title, The_Cynic.

      I support the current origination core in their feelings about the Saver. Most do a great job with the Standard. They should keep it up and cause that market segment to grow. More power to them. There is absolutely nothing wrong with thinking the worst of the Saver. However, that does not make those opinions accurate or correct.

      I just feel many originators are very wrong when it comes to the Saver and much of it has to do with not understanding their potential use by the more affluent in financial and cash management planning. To see growth with this product will require a concerted effort to educate trusted advisers on the unusual and unique aspects of the line of credit and tenure payouts.

  • It is problematic to compare 1990 to 2011, for many reasons. I am looking at this from a more elemental level. How can MET claim 20%, if MET reported large numbers of origination and the Saver has only had 94 endorsements? Is it likely MET is holding off on insuring? The numbers don’t seem to work.

    Repsectfully, most originators I speak with share the opinions of Cliff Auerswald, Bob LaFaye, and Raymond Denton. Maybe we are all ready for retirement?

  • The HECM Saver reminds me of when I was working in the International Marketing Division of AST Computer. When I first got there, it was an “Engineering” driven company, as opposed to a “Marketing” driven company. We had some of the most brillant Engineers in the world, and they loved creating innovative stuff with the most recent technology. And since all 3 Founders were Engineers, the Engineering department was allowed to create new products without Marketing’s knowledge. When the new product was near completion, they let us know about it. Then it was up to us to try to figure out how to Market it. The technology was always really neat, so we sold some of it, but we’d have sold more if we were more prepared, and were included in the design phase. As the company grew, we turned around and became a “Marketing” driven company, and sold a lot more product a lot faster, and the company’s revenue exploded. That’s because us Marketing folks were able to research and understand exactly what consumers were asking for, and then tell Engineering to build it.

    HUD is the Engineering department. They’ve got the resources to create neat stuff. But it seems they didn’t spend much time with the Marketing department. Or, it they did, they didn’t listen to them throughly. The Saver program provides one of the components homeowners have been asking for – lower costs, and two components homeowners haven’t been asking for – reduced benefits and higher interest rates. It’s definately a “niche” product, because I haven’t quite figured out how to target that market.

    Having said that, I sold my first LIBOR Saver this weekend to my friends Mom. She wants a monthly check and wants to leave as much of a legacy as possible to her children. The Standard provided 1,762.44 and the Saver is $1,406.24. She wants the higher amount, but after 10 years the Saver leaves $310,152.00 in retained equity, while the Standard leaves $250,817.00. It was a tough decision for her.

    That’s a real niche market and 20% of my business doesn’t look like that. I’d love to see MetLife’s Marketing Plan. Or any other Marketing Plan that could help us all grow the Saver side of our business. It’d be beneficial for everyone.

    • The Rainmand did an excellent job in presenting his case on the SAVER. In fact, I must commend him on his analogy comparison, it was great and he hit the nail on the head. The SAVER is a nitch product, no doubt about that but it can be marketed to the right sources.

      Assume the interest rate was not a subject and it was the same as the other programs. To me this is the major hurdle to get over with the program at the present time. The lower principle limit is not a problem if the product is marketed to the right sector with a particular need. Rainmand indicated he is still searching for ways to market the product. I would like to offer a couple of Ideas I found very affective.

      The SAVER is great with someone who has a large amount of equity in their home. It works well for someone who does not need or want the amount of money they could get on a fixed standard. First question is, “Why wouldn’t any one want the max amount they can get”? That would be a good question! Lets look at an example so I can better answer that question.

      lets say you and your wife are 71 and 72 years of age. The two of you are doing fine, your cars are paid for, you have a very low balance on your mortgage and you have no debts. You also have good income coming in. Your both on social security, have a large pension as well as a large amount in annuities. Income is no problem for the both of you. Why would the SAVER be any good for these people, why even look at a reverse mortgage?

      Let me take all of you down the path of “The best years are retirement years”. This retired couple decide they want to travel a lot more. They start looking at motor homes, they find one that meets their needs and wants. The motor home is $249,000. The couple do not want to disturb their annuities or any liquid assets they have. However, these folks are smart enough to know their home could be working for them. They have a home valued at $725,000. They start checking out a reverse mortgage. The SAVER was attractive because the closing costs were low. They could get $328,000 on the SAVER. They have a balance of $44,600 on their home, the motor home costs $249,000 and the closing costs are $9,800, total comes to $303,400.

      Lets look at what these to people accomplished. First off, they paid their exciting mortgage off (More monthly income), closing costs were very low in comparison and it came out of the loan proceeds. The big item, the motor home, they bought it free and clear. This means no monthly payments on the motor home, no monthly payments on their mortgage and a much lower rate if they financed the motor home. Top it off, after accomplishing all of this, our seniors wound up with $24,600 in their pockets. Nice way to start your traveling life isn’t it!

      This was just one example, what about a boat or a second home. The nice thing about the motor home or a boat is you have dealers to market the program to. Boat dealers and RV dealers would love to have you come to their show room. It is a steady source of business for you. I can get into detail as to what can be done with the dealers but for now, you get the picture. Besides,
      the admin said my time is up.

      Their is a place for the HEM SAVER and you can be very creative with it. I hope you the marketing idea helped some of you out their. Again, nice job Rainmand!

      Thank you,

      John A. Smaldone

      • John,

        Raymond has a point if we all could sit around the table and work on creating new loan products BUT we can’t. Too may cooks spoil the broth.

        If this was one company, again Raymond has a point but an industry is made up of many companies not one. There is much to the success of the Saver at MetLife and one of them is not differentiating in compensation for Standards and Savers.

        Personally, I am thrilled the Saver was not confined by biased opinions of market acceptance or interest rate differentials. Time will provide answers no secondary market or mortgage expert could imagine. Maybe it could have been handled better but then again may be not.

        Few insurance and investment sales people understand the art of financial planning. I know they say they do and believe it but Raymond demonstrates how seldom that is true. There is a huge difference between the advice given by a fee based only CFP and a life insurance salesperson who will only earn compensation when a policy is sold.

      • John,

        Raymond has a point if we all could sit around the table and work on creating new loan products BUT we can’t. Too may cooks spoil the broth.

        If this was one company, again Raymond has a point but an industry is made up of many companies not one. There is much to the success of the Saver at MetLife and one of them is not differentiating in compensation for Standards and Savers.

        Personally, I am thrilled the Saver was not confined by biased opinions of market acceptance or interest rate differentials. Time will provide answers no secondary market or mortgage expert could imagine. Maybe it could have been handled better but then again may be not.

        Few insurance and investment sales people understand the art of financial planning. I know they say they do and believe it but Raymond demonstrates how seldom that is true. There is a huge difference between the advice given by a fee based only CFP and a life insurance salesperson who will only earn compensation when a policy is sold.

    • The Rainmand did an excellent job in presenting his case on the SAVER. In fact, I must commend him on his analogy comparison, it was great and he hit the nail on the head. The SAVER is a nitch product, no doubt about that but it can be marketed to the right sources.

      Assume the interest rate was not a subject and it was the same as the other programs. To me this is the major hurdle to get over with the program at the present time. The lower principle limit is not a problem if the product is marketed to the right sector with a particular need. Rainmand indicated he is still searching for ways to market the product. I would like to offer a couple of Ideas I found very affective.

      The SAVER is great with someone who has a large amount of equity in their home. It works well for someone who does not need or want the amount of money they could get on a fixed standard. First question is, “Why wouldn’t any one want the max amount they can get”? That would be a good question! Lets look at an example so I can better answer that question.

      lets say you and your wife are 71 and 72 years of age. The two of you are doing fine, your cars are paid for, you have a very low balance on your mortgage and you have no debts. You also have good income coming in. Your both on social security, have a large pension as well as a large amount in annuities. Income is no problem for the both of you. Why would the SAVER be any good for these people, why even look at a reverse mortgage?

      Let me take all of you down the path of “The best years are retirement years”. This retired couple decide they want to travel a lot more. They start looking at motor homes, they find one that meets their needs and wants. The motor home is $249,000. The couple do not want to disturb their annuities or any liquid assets they have. However, these folks are smart enough to know their home could be working for them. They have a home valued at $725,000. They start checking out a reverse mortgage. The SAVER was attractive because the closing costs were low. They could get $328,000 on the SAVER. They have a balance of $44,600 on their home, the motor home costs $249,000 and the closing costs are $9,800, total comes to $303,400.

      Lets look at what these to people accomplished. First off, they paid their exciting mortgage off (More monthly income), closing costs were very low in comparison and it came out of the loan proceeds. The big item, the motor home, they bought it free and clear. This means no monthly payments on the motor home, no monthly payments on their mortgage and a much lower rate if they financed the motor home. Top it off, after accomplishing all of this, our seniors wound up with $24,600 in their pockets. Nice way to start your traveling life isn’t it!

      This was just one example, what about a boat or a second home. The nice thing about the motor home or a boat is you have dealers to market the program to. Boat dealers and RV dealers would love to have you come to their show room. It is a steady source of business for you. I can get into detail as to what can be done with the dealers but for now, you get the picture. Besides,
      the admin said my time is up.

      Their is a place for the HEM SAVER and you can be very creative with it. I hope you the marketing idea helped some of you out their. Again, nice job Rainmand!

      Thank you,

      John A. Smaldone

    • Raymond,

      You demonstrate one of the biggest flaws in the amortization schedules we provide borrowers — relying on one scenario to reach significant financial decisions. If the note rate goes up and home values do not reach the levels shown on the schedule, will there be any “retained” equity???

      Yes, the relative relationship between the two amortization schedules you used has some skewed meaning but what happens if after 10 years it is shown that the balance due on the Standard was $70,000 greater than the value of the home at that time while the Saver was only $20,000. In either case, the non-recourse nature of the loan comes to the rescue but if the senior elected the Saver, she would have received less cash than she would have received with the Standard. As a result she and her estate would have been the losers.

      Be careful on this over reliance on the amortization schedules produced on lender software to provide meaningful comparisons. These are after all non-recourse notes and one scenario is not a reliable criteria for selecting between adjustable rate mortgages with different products with different payouts.

      You are trying to act as financial planner using one set of numbers that come from the assumptions of someone who does not know the purpose to which you are using these amortization schedules. Never rely on these amortization schedules to reach these kinds of conclusions. Put together several scenarios so that your customer can pick out what they believe will be the most likely scenario. That is how a real financial planner works with their clients. All the amortization schedules were created to do is to demonstrate how the loans work, not to be used as a financial analytical tool.

      You are in California. Imagine if in years eight through ten, appreciation rates are twenty or more percent. Would the senior be so cautious about the money she receives? She needs to look at more than the single amortization schedule each type of loan produces on lender software. That is the difference between treating a borrower as a customer and as a client.

      It is also why I claim we need a new core of originators with stronger financial advisor backgrounds to advise on these types of matters. Insurance and investment sales people can do good jobs with Standards but usually lack the sophistication to provide the alternatives seniors need to see when looking at Savers.

      • >>You demonstrate one of the biggest flaws in the amortization schedules we provide borrowers — relying on one scenario to reach significant financial decisions.

        I don’t make mistakes like that. When I review Amortization Schedules with consumers, I review all the variables with them, and everybody understands it’s simply a guide. It’s the tool we’re provided to see compare scenarios, and if anybody is aware of a better or complimentary tool, please share it with the rest of us.

      • Raymond,

        You state: “Having said that, I sold my first LIBOR Saver this weekend to my friends Mom. She wants a monthly check and wants to leave as much of a legacy as possible to her children. The Standard provided 1,762.44 and the Saver is $1,406.24. She wants the higher amount, but after 10 years the Saver leaves $310,152.00 in retained equity, while the Standard leaves $250,817.00. It was a tough decision for her.”

        In the response to my statement you demonstrated one of the biggest flaws with how we present the information in the amortization schedules, relying on only one scenario, you state: “I don’t make mistakes like that. When I review Amortization Schedules with consumers, I review all the variables with them, and everybody understands it’s simply a guide. It’s the tool we’re provided to see compare scenarios and if anybody is aware of a better or complimentary tool, please share it with the rest of us.”

        Your statement makes it clear you view your prospects as customers not as clients. What you provide is a product with little financial advice or guidance. This is not knocking what you do or what you have done in the past. It is simply pointing out that you are like many others, lost when it comes to being more than a mortgage loan originator when it comes to helping prospects understand how to make a decision between an adjustable rate Standard and Saver.

        It is important that the client participate in determining what interest rate and home appreciation rate are used in the amortization schedules they use in making their determination. When it comes to using amortizations schedules in making the choice between an adjustable rate Standard and Saver, merely explaining the variables and other factors without providing schedules to demonstrate the differences is not only questionable but generally leaves your prospect in a worse decision making situation than if you had said nothing at all. So what can one do?

        The best way to help a prospect realize which is best for them is to take the Standard and run six different amortization schedules. First run the amortization schedule you would normally provide borrowers. Then run a second with a higher weighted average loan interest rate than you expect over the life of the loan (say 6.5%) and a higher average home appreciation rate (say 5.5%) than you think will apply throughout the loan. Next run the third amortization schedule at the opposite end, i.e., with a lower weighted average interest rate (like 3.25%) than you expect throughout the loan period and a lower average home appreciation rate (like 2%). Then create the fourth amortization schedule using the 6.5% interest rate and the 2% home appreciation rate. Create a fifth amortization schedule using the 3.25% interest rate but the 5.5% home appreciation rate. Finally run a run amortization schedule using what you believe will be the most likely outcome. Make exactly the same six amortization schedules for the Saver with the same interest rates and home appreciation rates.

        Now using the printed amortization schedules for the Standard run through the various scenarios with the prospect and show the results. Do the same with the Saver. Then have the prospect help you eliminate those amortization schedules they believe are unlikely. Finally work through the remaining amortization schedules with the prospect to make sure that the prospect understands them. If they want, revise the amortization schedule to use the variables they believe are the most likely.

        If the lender software you use won’t allow you to be as flexible as indicated, look for software which will or learn to use Excel or other spreadsheet software to create them. That is what it means to help a prospect understand how to use the amortization schedule in making their decision. No one said this is easy but if your prospect is really interested in having the information they need to reach the best decision, they will generally work with you.

      • Raymond,

        You state: “Having said that, I sold my first LIBOR Saver this weekend to my friends Mom. She wants a monthly check and wants to leave as much of a legacy as possible to her children. The Standard provided 1,762.44 and the Saver is $1,406.24. She wants the higher amount, but after 10 years the Saver leaves $310,152.00 in retained equity, while the Standard leaves $250,817.00. It was a tough decision for her.”

        In the response to my statement you demonstrated one of the biggest flaws with how we present the information in the amortization schedules, relying on only one scenario, you state: “I don’t make mistakes like that. When I review Amortization Schedules with consumers, I review all the variables with them, and everybody understands it’s simply a guide. It’s the tool we’re provided to see compare scenarios and if anybody is aware of a better or complimentary tool, please share it with the rest of us.”

        Your statement makes it clear you view your prospects as customers not as clients. What you provide is a product with little financial advice or guidance. This is not knocking what you do or what you have done in the past. It is simply pointing out that you are like many others, lost when it comes to being more than a mortgage loan originator when it comes to helping prospects understand how to make a decision between an adjustable rate Standard and Saver.

        It is important that the client participate in determining what interest rate and home appreciation rate are used in the amortization schedules they use in making their determination. When it comes to using amortizations schedules in making the choice between an adjustable rate Standard and Saver, merely explaining the variables and other factors without providing schedules to demonstrate the differences is not only questionable but generally leaves your prospect in a worse decision making situation than if you had said nothing at all. So what can one do?

        The best way to help a prospect realize which is best for them is to take the Standard and run six different amortization schedules. First run the amortization schedule you would normally provide borrowers. Then run a second with a higher weighted average loan interest rate than you expect over the life of the loan (say 6.5%) and a higher average home appreciation rate (say 5.5%) than you think will apply throughout the loan. Next run the third amortization schedule at the opposite end, i.e., with a lower weighted average interest rate (like 3.25%) than you expect throughout the loan period and a lower average home appreciation rate (like 2%). Then create the fourth amortization schedule using the 6.5% interest rate and the 2% home appreciation rate. Create a fifth amortization schedule using the 3.25% interest rate but the 5.5% home appreciation rate. Finally run a run amortization schedule using what you believe will be the most likely outcome. Make exactly the same six amortization schedules for the Saver with the same interest rates and home appreciation rates.

        Now using the printed amortization schedules for the Standard run through the various scenarios with the prospect and show the results. Do the same with the Saver. Then have the prospect help you eliminate those amortization schedules they believe are unlikely. Finally work through the remaining amortization schedules with the prospect to make sure that the prospect understands them. If they want, revise the amortization schedule to use the variables they believe are the most likely.

        If the lender software you use won’t allow you to be as flexible as indicated, look for software which will or learn to use Excel or other spreadsheet software to create them. That is what it means to help a prospect understand how to use the amortization schedule in making their decision. No one said this is easy but if your prospect is really interested in having the information they need to reach the best decision, they will generally work with you.

      • >>You demonstrate one of the biggest flaws in the amortization schedules we provide borrowers — relying on one scenario to reach significant financial decisions.

        I don’t make mistakes like that. When I review Amortization Schedules with consumers, I review all the variables with them, and everybody understands it’s simply a guide. It’s the tool we’re provided to see compare scenarios, and if anybody is aware of a better or complimentary tool, please share it with the rest of us.

  • The HECM Saver reminds me of when I was working in the International Marketing Division of AST Computer. When I first got there, it was an “Engineering” driven company, as opposed to a “Marketing” driven company. We had some of the most brillant Engineers in the world, and they loved creating innovative stuff with the most recent technology. And since all 3 Founders were Engineers, the Engineering department was allowed to create new products without Marketing’s knowledge. When the new product was near completion, they let us know about it. Then it was up to us to try to figure out how to Market it. The technology was always really neat, so we sold some of it, but we’d have sold more if we were more prepared, and were included in the design phase. As the company grew, we turned around and became a “Marketing” driven company, and sold a lot more product a lot faster, and the company’s revenue exploded. That’s because us Marketing folks were able to research and understand exactly what consumers were asking for, and then tell Engineering to build it.

    HUD is the Engineering department. They’ve got the resources to create neat stuff. But it seems they didn’t spend much time with the Marketing department. Or, it they did, they didn’t listen to them throughly. The Saver program provides one of the components homeowners have been asking for – lower costs, and two components homeowners haven’t been asking for – reduced benefits and higher interest rates. It’s definately a “niche” product, because I haven’t quite figured out how to target that market.

    Having said that, I sold my first LIBOR Saver this weekend to my friends Mom. She wants a monthly check and wants to leave as much of a legacy as possible to her children. The Standard provided 1,762.44 and the Saver is $1,406.24. She wants the higher amount, but after 10 years the Saver leaves $310,152.00 in retained equity, while the Standard leaves $250,817.00. It was a tough decision for her.

    That’s a real niche market and 20% of my business doesn’t look like that. I’d love to see MetLife’s Marketing Plan. Or any other Marketing Plan that could help us all grow the Saver side of our business. It’d be beneficial for everyone.

  • I’m not so sure I would recommend buying the motor home (the value would drop the minute they leave the showroom, and a ankle injury would end their trips). Perhaps, rent or lease for a while to see if they really want to do this for a long time.. They could annuitize to pay for that and have the home remain intact. Later, they might buy, but I am still skeptical. Kids could also be a factor to complicate things. BTW: are they prepared for a long-term illness?

    • In reply to DDuck12’s comment, I was trying to give everyone a sales tool they could use. I was also trying to give the Rainmand a suggestion for concern as to how to market the product. I know DDuck12’s comment was meant well and the senior was his or her priority, I appreciate that.

      Although, If we look at the glass of water being half full, we have a chance of making the program work for us and the senior. If the glass is half empty, it will never work. There is always a reason why something may NOT work, we need to focus on how to make things work, especially in this day of age..

      2011 is going to be full of challenges as it is. You may be right DDuck12 in what you said but you may be wrong as well! The point is how to market the SAVER, we have to be creative and working with Boat and Motor Home dealers opens up a very good source of business for all of us. It also is a great way to market the SAVER.

      I also feel we need to give our senior’s more credit than we do. I am sure a 71 and 72 year old couple would have put a lot of thought into buying my example Motor Home and spend their life’s traveling 4 to 6 months a year. As far as their kids, sure they may be an influence but seniors are realizing more each day, they must think of themselves. Their lives are short lived and they need to make the best of it.

      Remember, my example has two seniors doing well in life. This is not a need based act on their part. These people are educated and know their home is for them to live in but it has another value to them beyond leaving it as an asset to their children. No, I stick to my example as being a good program for these two folks. I said before and I say it again, the SAVER is a different program that must be marketed to a special group of seniors.

      I have been in the reverse mortgage industry for 10 years and I am sure many of you have as well and some longer. During these 10 years I have seen the reverse mortgage go from a highly regulated program by HUD and a program that fit many needs for our senior’s. I remember when our product was used for retirement, improve quality of life, for vacations, second homes, vacation cabins and you name it. We were proud to say the reverse mortgage is specially designed to fill many of your retirement needs with the protection of HUD and the FHA insurance feature.

      The program was NOT a 100% welfare program! It went from what I just pointed out to a program that has been abused by our own loan originators to a program that has the worst reputation of any loan program in the mortgage banking industry today. We are compared to the sub-prime arena and we are perceived as an industry that takes advantage of senior’s misfortunes, to get them out of debt, to save their home’s!! We are NOT what we are made out to be by the news media, we are still and can be what I pointed out we were 5 and 10 years ago.

      We as an industry must take pride again in our product. We have to start looking at this product differently. I am not just referring to the SAVER now, I mean all of our products. If we don’t start standing up for our industry and start taking the pride in it the way we did 5 and 10 years ago, we will be the cause of the ruination of one of the best programs available to our senior population that there ever was.

      I realize I ran on with my words, as usual, but I love what I am doing, just like most of you. I feel I help seniors every day of my life. I see that I make seniors happy, I solve their problems for them and I give them great tidings. What profession could give you the satisfaction and knowing that we are doing God’s work, other than the reverse mortgage industry!

      John A. Smaldone

      • John,

        I would not call this God’s work but it certainly can be a real service to the senior community.

        I do not like your example. I think it limits what the Saver is. It is a cash management and debt management product. We have a tendency to focus on using proceeds for some kind of purchase. Promoting Savers in the manner you do, leaves one open to too many attacks although it is a good marketing idea.

        The_Cynic has at least this part right. In the hands of a good cash and financial management fee based only planner, this product has many positive uses. I fully support the idea that the product is better suited to the active senior still in the money making mode who are not necessarily employees unless they need cash for retirement plan funding but that subject does far beyond what can write in a comment. But that group seems to be the best demographic.

        The big issue for seniors is not out living their income. It is outliving their sources of cash.

        There is real merit in your challenge for originators to revisit how we looked at our products in the past. We need to renew our vision and passion.

      • John,

        I would not call this God’s work but it certainly can be a real service to the senior community.

        I do not like your example. I think it limits what the Saver is. It is a cash management and debt management product. We have a tendency to focus on using proceeds for some kind of purchase. Promoting Savers in the manner you do, leaves one open to too many attacks although it is a good marketing idea.

        The_Cynic has at least this part right. In the hands of a good cash and financial management fee based only planner, this product has many positive uses. I fully support the idea that the product is better suited to the active senior still in the money making mode who are not necessarily employees unless they need cash for retirement plan funding but that subject does far beyond what can write in a comment. But that group seems to be the best demographic.

        The big issue for seniors is not out living their income. It is outliving their sources of cash.

        There is real merit in your challenge for originators to revisit how we looked at our products in the past. We need to renew our vision and passion.

    • In reply to DDuck12’s comment, I was trying to give everyone a sales tool they could use. I was also trying to give the Rainmand a suggestion for concern as to how to market the product. I know DDuck12’s comment was meant well and the senior was his or her priority, I appreciate that.

      Although, If we look at the glass of water being half full, we have a chance of making the program work for us and the senior. If the glass is half empty, it will never work. There is always a reason why something may NOT work, we need to focus on how to make things work, especially in this day of age..

      2011 is going to be full of challenges as it is. You may be right DDuck12 in what you said but you may be wrong as well! The point is how to market the SAVER, we have to be creative and working with Boat and Motor Home dealers opens up a very good source of business for all of us. It also is a great way to market the SAVER.

      I also feel we need to give our senior’s more credit than we do. I am sure a 71 and 72 year old couple would have put a lot of thought into buying my example Motor Home and spend their life’s traveling 4 to 6 months a year. As far as their kids, sure they may be an influence but seniors are realizing more each day, they must think of themselves. Their lives are short lived and they need to make the best of it.

      Remember, my example has two seniors doing well in life. This is not a need based act on their part. These people are educated and know their home is for them to live in but it has another value to them beyond leaving it as an asset to their children. No, I stick to my example as being a good program for these two folks. I said before and I say it again, the SAVER is a different program that must be marketed to a special group of seniors.

      I have been in the reverse mortgage industry for 10 years and I am sure many of you have as well and some longer. During these 10 years I have seen the reverse mortgage go from a highly regulated program by HUD and a program that fit many needs for our senior’s. I remember when our product was used for retirement, improve quality of life, for vacations, second homes, vacation cabins and you name it. We were proud to say the reverse mortgage is specially designed to fill many of your retirement needs with the protection of HUD and the FHA insurance feature.

      The program was NOT a 100% welfare program! It went from what I just pointed out to a program that has been abused by our own loan originators to a program that has the worst reputation of any loan program in the mortgage banking industry today. We are compared to the sub-prime arena and we are perceived as an industry that takes advantage of senior’s misfortunes, to get them out of debt, to save their home’s!! We are NOT what we are made out to be by the news media, we are still and can be what I pointed out we were 5 and 10 years ago.

      We as an industry must take pride again in our product. We have to start looking at this product differently. I am not just referring to the SAVER now, I mean all of our products. If we don’t start standing up for our industry and start taking the pride in it the way we did 5 and 10 years ago, we will be the cause of the ruination of one of the best programs available to our senior population that there ever was.

      I realize I ran on with my words, as usual, but I love what I am doing, just like most of you. I feel I help seniors every day of my life. I see that I make seniors happy, I solve their problems for them and I give them great tidings. What profession could give you the satisfaction and knowing that we are doing God’s work, other than the reverse mortgage industry!

      John A. Smaldone

  • I’m not so sure I would recommend buying the motor home (the value would drop the minute they leave the showroom, and a ankle injury would end their trips). Perhaps, rent or lease for a while to see if they really want to do this for a long time.. They could annuitize to pay for that and have the home remain intact. Later, they might buy, but I am still skeptical. Kids could also be a factor to complicate things. BTW: are they prepared for a long-term illness?

  • It is a niche Market. And once lenders and brokers are not receiving as much cash back from the sale of the securities and the costs for borrowers begin to climb back up to where they were in early 2010, the Saver product will begin to make even more sense. Those who feel it’s of no value, wait and see. It already makes more sense for borrowers on LIBOR product who want to protect their equity and don’t need access to all the funds since this is where most have a tougher time of paying costs on behalf of the borrower. Note: if the borrower doesn’t need all the funds afforded to them in the Standard program.

    The numbers don’t spell complete success or failure for the program as of yet. It doesn’t surprise me with Met’s aggressive pricing that they may have scooped up a larger percentage of the Savers done thus far than some of their competition. But even at that, I agree with others in that unless they are sitting on a bunch that they have yet to insure, 20% of their volume? Hmmmmmm. So why call out a bunch of industry leaders by name and ask why they don’t know how to do something when the answer is so simple in this case? Money. Met spent a bunch of it in their pricing to get the available Savers. But let’s see what happens going forward now that they’ve backed off of that pricing.

    And to take some comments from some other of the industry’s best and brightest and misconstrue them as a death proclamation for the program solely because they have the unmitigated gall to express concern early on is a bit much. To drone on for nearly 700 words, serves just one purpose…to be able to hear yourself talk. Even going so far as trying to compare the (then new) reverse mortgage product in 1990 with a new variation of the program announced 20 years later with completely different demographics is not reasonable in anyone’s book. After all, the reverse mortgage now receives advertising it could not hope to see at that time and with the baby boomers now of age, it enjoys a much larger eligible population. The numbers in the roll out of the Saver can hardly be compared to the beginning of the program to be of any worldly good in comparison.

    Sure, we can all find something about others’ statements, grammar or spelling with which we can use to take issue. But because we “can”, does it make it right that we “do”? Did the Cynic actually make a point that helped anyone in their activities? If so, I don’t see it. Finally in the 5th paragraph, the Cynic suggests “…need for sound, fundamental collegiate education in financial matters…”. So the Cynic clearly feels that due to his/her superior educational background, he/she just “gets it” when others who are not as well educated don’t, and if there were some other originators who were just put through some upper-level classes, they too would get it – and voila, more borrowers would choose the Saver program. But then maybe we should offer those same college-level courses to borrowers so they can be enlightened to the level of the Cynic so they can see why they should pay higher rates and origination fees that in many instances come close to offsetting the savings of the lower MI when the originators cannot pay their costs on the Saver product…or we can wait for pricing to level out with the Standard and see how the product does at that time. We may also find that those same “naysayers” and “undereducated, uncomfortable” originators suddenly see the light and gain comfort in their new found ability to communicate this product.

    I’d love to see some honest helpful input for a change. I’ll sit down with your three “naysayers” any day and I bet they’ll teach me something besides being a Cynic or a Critic on a blog. I’ve had enough of pontificators through the years who could always tell you why someone else was doing something wrong, but had no right way of their own.

    • revmtgpro,

      Wow, even when I do not comment or reply in a thread, I get hacked. You seem to have a grudge.

      Rather than wasting our time with whacking others, try to bring some positive thinking on Savers. I would not call you a naysayer but you are certainly no proponent either. You seem more like Pontius Pilate with your own pontification all resulting in washing your hands; I hope my conclusion proves wrong.

      You may not agree with the point The_Cynic makes on the 1990 volume but look at HECMs for Purchase. Savers should outshine these HECMs in less than three years if we adjust our thinking quickly enough.

      Personally I am no fan of MetLife but even I must admit, they are not just talking, they are showing by example what can be done with this product. Credit should be given where credit is due even if you do not like the party who gets that credit.

      As to the three you call industry leaders, sit down with them and bring back the positive gleanings you gain in your time with them. There are things all four of you can bring to the table. I just don’t see any of the leadership you attribute to them when it comes to Savers — at least NOT so far.

    • revmtgpro,

      Wow, even when I do not comment or reply in a thread, I get hacked. You seem to have a grudge.

      Rather than wasting our time with whacking others, try to bring some positive thinking on Savers. I would not call you a naysayer but you are certainly no proponent either. You seem more like Pontius Pilate with your own pontification all resulting in washing your hands; I hope my conclusion proves wrong.

      You may not agree with the point The_Cynic makes on the 1990 volume but look at HECMs for Purchase. Savers should outshine these HECMs in less than three years if we adjust our thinking quickly enough.

      Personally I am no fan of MetLife but even I must admit, they are not just talking, they are showing by example what can be done with this product. Credit should be given where credit is due even if you do not like the party who gets that credit.

      As to the three you call industry leaders, sit down with them and bring back the positive gleanings you gain in your time with them. There are things all four of you can bring to the table. I just don’t see any of the leadership you attribute to them when it comes to Savers — at least NOT so far.

  • It is a niche Market. And once lenders and brokers are not receiving as much cash back from the sale of the securities and the costs for borrowers begin to climb back up to where they were in early 2010, the Saver product will begin to make even more sense. Those who feel it’s of no value, wait and see. It already makes more sense for borrowers on LIBOR product who want to protect their equity and don’t need access to all the funds since this is where most have a tougher time of paying costs on behalf of the borrower. Note: if the borrower doesn’t need all the funds afforded to them in the Standard program.

    The numbers don’t spell complete success or failure for the program as of yet. It doesn’t surprise me with Met’s aggressive pricing that they may have scooped up a larger percentage of the Savers done thus far than some of their competition. But even at that, I agree with others in that unless they are sitting on a bunch that they have yet to insure, 20% of their volume? Hmmmmmm. So why call out a bunch of industry leaders by name and ask why they don’t know how to do something when the answer is so simple in this case? Money. Met spent a bunch of it in their pricing to get the available Savers. But let’s see what happens going forward now that they’ve backed off of that pricing.

    And to take some comments from some other of the industry’s best and brightest and misconstrue them as a death proclamation for the program solely because they have the unmitigated gall to express concern early on is a bit much. To drone on for nearly 700 words, serves just one purpose…to be able to hear yourself talk. Even going so far as trying to compare the (then new) reverse mortgage product in 1990 with a new variation of the program announced 20 years later with completely different demographics is not reasonable in anyone’s book. After all, the reverse mortgage now receives advertising it could not hope to see at that time and with the baby boomers now of age, it enjoys a much larger eligible population. The numbers in the roll out of the Saver can hardly be compared to the beginning of the program to be of any worldly good in comparison.

    Sure, we can all find something about others’ statements, grammar or spelling with which we can use to take issue. But because we “can”, does it make it right that we “do”? Did the Cynic actually make a point that helped anyone in their activities? If so, I don’t see it. Finally in the 5th paragraph, the Cynic suggests “…need for sound, fundamental collegiate education in financial matters…”. So the Cynic clearly feels that due to his/her superior educational background, he/she just “gets it” when others who are not as well educated don’t, and if there were some other originators who were just put through some upper-level classes, they too would get it – and voila, more borrowers would choose the Saver program. But then maybe we should offer those same college-level courses to borrowers so they can be enlightened to the level of the Cynic so they can see why they should pay higher rates and origination fees that in many instances come close to offsetting the savings of the lower MI when the originators cannot pay their costs on the Saver product…or we can wait for pricing to level out with the Standard and see how the product does at that time. We may also find that those same “naysayers” and “undereducated, uncomfortable” originators suddenly see the light and gain comfort in their new found ability to communicate this product.

    I’d love to see some honest helpful input for a change. I’ll sit down with your three “naysayers” any day and I bet they’ll teach me something besides being a Cynic or a Critic on a blog. I’ve had enough of pontificators through the years who could always tell you why someone else was doing something wrong, but had no right way of their own.

  • revmtgpro,

    It takes 698 words to complain about 654? If 700 words are the level where one likes to hear himself/herself, your comment is just about there.

    You call these three, “industry leaders.” I do not believe they share that description but they are all very experienced and thus I call them such. But what their comments clearly indicate is that what they are not doing is leading. They are very poorly following. As to Savers, MetLife is leading.

    Why should there be any concerns about Savers at this point? This is naysaying, not an expression of any worthy concern. I guess like so many other commenters you do not understand the normal time cycle it takes for Standards to get endorsed; that time cycle is the same for Savers. Why would MetLife sit on HECMs? It is important for lenders to get endorsements as quickly as they can, not sit on them. Let’s wait for the cumulative May 2011 numbers (released in June 2011) before accusing MetLife of sitting on endorsements. That is the normal date that one would expect to see all of their HECM fundings through January 31, 2011 get endorsed.

    Many in this industry are like you and think collegiate education has little meaning in this industry. I am sure you find comfort in those numbers. Yes, I believe collegiate financial and economic education especially in the upper levels do provide an edge.

    I do not understand your point about more borrowers choosing Savers: “…and voila, more borrowers would choose the Saver program.” This is not a debate about Savers versus Standards. It is a call for the industry to expand into Savers, not replace Standards!!! Your comment indicates either I am a poor writer or you need to read more carefully. For some it is a “versus” issue but not to those visionaries who are responsible for bringing us a product which has a genuine potential to help our industry grow. With Standard volumes still dropping, this is the first ray of hope on the horizon and MetLife is cutting the way for the many. Instead of questioning what MetLife is doing, you should be hailing Craig Corn for what he is, an industry leader.

    I think the originators in our industry have done a great job with traditional non-Saver HECMs. They are still doing and will do a great job with Standards. I just do not believe that it is a good idea to take these originators out of their comfort zone to retrain them to sell Savers. If you want to see the danger of using “the three industry leaders” as Saver originators, just look at how one of them wrote in a recent RMD comment how he tired to help the Mom of a friend choose between a Saver and a Standard. It shows that personal financial decision making is not his forte and why should it be unless he is going to try to hold himself out as an expert on Savers?

    Maybe if you commented more the dreaded The_Cynic would not; however, The_Cynic cannot speak for the even more dreaded The_Critic.

  • revmtgpro,

    It takes 698 words to complain about 654? If 700 words are the level where one likes to hear himself/herself, your comment is just about there.

    You call these three, “industry leaders.” I do not believe they share that description but they are all very experienced and thus I call them such. But what their comments clearly indicate is that what they are not doing is leading. They are very poorly following. As to Savers, MetLife is leading.

    Why should there be any concerns about Savers at this point? This is naysaying, not an expression of any worthy concern. I guess like so many other commenters you do not understand the normal time cycle it takes for Standards to get endorsed; that time cycle is the same for Savers. Why would MetLife sit on HECMs? It is important for lenders to get endorsements as quickly as they can, not sit on them. Let’s wait for the cumulative May 2011 numbers (released in June 2011) before accusing MetLife of sitting on endorsements. That is the normal date that one would expect to see all of their HECM fundings through January 31, 2011 get endorsed.

    Many in this industry are like you and think collegiate education has little meaning in this industry. I am sure you find comfort in those numbers. Yes, I believe collegiate financial and economic education especially in the upper levels do provide an edge.

    I do not understand your point about more borrowers choosing Savers: “…and voila, more borrowers would choose the Saver program.” This is not a debate about Savers versus Standards. It is a call for the industry to expand into Savers, not replace Standards!!! Your comment indicates either I am a poor writer or you need to read more carefully. For some it is a “versus” issue but not to those visionaries who are responsible for bringing us a product which has a genuine potential to help our industry grow. With Standard volumes still dropping, this is the first ray of hope on the horizon and MetLife is cutting the way for the many. Instead of questioning what MetLife is doing, you should be hailing Craig Corn for what he is, an industry leader.

    I think the originators in our industry have done a great job with traditional non-Saver HECMs. They are still doing and will do a great job with Standards. I just do not believe that it is a good idea to take these originators out of their comfort zone to retrain them to sell Savers. If you want to see the danger of using “the three industry leaders” as Saver originators, just look at how one of them wrote in a recent RMD comment how he tired to help the Mom of a friend choose between a Saver and a Standard. It shows that personal financial decision making is not his forte and why should it be unless he is going to try to hold himself out as an expert on Savers?

    Maybe if you commented more the dreaded The_Cynic would not; however, The_Cynic cannot speak for the even more dreaded The_Critic.

  • I hope you guys don’t take offense if I use less than 600 words on what I consider to be a worthy subject.
    IMHO, the saver and the standard are fine financial planning tools, and welcome other niche products, as well. I’d like to see a LTCI RM, as an example.

  • I hope you guys don’t take offense if I use less than 600 words on what I consider to be a worthy subject.
    IMHO, the saver and the standard are fine financial planning tools, and welcome other niche products, as well. I’d like to see a LTCI RM, as an example.

  • The Standard is and always has been the niche product; Saver is an attempt to broaden the reverse mortgage appeal beyond the original niche of borrowers looking to maximize cash out (to payoff existing mortgage many times).

    There continue to be more age eligible homeowners without a mortgage than the small minority with both a mortgage and enough equity to payoff with a HECM.

    Saver may or may not be the tipping point that brings additional customers into the reverse mortgage industry (I’m on record repeatedly that I think it will over the next few years), but one way or another our industry will change drastically to serve additional clients beyond our past customer profile.

    • John,

      Even though we disagree on some points, you and I agree as to what the future will look like. Our differences center on when that will occur. Other than MetLife and a few others, the inertia in the industry towards the Saver is still somewhat mind boggling. Ambivalent seems to be the adjective of the day when it comes to our industry’s acceptance and promotion of Savers.

      In a very optimistic sense, I like your timetable much better than mine. I hope that in three years fifty percent of all HECMs will be Savers and Standards will have grown by 100% of what they were at the end of last year.

    • John,

      Even though we disagree on some points, you and I agree as to what the future will look like. Our differences center on when that will occur. Other than MetLife and a few others, the inertia in the industry towards the Saver is still somewhat mind boggling. Ambivalent seems to be the adjective of the day when it comes to our industry’s acceptance and promotion of Savers.

      In a very optimistic sense, I like your timetable much better than mine. I hope that in three years fifty percent of all HECMs will be Savers and Standards will have grown by 100% of what they were at the end of last year.

  • The Standard is and always has been the niche product; Saver is an attempt to broaden the reverse mortgage appeal beyond the original niche of borrowers looking to maximize cash out (to payoff existing mortgage many times).

    There continue to be more age eligible homeowners without a mortgage than the small minority with both a mortgage and enough equity to payoff with a HECM.

    Saver may or may not be the tipping point that brings additional customers into the reverse mortgage industry (I’m on record repeatedly that I think it will over the next few years), but one way or another our industry will change drastically to serve additional clients beyond our past customer profile.

  • This is by far the most entertaining series of rants in a while. I hope you all have a great year with the SAVER and the STANDARD! One point to consider : It sure would be interesting if you guys used real names vs. aliases – scope, circumstance, geography, and background ALL play a role in who we are! Knowing where you are and which model you are playing under sure would shed light on the mindset that creates your musings… Again, to a great year for all of us!

  • This is by far the most entertaining series of rants in a while. I hope you all have a great year with the SAVER and the STANDARD! One point to consider : It sure would be interesting if you guys used real names vs. aliases – scope, circumstance, geography, and background ALL play a role in who we are! Knowing where you are and which model you are playing under sure would shed light on the mindset that creates your musings… Again, to a great year for all of us!

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