Biggest Obstacle for Reverse Mortgage Growth? Lack of Industry Experience

Despite the worst job market in decades and an influx of employee applications, some mortgage lenders are finding that the current job market is presenting new challenges. Some attribute a lack of qualified applicants to increasingly stringent licensing requirements, but there could also be a new challenge stemming from the larger mortgage industry’s role in the housing crisis, and the perception that has ensued.

For reverse mortgage lenders, hiring new staff is becoming more difficult, even though more people are seeking jobs, lenders say.

“There is a saturation point, but I think I could take another 10 guys and keep them busy,” one lender told RMD.

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The biggest challenge is licensing, says Paul Fiore, director of sales for American Advisors Group. The requirements are becoming more stringent at a time when fewer applicants have background in the industry.

Even originators who left the industry to pursue other jobs have returned to find they are now subject to the new requirements, which they had not experienced previously.

“If I meet with 10 people, six will be in sales but not mortgages,” says Paul Fiore, director of sales for American Advisors Group, which runs a reverse mortgage call center in Irvine, California.

Of applicants without mortgage experience, Fiore says, the pass rate for licensing exams can be as low as 50% in his experience. For those who do have background in the industry, he estimates it is closer to 75% who pass. Overall, he says, more inexperienced than experienced are applying.

But on top of that, the mortgage meltdown and ensuing housing crisis has also changed the dynamic, he says.

“There were many in the industry who may have left to pursue other careers over the past six to 12 months,” he says. “Now, they may try to get back into the industry, but they didn’t realize there were going to be so many tests, and that the exams are more challenging.”

The forward mortgage business is facing its own set of challenges with a refinance boom sparked by record low rates. As mortgage companies ramp up staff to meet the demand, many are wondering how long they can keep the new hires on, National Mortgage News reported this week.

But there may be also be a larger issue in the public perception of the housing crisis and the role lenders played in the financial collapse.

“It is way down on the list,” a lender told RMD of his hiring challenges, “because of the way people acted during the ‘good’ years.”

Written by Elizabeth Ecker

 

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  • You are not going to find 10 racehorses in Irvine but you can find 10 racehorses in the region.There are phone experts in the Reverse Mortgage business that don`t need  supervision to do well.  Phone dialers have reports built in to measure the calls.

    • Thomas,
       
      As to true industry expansion, I disagree.
       
      The issue is not the present because few if any believe there will be any substantial growth in industry endorsement production next year.  With so much wrong for immediate growth, real industry expansion could be several years off.  Not even HUD seems particularly worried that new HECM origination and endorsement activity will overwhelm it in the next thirty-six months.  There are real questions if the industry can reach 60,000 endorsements next year.  In fact many of the new things coming out of NRMLA to help the industry enhance its image are both far too early and far too late to make any significant impact.
       
      There are far too many things wrong to hope for an immediate recovery in our industry.  How soon will we see 115,000 endorsements in a single fiscal year?  Even if we reach that level, how much of that will come from less profitable Saver endorsement production?  Not all endorsements are as equally valuable to lenders or even originators.
       
      The more relevant issue is where will the qualified origination staff come from in 5 years?  Larger lenders which are not nationally chartered want experienced AND licensed originators.  Without Wells and Bank of America to train new originators from what source will training come?  Licensing is a horrible barrier to overcome.  Most lenders would prefer people who do not come from the forward side of the industry due to the need to retrain them.  So this is not only an experience issue but for many a licensing issue as well.
       
      In most mature industries the largest employers provide the initial education and training for most industry participants.  To maintain a training staff whose services are needed on a intermittent basis is simply too costly to maintain.  In this regard losing Wells and Bank of America is a severe loss and real ongoing cost to the industry as a whole.  Also most employers cannot afford to pay for the time off needed to obtain the education and testing required for licensing.  Other than licensing was the acquisition of Ken Kanady the first salvo in the  way new originators will be trained on reverse mortgages and internal procedures?  Many industries have not only in-house training through their own staff or outside vendors but also send new staff to seminars with staff from competing firms. 
       
      For now you are right.  As to long-term industry expansion, the answers are not nearly so clear but training costs for most lenders will no doubt increase.

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