Which Product is Right for The Reverse Mortgage Consumer?

NewImage.jpgReverse Fortunes is providing RMD readers with a FREE training session coming up on Thursday, May 31, noon to 1:00 PM EST (9:00 AM PST). Mark your calendar!

The session, featuring input from National Reverse Mortgage Lenders Association legal counsel Jim Milano addresses the topic of ethical product placement. There used to be only one reverse mortgage product choice: adjustable rate. Today, there are fixed, adjustable, standard and Saver with different margins. Regulators are paying attention, too. Originators are now in the position of educating borrowers on the different product types and offering the products that best fit their needs.

Depending on your state, you may have a fiduciary responsibility, in addition to an ethical one.

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Reverse Fortunes will also cover:

  • What is “steering”
  • When a comparison sheet isn’t enough
  • Practical measures in protecting your business
  • Goals first, product education second
  • A decision tree? Plant one in their minds
  • Why so many fixed rates?
  • The CFPB and what is to come with HECM products
  • Product pricing today and tomorrow

Space is limited, so sign up now!

Date: Thursday, May 31, noon to 1:00 PM EST (9:00 AM PST). Mark your calendar!

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  • There should be a major concern.The orientation session is a good thing, we need more of them. However, those that are out there to scam the senior, it will serve no purpose.

    One of the items that will be discussed is “Why so many Fixed rate loans”? The fixed rate loan serves an obvious purpose but not in all cases. Look at the money trail. The fixed rate standard is paying far more than any of the ARM programs or the Fixed Saver!

    The money trail will also lead you to steering and fraud. Fraud is way up this year. All the so called regulations being imposed are not curtailing fraud perpetrated on our seniors, yet, it was supposed too!

    The pricing structure of our product, mainly the fixed standard is the enticement of all enticements to take advantage of our seniors.

    If we are doing our jobs right and keeping the seniors interest at heart as the number one concern when we counsel them, we would ignore how much money we would make on the loan! This is not happening in many cases. To many loan originators are calculating their commissions prior to going into the appointment. 7 and 8 years ago, we were not doing that.

    Are our seniors better off today when being counseled by a loan originator than they were 8 years ago?

    John A. Smaldone
    http://www.hanover-financial.com

    • John,

      What you are saying is that the loan officer has far more influence on the borrower than the counselor.  Why is that?

      For one thing counselors are spending so much time trying to be holistic through FIT that they are not addressing fundamental loan questions.  Even though NCOA declares that seniors can stretch their retirement cash flow by controlling spending, where is that subject covered in FIT or BCU?

      Counseling seems bent on trying to cut its own costs (not its price to the senior) more than helping seniors control their own.  Most ignore the impending situation to cover the unknown about disease, future hospitalizations, living alone, and other seemingly helpful subjects.  In one hour how much can counseling really cover?

      I agree with BCU but why have the counselor waste the time of data input when counselees are guessing answers?  Why not make this a requirement to complete counseling?  Why leave this to the LAST information the counselor receives?  Why not receive basic reverse mortgage education online or through group sessions?  Use the actual time with a counselor testing the education, reviewing the BCU information and gathering other budget information if needed, and then covering the reverse mortgage that the counselee is considering.  That order and that use of counselor’s time actually seems logical and sensible and makes counseling the consumer protection it should be.

  • Hi Cynic,

    To answer your question, yes, I do think the LO has more influence on the borrower than the counselor, for a lot of reasons. First off, the LO gains a personal relationship ant trust with the borrower. The counselor is a one time shot and the same kind of relationship is not established.

    The LO gets far more into personal situations with the borrower than the counselor. The LO spends a great deal more time with the borrower than the counselor. I could go on and on why the LO has more influence on the borrower than the counselor does.

    However Cynic, the article seems to be more based on product comparison and the training session being held on May, 31st, rather than counseling? Unless I am reading it wrong.

    Thanks,

    John Smaldone

    • John,

      Normally, a counselor has more trust at the beginning of the session than is extended to originators in their first meeting.  The simple reason is that HUD requires counseling and counseling is considered a consumer “protection” which means by inference we are not, while at the same time, the consumer is generally aware that they might find a better deal somewhere else.

      I hope the session is looking more than comparing products and addresses the ethical and moral considerations an originator should be considering when trying to match CONSUMER needs to available products.  Also I hope they address the ethical dilemmas some originators face whose employers only offer fixed rate HECMs or only Standards and not Savers. 

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