Reverse Mortgage Success Falls on Training in Wake of Change

Despite reverse mortgage industry volume at at 12-month low according to April numbers from the Department of Housing and Urban Development, one in the top five by volume, are closing a record number of loans. American Advisors Group posted roughly 1,200 loan closings during the month of April, more than twice the loan count of its next competitor in the volume rankings.

While AAG benefits from a national ad campaign featuring former Senator Fred Thompson, the company’s director of sales says the recent success comes down to one thing: training.

“For us or for anybody, the biggest challenge is how do you explain all the changes?” says Paul Fiore, ‎executive vice president of retail lending at AAG. “We sell the product as a new product and focus on the value to the borrower.”

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The centralized nature of AAG’s platform is also beneficial, as training to the company’s 800-plus employees that are largely based in one place saves time and costs.

“One of the advantages of being centralized is you can hone in on the changes that occur. We teach to the changes and client base so they understand the benefit that remains. We try not to get caught up on how much less the borrower can get.”

Further, AAG says most clients are not aware of the changes because they are early in the reverse mortgage research process when they contact an originator, so originators work with them on the product today rather than reflecting on the product of the past.

“Most clients have not been a part of those changes, so for them, it’s a new product,” Fiore says. “We have to sell them with the same enthusiasm.”

The focus on training is ongoing and often takes place in advance of changes being implemented. For example, AAG currently is training to the changes outlined in Mortgagee Letter 2014-07 regarding new non-borrowing spouse interpretations. The company is also getting employees up to speed now on the financial assessment that has been promised by HUD but has yet to be released officially or set for implementation.

“We’ve never focused on the interest rate or margin. We don’t focus on anything other than: Does the loan make sense for the client?”

Written by Elizabeth Ecker

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  • There are many mistakes that can be made when introducing a HECM to a new prospect especially with so many changes. Treating the changes as changes should be avoided when speaking to new prospects. I have never understood what the value is in comparing a Standard or Saver to the current HECM unless the prospect inquires.

    I know some feel obliged to compare HECMs before and after 10/1/2013 but why?

    • Agreed. What happened to “what are you trying to accomplish”? After that it doesn’t really matter about old or new as long as you’re fulfilling their goals with the best efforts that they can best utilize..

  • Training, so much can be read into that word. Some think training is to teach a loan originator how to sell products and close a deal, not with knowledge but with high powered sales techniques. This may work for a while but in the long run, it will catch up to those that practice this approach.

    In this environment, companies need to focus on spending the time and money on training their loan originators on being as knowledgeable as they can be about reverse mortgages (HECM).

    Our senior clients have lost trust in our industry and in many of the people selling our product. Trust is the single most important part of a relationship that is needed with our prospective senior borrowers.

    Trust is earned from our seniors in the form of knowledge on the part of a loan originator. Those LO’s that can answer questions quickly and with accuracy will build the trust that is needed in order to be successful.

    To guide and counsel our seniors properly in this environment is more than just important, it means everything. Knowledge sells!

    I feel that companies need to look at every training programs being offered in the market place. There are some very good one’s being offered that meet all the Federal and HUD requirements…. I could go on and on about this subject but I feel those reading this knows the score, especially in this changing and volatile market we are in!

    John A. Smaldone

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