New Alliance Aims to Educate Public About Reverse Mortgages

A new alliance is supporting a national campaign to educate seniors and their loved ones about reverse mortgages. 

Professional Mortgage Alliance (PMA) has developed a strategic alliance with nonprofit 3in4 Association to produce educational materials regarding reverse mortgages. The campaign is also meant to educate those who specialize in working with seniors.

The 3in4 Need More campaign raises awareness of the importance of planning for one’s long-term care needs and provides a variety of resources for seniors and the professionals who work with them, including information about reverse mortgages.

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While 3in4 has supported the reverse mortgage product as a viable tool for retirement planning since 2011, this new strategic alliance with PMA will provide 3in4 with with more reverse mortgage information to distribute, as well as live correspondence. 

This strategic alliance with 3in4 is an example of PMA’s “unique business model of developing relationships with professionals who already serve the senior segment of our nation,” says PMA Chief Executive Officer Michael Banner.

The strategic alliance is a “national endorsement,” he says.

Banner authored a chapter about reverse mortgages in 3in4’s resource guide for seniors; “The Essentials for Long-Term Care Planning,” a guide that averages about 40,000 downloads a month. 

“[The chapter] states today’s reverse mortgage is no longer a needs-based ‘product of last resort,’ but should be considered as a viable option in an overall and more comprehensive retirement plan,” he says. “It details the options of how a client can draw money from their reverse mortgage and deals with the most common mis-information and half-truths that plague our industry.”

Currently PMA is approved to do business in Florida and Connecticut, and is in the process of applying to operate in an additional five states: Texas, Oklahoma, Tennessee,  Kentucky and Pennsylvania.

The industry has a long way to go when it comes to educating the professionals who work with seniors on a daily basis, Banner says.

“The reverse mortgage has always been looked at as a needs-based product, or a product of last resort,” he says. “But, it should be treated as a powerful option in an overall and more comprehensive retirement plan. Our philosophy is, ‘Let’s help seniors have the highest quality of life possible during their retirement years.”

Written by Cassandra Dowell

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  • Mike is quoted as saying: ““[The chapter] states today’s reverse mortgage is no longer a needs-based ‘product of last resort,’….”

    Mike seems stuck on not recognizing HECMs for what they truly are — a mortgage which can not only serve as a loan of last resort but also more importantly a financial planning product which when put to work early enough in retirement can provide security from having the need for a loan of last resort.

    Mike and others refuse to see that we still have a substantial number of seniors who need this product as a loan of last resort; just look at the percentage of seniors getting fixed rate HECMs which draw out 90% of the principal limit. That means that mandatory obligations are at least 80% of the initial principal limit at the time of closing. Very few of those numbers are HECMs for Purchase although to hear ones like Mike you would think all of them were.

    While I support what is trying to be achieved, I cannot support creating more myths about the so called “new” reverse mortgage such as the one stated in the quotation above.

    • RMMyths,
      I don’t know how you can possibly derive your comments from my quotes.

      “Mike seems stuck on not recognizing HECMs for what they truly are — a mortgage which can not only serve as a loan of last resort but also more importantly a financial planning product which when put to work early enough in retirement can provide security from having the need for a loan of last resort.”
      You are quoting my exact model!
      Let me reword my quote from the original piece. “The reverse mortgage should not be considered as just a needs based product of last resort but also a component in an overall retirement plan.”
      As far as your comments regarding the HECM for Purchase my personal experience, as well as those I work with, have proved to us the more real estate agents who learn about this product the more loans we write. But yes, it is still just a small fraction of the entire industry.
      The fact remains, most reverse mortgage professionals will not put fourth the effort it truly takes to establish a referral base of real estate agents.
      The loan officers I work with do put fourth that effort and we are all writing H4P’s consistently and having a ball!

      • Mike,

        To the average reader when you write in a booklet that “today’s reverse mortgage is no longer a needs-based ‘product of last resort,” that is an absolute. You give no ground for it still being used as “a needs-based based product of last resort” at all today unless you are saying “no longer” does not mean no longer

        You can get away with a lot of mistakes with us but in a booklet that is going out from a non-profit to the general public? You are stuck with what you wrote and it is blatantly inaccurate and wrong. Unfortunately and far worse your words of discouragement could cause some dear senior from even applying for a HECM. You should carefully think out and edit what you write.

        HECMs for Purchase are a useful product and more useful in some parts of the country than in others. Florida is one of those places. But let’s not build a fantasy around them. Until the product shows some significant traction like being 20% of all originations, tales about HECMs for Purchase being little more than a great door opener with Realtors and that it can be are nothing more than fantasy and a rather motley myth.

  • I understand to a point what RMMyths is saying. However, I don’t think Mike meant that the HECM product would not be a product for those still are in need of improving their quality of life or even those that need the HECM as a means of a last resort.

    However, We must all embrace the new changes as for what they are, which will mean some of those seniors that may have been able to be qualified before April, 27th will not qualify today. That does not mean those that are in need will not qualify. As long as our seniors can meet the new criteria’s, they will still be able to take advantage of the opportunities a HECM will give them.

    I feel the new alliance between PMA and 3 in 4 will benefit everyone from an educational standpoint, we need all the education we can get! I also feel Mike was trying to point out that we must change our mind set to a degree. The reverse mortgage has always been a great financial planning tool but it was not pushed like it could or should have been.

    Today we must approach the industry differently, we must be more diversified in our marketing challenges and go after new opportunities, they are out there!

    All of us that remain in the industry will hopefully always have the passion for the senior in need and we will still do all we can to help them reach financial relief.

    Now we can also focus on helping the senior that may be in a better financial position to reach their goals in life but on a different level. That is my take on it, I see some very positives with what PMA and 3 in 4 Association is doing.

    John A. Smaldone

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