Reverse Mortgage Originators Face New Challenges, Opportunities Under FA

The reverse mortgage today is certainly not the same product that it was before April 27 when the Financial Assessment (FA) took effect. The changes, while they brought forth a slew of new requirements, also created new processes for reverse mortgage originators—some more challenging than others.

For some, the more in-depth, analytical review of a prospective borrower’s personal circumstances presents a few challenges during the origination process, especially when it comes to building trust. For others, the biggest adjustment when originating in the FA environment is overcoming a “mental hurdle.”

“The interview process has become a little more complex, because now we have to ask more probing questions and we have to be more strategic on behalf of the client to see where they stand,” says Mike Gruley, a certified reverse mortgage professional (CRMP) and director of reverse mortgage operations at Plymouth, Mich.-based First Financial Reverse Mortgages. “There’s a more analytical side of the origination process, which for some people is really out in left field.”


And this goes for both the loan originators, who may have never had to get so intimate in their question-asking with their clients, as well as the borrowers, some of whom originators say seem suspicious when constantly being probed for information about their financial history, especially when it comes to inquiring about previous debts and other credit blemishes.

“When it comes to letters of explanation, questions about judgements and bank statements, it gets personal about what was going on in their life at that time,” says Kari Van Kleef, operations manager at Fairway Independent Mortgage Corporation based in Marshfield, Wis. “Most of the time that upsets them [borrowers].”

The transition of loan originations now having to ask more questions and dig deeper than they had to in the past has created a mental hurdle for some loan officers, says Harlan Accola, a reverse mortgage planner and CRMP with Fairway, which operates 250 branches with over 2,000 employees. The company also does forward lending.

“The biggest adjustment is in the LO’s head,” Accola says. “The mental adjustment is the first important thing. Just get your head on straight. If you make it a problem in your head, it’s going to be a problem.”

Fairway ranks within the top-100 HECM originators, according to the most recent industry data tracked by Reverse Market Insight. In June, the company reported 17 loans, a 6.3% increase from the previous month, and year-to-date in 2015, Fairway’s volume has grown 43.8% compared to the same period last year.

Accola attributes the volume increases to the training Fairway has conducted at its branches in efforts of educating its personnel, both on the operations and sales sides, on the FA and what to expect from the new requirements and processes.

“Whether its FA or any big change, when there is proper communication between the operations people and salespeople it creates a synergy,” he says. “That is critical for anyone being able to survive the Financial Assessment.”

Written by Jason Oliva

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  • Good article and a lot of good points brought out. One was about the mental hurdle many LO’s have that they must get over.

    I can understand an LO that has only been in the reverse space, with no forward or traditional lending experience. I am sure the transition has been a lot easier for them.

    One good point made by Harlan Accola of Fairway was the training they have made available for their people. There is a lot of webinars being offered by most of the large GNMA issuers such as AAG, Liberty and Urban as well as many others. I feel strongly that company heads need to enforce and require their LO’s to take these webinar training programs, they are very good, I know, I have and still am taking them.

    I am sure if we all look back at some of the seniors we were able to put into a reverse mortgage, we would say today, these seniors should not have been qualified, it was only a temporary fix for them?

    What is sad is that a lot of those same people are the one’s that defaulted on their property charges and eventually many lost their homes.

    In closing the point I want to make is that those that are going to stay in the industry must embrace the FA ruling in a positive way and learn about it as much as they can. Those that don’t, may not make it and that is as truthful as I can get!

    John A. Smaldone

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