4 Sales Tips From Successful Reverse Mortgage Professionals

In an increasingly competitive reverse mortgage lending environment, more than ever, experienced originators are having to refine their sales practices in order to close loans. 

From the kitchen table to the call center, loan officers are focusing in on tried-and-true best practices. Several originators shared their tips during the National Reverse Mortgage Lenders Association Western Meeting last week. 

Make yourself known. Relative to the number of reverse mortgage eligible residents in the U.S., there are very few reverse mortgage experts. Even among forward loan originators who offer both forward and reverse mortgages, visibility is paramount in today’s market. 

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“They have to announce themselves to their sphere of influence,” says Scott Harmes, reverse mortgage division manager for San Diego-based C2 Financial, of forward brokers that have gone through C2’s reverse mortgage training and certification. “As you think of the people you know … they all know a couple dozen realtors, and a couple loan originators, but you are probably the only reverse mortgage specialist they know. We give [originators] the tools to announce themselves to their sphere of influence.”

Work with the adult child. The adult child of a prospective reverse mortgage borrower can be a major hurdle to any deal. Often coming to the conversation with abundant questions and scrutiny, adult children typically have done some research and have questions and notions based on the information they have gathered. Originators can work to address the scrutiny head-on by including the adult children in the meetings with prospective borrowers and asking for their questions upfront. 

“[The adult daughter] will say something like, ‘I understand these loans are a ripoff. They cost too much,’” says John Luddy, VP of reverse mortgage lending for Norcom Mortgage, based in Avon, Conn. “Repeat exactly what she has said to you. Act surprised and end the sentence with a question. ‘These loans are a ripoff?’ Then stop. Now the ball is out of your court to defend the loan it it’s her her court to defend her statement.”

Originator can then explain the misconceptions around the product or dispel any myths brought up by the adult children. 

Celebrate success. Within an organization, it’s important to focus not only on the challenges of the current operating environment, but the successes, says Don Giorgio, founder CEO and president of United Northern Mortgage Bankers, Ltd., based in Levittown, N.Y. 

“Make sure you celebrate the success,” he says. “Celebrate with the person next to you, celebrate with the company. It makes you a happier person.” This, he says, will lead to more success. 

Positivity, too, goes a long way, Luddy says. 

“We hear a lot of doom and gloom about what’s going on in our industry,” Luddy says. “Play the cards you are dealt; don’t fight with the dealer. Take what we have and make something out of it.”

Be an expert. Above all, it’s important to maintain expertise during this time of change. With several new rules, including those relating to loan terms and treatment of non-borrowing spouses, originator expertise is paramount. 

“You have to be able to understand the product so well to not seem patronizing to the adult child who has a doctorate in math and the mother who has lost her fastball,” Luddy says. “There is a different level of understanding between being able to sell something and being able to buy something. Don’t expect your senior borrowers to do your job. Don’t expect them to sell the program to the adult children. That’s your job.”

The same is true for overall education, Giorgio says. 

“Our biggest obstacle is not the client, it’s the public perception,” he says. 

Written by Elizabeth Ecker

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  • There are probably more articles written lately that discuss the fact that “seniors won’t have enough money when they retire,” of all other HECM-linked issue-specific “headlines.”

    With a robust growth-economy, this headline is all the more relevant with regard to fixed-income retirees. Maybe it isn’t so much how seniors perceive the HECM that’s important to originations, but how much more seniors are going to -need- the HECM. There’ll be less and less options for seniors, the higher the costs for goods and services. The option of -not- getting an HECM would seem less and less viable in an inflationary, economic climate.

    Plus, the rise in home values will be increasing the value to loan aspect of the HECM; “cash poor, home-asset rich” will more relevant than ever in the coming years.

    • Ed,

      Those were exactly the arguments that were made for joining the industry when I came in a little over 13 years ago. Specifically, the first Baby Boomers were soon going to be turning 62 starting in 2008 at the rate of over 10,000 per day.

      We also knew back then that in the private sector defined benefit pensions were either largely vanishing or being replaced by 401(k)s and other defined contribution type plans resulting in fewer benefits for seniors in the future. Few Baby Boomers had the kind of savings or portfolios needed to survive retirement but a large majority had homes. They were known as either the house rich/cash poor or more appropriately, asset poor/house rich.

      Home values were growing and seniors were becoming more comfortable with the thought that home value might actually outgrow the compounding of the HECM.

      For the first time TV personalities like James Garner, Jerry Orbach, and Robert Wagner were driving seniors to seek information on HECMs. Demand which previously had to be created at great cost to the originator was now available at almost any corner where seniors seemed to be lining up to provides with the data they needed for a HECM application. Some originators wore polo shirts saying things like “Seniors, I’m the guy with the cash” or “Seniors, See me for $$” and it worked. By 2007 selling was much easier. We had over 100,000 in endorsements and there were few originatiors with even the experience I had. It was the best of times just before a terrible downturn in demand in fiscal 2010.

      We’ve seen and used all of the things you list. The biggest problems we have today we did not have back then is lower principal limit factors and a senior perception of home value that is what goes up will come down. In ways things are better today than back then BUT fighting through senior misgivings and experiences of home value downturns became more common by fiscal 2010 and far more difficult by fiscal 2014 than the HECM problems of a decade and a half ago.

      Your views are those of someone who is getting familiar with the history of HECMs, which is a good thing. However, those views will be refined so that maybe one day….

      • Maybe one day you’ll learn that your views are basically from someone who suffers from “I wish I thought of that” syndrome.

      • Ed,

        You probably had a winning personality in your youth. The problems is you came to HECMs a little late but seem to want a participation award.

        So far your contribution to the industry comes from a few years of learning. That is not bad but you seem to resent those who have a lot more to offer.

        You seem engrossed in things that are decades old. Not bad for a newcomer. The originator who you went through to get your HECM recommended you as someone who should be an originator. The problem is you would have to SERVE the interests of those who actually are not familiar with HECMs, not an easy practice for many to master and maintain even when they are in their forties.

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