New reverse mortgage loan officers in search of education have their pick from a smorgasbord of on-demand training courses, including a growing number of intensive programs aimed at filling the gaps in the typical eight-hour NMLS continuing education classes.
As more forward lenders look to enter the reverse marketplace as an additional revenue source, developing the skills necessary to serve the community — while also realizing the differences between a Home Equity Conversion Mortgage and a traditional loan — might be their biggest hurdle.
“A reverse mortgage is a totally different product, with a longer sales cycle, and for a protected class,” Scott Harmes, who designed and developed C2 Financial’s reverse mortgage division, told RMD.
Harmes was the main architect of C2 Reverse’s Training & Certification Program. Launched in late 2016, it teaches loan officers practical skills like how to use reverse origination software and reverse-specific sales and marketing techniques. Today, C2’s reverse mortgage loan officers bring in a bulk of the company’s business.
Yet even for the most experienced trainee, making the transition into the reverse space can be daunting. Working with a protected class means adhering to a higher set of standards and potentially taking on more legal liability. That’s why the National Reverse Mortgage Lenders Association’s code of ethics, which covers issues including how to detect elder abuse, is mentioned early in C2’s program, said Harmes.
The sales cycle, which sometimes lasts years, can be an emotional time for borrowers. It’s usually the last transaction they will ever make on the home where they may have lived for decades. Reverse loan officers must learn to communicate not just with homeowners, but also with financial planners, accountants, attorneys, and any other advisers that a prospective borrower may have. As they build relationships with older homeowners, they need to spell out in simple terms complex financial topics like the line-of-credit option included in some HECM products.
“If you’re not in it for the long run, you’re probably not going to be successful,” Harmes said.
NRMLA’s Education Committee now partners with Loan Officer School, a training and licensing company, to offer nationwide reverse mortgage continuing education. Dan Hultquist, who co-chairs the committee, notices one commonly misunderstood area: regulations regarding spouses.
Hultquist said new loan officers often ask him about protections for non-borrowing spouses included in HECM products. For instance, upon the death of the last borrower, it’s possible to delay the “due and payable” status of the loan for a NBS until their own death or other event that causes the loan to mature.
“Loan originators don’t understand they only have protections if the borrower dies,” said Hultquist, who is Live Well Financial’s vice president of education and organizational development .
He advises originators to educate prospective borrowers about factors that can trigger the maturation of a loan, such as the remaining spouse moving to a nursing home for over a year, and to explain up front that planning for in-home care may be necessary when a non-borrowing spouse is involved.
Written by Clare Curley