The 2019 edition of Understanding Reverse, the book used by industry personnel and consumers alike as an informative reference tool about reverse mortgage product offerings, features numerous changes which aim to paint a more accurate and lender-neutral picture of contemporary home equity utilization practices. These include reflecting increasing prevalence of proprietary products, the updated Home Equity Conversion Mortgage (HECM) lending limits for the year, additional details on lien seasoning and more.
RMD sat down with the book’s author Dan Hultquist, who also serves as Live Well Financial’s vice president of education and organizational development, to talk about the book’s service as an informative tool in the reverse mortgage industry, as well as the events and factors that precipitated the major revisions made in this year’s edition.
“I get feedback throughout the year from people who’ve read a chapter, but who didn’t understand it, so I mark it up as a change for the next year because I want to make sure that it’s crystal clear,” Hultquist said about what often catalyzes the book’s revisions from year-to-year. Another source of changes comes from someone reaching out to Hultquist with a question, and telling him that it’s not covered in the book. “That happened twice this year,” he said.
A general misunderstanding of lien seasoning led to its inclusion in this year’s edition. “A lot of people don’t understand exactly what lien seasoning is, or the specifics around what has to be seasoned and what doesn’t. So, I added that chapter,” Hultquist explained.
With proprietary reverse mortgage offerings becoming available from more vendors, a chapter about them was a natural inclusion to the new edition. “What I settled on was [focusing on] some of the reasons someone might go to a proprietary,” he said. “It’s not just because they’re jumbo, there are a bunch of reasons that I outlined in the chapter. I just posted a blog on that, too, which contains a lot of the content from that chapter.”
Hultquist also emphasized the importance of originators who pick up the book to include their contact information so that it can potentially serve as a business source.
“If you’re a loan originator, and you give [the book] out, you’d better put a rubber stamp or a sticker in the front cover with your contact information and NMLS ID, because if they don’t know who to call, they’ll find me online and call me, and I’m not a loan originator,” Hultquist said. “I’m not the one who gave them the book, but what happens is that it gets passed around.”
He detailed one scenario in which the book was given to a financial planner who was dead set against the reverse mortgage product, but the copy that was given out ended up in the hands of a receptive potential borrower who ultimately ended up getting a HECM for himself.
“Now, I don’t originate loans anymore, but there’s a situation where I gave the book to a financial planner who wasn’t a fan, and I still got a referral from the financial planner, even though he still disagrees with the use of the product,” he said.
While chapters on lien seasoning and proprietary offerings are the larger revisions made to the book’s new edition, those only begin to describe the tailoring done to the book for 2019.
“There are 70 significant changes that I believe make it cleaner and easier to read,” Hultquist laid out. “I think it’s by far the best edition that we’ve had because every year, people call and help me refine it. I also added a small section on the appraisal review process for collateral review,” he said.
Beyond these changes, Hultquist says that the process to make the book a tool that can answer all the major questions that surround products that utilize home equity is ongoing, including the different types of proprietary products that continue to become more widely available.
“After all, the title is ‘Understanding Reverse.’ It’s not ‘Understanding HECM,’” he said. “There is a distinction. A reverse is any form of lien against the home with a deferred payment. That opens the door to all kinds of conversations, so we’ll probably talk in the future about all kinds of equity release strategies.”
Find more information on the current edition of Understanding Reverse at Dan Hultquist’s official website.