If you talk to any reverse mortgage originator, chances are that you’ll be told about the more educational and consultative approach that’s often required in the course of their work. Because of the way a relationship is developed between originators and borrowers in the reverse mortgage business, loan officers are often in a unique position compared with their peers in other lending businesses in terms of how – and how often – they connect with their clients to guide them through the loan process.
Taking this approach can be more comfortable for some originators over others, but for one person who has a history in educating people, that could lead to a more natural transition into a career as an originator. Laurie MacNaughton, reverse mortgage specialist with Atlantic Coast Mortgage in Fairfax, Va., started her career off as a teacher before transitioning to a role as an editor, ultimately arriving at reverse mortgage origination.
In this latest profile in RMD’s ‘Origins’ series, discover how a self-described “poorly” worded question to a recruiter ultimately led to a varied and reflexive career for Laurie as a reverse mortgage originator, and how an early test of hers served as a window to the diverse number of scenarios she would have to tackle over the course of her career.
How long have you been working in the reverse mortgage industry?
I started doing reverse mortgages in early 2008.
How did you first learn about the reverse mortgage product, and what led to your initial realization that the industry could serve as a career path for you?
To make a long story short, I was working as an editor for a law firm and got a call from someone in the industry. The very first words out of my mouth were, ‘Reverse mortgages – are those things legal?’ That’s a question which may go down in history as one of the poorer things to say to a recruiter.
However, he said enough I found interesting that I pulled up code in LexisNexis and read years’ worth of reverse mortgage legislation. I jumped into lending and have been doing it ever since.
What would you say was your earliest big test you found most challenging in your origination career?
Mere survival as a loan officer was the first big test. I cannot possibly overstate how little I knew about lending. This included stuff like what a title company really did and what a HUD-1 was. Had it not been for some very kind ‘forward’ support staff in my branch, I don’t think I would have survived.
What is your most unusual case that you’ve had to deal with in your capacity as an originator, and how did you solve it?
I have made a career out of solving really, really crazy scenarios, including a borrower “squatting” in her own burned-out row home in Washington, D.C., a hoarding situation so severe I had to have a crime-scene contractor do the cleaning, and a few dozen that have bounced into the courts due to incapacity issues.
However, one situation that will forever remain with me was a borrower named Nancy. For years she and her husband had rehabilitated dilapidated farmhouses and flipped them. About 12 years earlier they had bought a property, and very shortly thereafter Nancy’s husband died suddenly. Only weeks later she was diagnosed with Parkinson’s, and by the time I met her she clearly appeared to be end-stage and was some $100,000 in debt to family members.
The home itself, which many years before had been a fixer-upper, now looked like a knocker-downer. I write a newspaper column for the local papers, so I used my column to draw attention to Nancy’s plight, and I also approached two local building supply chains to ask for donated supplies. Area builders donated building-site overages, a roofer donated a new metal farmhouse roof, a large paint shop donated hundreds of gallons of paint, and a septic company pumped the septic tank. I then went to every house of worship in the area and did a short presentation, and willing congregants came out by the dozens to do the rebuild.
It took us a couple of months to complete the home, but it was absolutely lovely once finished. We closed on a Tuesday, the loan funded that Friday, Nancy repaid her family Saturday, and died early Sunday. When I went to the funeral, her whole family told me she was just hanging on until she could repay her debts.
What would you classify as your biggest accomplishment in your work as a reverse mortgage originator?
My very first career was teaching, and I think my biggest accomplishment is teaching professionals, either individually or in groups. Many have told me they had heard other reverse mortgage presentations but had never before understood how they worked.
What do you think is needed for potential borrowers to be more fully educated about home equity release?
The most potent influencer in homeowners’ lives is a trusted professional they’re already working with, be that their banker, their attorney, or their financial planner. I spend a significant amount of time teaching professionals, specifically because homeowners are already going to them with questions about the suitability of a reverse mortgage.
Where do you see the reverse mortgage industry in 5-10 years?
I think it’s clear the conforming products will play a very large role in the coming years.
What is the industry’s biggest challenge today, and how can it be overcome?
In my local market, principal limit factors continue to be the biggest issue, as many older homeowners have moved to the greater D.C. area as federal contractors following a first career. Because of this, many still have quite large forward mortgages that cannot be extinguished either with a HECM or proprietary product.
As the conforming market evolves this may sort itself out, but catering to this scenario is an obvious cure.
Complete the sentence: If I could change one thing about the reverse mortgage it would be:
Back-end issues! The process following the last title-holder’s death is a nightmare. I can almost guarantee that if someone has a visceral negative reaction to a reverse mortgage, the story I’m about to hear has to do with the foreclosure of a home that had sizable equity left. And these stories are not just anecdotal – I wade into some of these cases, and they’re enough to make anyone furious.
The process sullies the whole program’s reputation, both with homeowners and with professionals.
If I could erase one reverse mortgage misconception it would be:
The biggest misconception I would like to overcome is that it’s best to “wait until I’m older.” I cannot begin to count the times someone first inquired years ago and now wants to move forward, but by this time a full LESA is inevitable.