Origins: Charting a Path from Teacher to Loan Originator

Transitioning into a new career that appears to have a lot of complexity can be one of the most difficult challenges anyone can face, but having a predisposition toward relating information and complex ideas to people can be a big help in making such a move. That’s what happened to Kathy Muni, senior vice president and reverse mortgage specialist at Silver Leaf Mortgage in Centennial, Colo.

Kathy Muni, SVP and Reverse Mortgage Specialist at Silver Leaf Mortgage.

In an all-new edition of the “Origins” series of featured Q&A’s, Kathy sits down with RMD to discuss what it was like transitioning from her previous career in education as first a teacher and later school principal, and what it took to become a reverse mortgage product expert.

She also discusses the role she sees for reverse mortgage-specific loan officers in the future, and how a race against the clock in a foreclosure situation led to a couple saving their home with a reverse mortgage.

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How long have you been originating?

I began working in the mortgage industry in 2014 after 30 years in education and vocational ministry, but didn’t become a Loan Officer until 2015. I find working with seniors and helping them reach their financial goals for retirement very satisfying. The Silver Leaf Mortgage mission to love and serve our clients well is a perfect fit for my personality and skills.

How did you first learn about the reverse mortgage product, and what led to your initial realization that reverse origination was something you could do?

I learned about reverse mortgages when Silver Leaf Mortgage moved into that space and made the decision to make it the primary focus. I was immediately drawn to helping seniors because I am an educator at heart, and I saw that my ability to explain the program well was a great advantage to the borrowers. I see my role as providing accurate information to homeowners, their children, financial planners and attorneys so that the folks can make an informed decision.

What would you say was your earliest ‘big test’ that you found most challenging in your career as an originator?

Becoming an expert in reverse mortgages was a challenge initially, but I was determined to learn as much as possible and be the very best I could be. Early on, I learned to overcome the challenges of doing loans others turned away. I found how I could help folks in manufactured homes and those with acreage in rural areas, as well as homes in need of repair.

I have done well with a number of difficult properties since tackling my first. I am very thankful for the support from some excellent Account Executives with various lenders and from Matt Witt, the President of Silver Leaf Mortgage.

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 worked with a couple who were in a bankruptcy and facing foreclosure. We took on the loan with just a few days left before the foreclosure sale. We worked with the bank to postpone the sale date and were able to complete the loan and pay off the lender. It was so rewarding to be involved in saving their home! We like to think we specialize in helping change people’s lives, providing hope.

What would you classify as your biggest accomplishment in your work as a reverse mortgage originator?

Having been involved in hundreds of closings, I have never had a negative evaluation or review. The processes and systems at Silver Leaf Mortgage help us to close loans quickly and we try to give exceptional customer service to every client. I find the greatest satisfaction at closing in the smiles, hugs and relief on the faces of the people we help. It is an amazing feeling to think I am part of the answer to their prayers.

What do you think is needed for potential borrowers to be more fully educated about home equity release?

The mortgage and financial industry need to take the lead in becoming knowledgeable themselves. Loan Officers and financial planners must become more adept and informed in order to present the advantages of the HECM program and the various proprietary products. The Retirement Income Certified Professional (RICP) designation for financial planners provides strategies for incorporating a reverse mortgage into a retirement plan.

Current Mortgage Loan Officer licensing makes it too easy for originators who have no reverse mortgage training to counsel clients on reverse mortgage loans. Reverse mortgages should require a special designation and training. Loan Officers who originate the occasional reverse mortgage do the product and the industry a disservice.

The industry needs to have more stringent criteria for originating reverse mortgages so borrowers are not misinformed. Partnerships between expert reverse mortgage loan officers and the financial industry should be encouraged and [allowed to] grow.

Where do you see the reverse mortgage industry in 5-10 years?

Many more seniors are retiring with their largest asset being the wealth in their home, and are living longer in retirement. Often, they are also retiring with a mortgage payment still in place. Reverse mortgages need to be embraced as a solution to funding longevity. I believe that the industry will have developed and expanded to serve a wider range of seniors over the next 5-10 years.

As more and more Americans enter their senior years, there will be a growing need to help those seniors to remain in their homes and age in place. The increase of options in the proprietary space today speaks to the need for diversification, lower costs and additional options for seniors. I believe the industry will find creative ways to meet the needs of seniors.

What is the industry’s biggest challenge today, and how can it be overcome?

Emotional bias against the use of housing wealth and lack of education prevent many seniors from even contemplating what could be their best solution. Overcoming the myths about reverse mortgages and the bias of many professionals, as well as borrows, is the biggest challenge to the reverse mortgage industry.

The excellent work of Dr. Wade Pfau, Don Graves, the National Reverse Mortgage Lenders Association (NRMLA) and others is helping to educate the public. An increase in the number of articles in mainstream publications, provided they are accurate, will help our efforts to educate the public.

Complete the sentence: If I could change one thing about the reverse mortgage it would be: _____

To allow a non-borrowing spouse to remain in the home even if the borrower goes permanently into a nursing home. A reduction in the upfront MIP would also be a welcome change.

If I could erase one reverse mortgage misconception it would be: _____

Actually I would say there are two I would like to dispel equally. First, the bank/lender will own the home and there will be nothing for the heirs. Second is the perception that wealth accumulated in the home should never be used because somehow it is different than the wealth saved in other asset accounts.

These myths constitute two of the most pervasive misconceptions from both the public and even professionals who should know better.

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  • I felt the entire interview with Kathy Muni was excellent. Many great points were brought out in the interview.

    One area that stood out to me is an area that I have spoke about on many occasions, which is the lack of training for originators and especially new originators entering the reverse mortgage space.

    So many companies have gone to putting their forward loan originators in the position of also originating reverse mortgages. These originators have never had any reverse mortgage training nor do they have the ability to counsel our senior clients.

    Like Kathy said, “Reverse mortgages should require a special designation and training. Loan Officers who originate the occasional reverse mortgage do the product and the industry a disservice.” This is a very important statement Kathy made, it can’t be emphasized enough!

    Our industry needs to have more stringent criteria’s set for originating reverse mortgages. Not only for those new folks entering the arena, but for those that have been in the reverse mortgage space as well.

    Initial and on going training is so important, the reverse mortgage industry is complex, our borrowers deserve the best and do not need to be are misinformed in any way shape or form.

    I could go on and on on this subject, it is that important to our industry’s survival. Senior homeowners are our life Blood. We need to guide them with the up most knowledge about our industry and with plenty of patients shown toward them!

    John A. Smaldone
    http://www.hanover-financial.com

  • It is interesting to read that even a relative newcomer into the industry found her most rewarding origination was saving a senior from foreclosure. Once again we see an originator, who advocates that the future is with a higher income and asset category of senior than in the past, proclaim that the most rewarding origination was saving a senior from foreclosure. Of course nothing is mentioned about improving the financial position of a senior who was not needs based. Since she has only been originating since 2015, One must wonder how the borrower passed the credit history and property charge payment analysis.

    Ms. Muni proclaims: “I find the greatest satisfaction at closing in the smiles, hugs and relief on the faces of the people we help. It is an amazing feeling to think I am part of the answer to their prayers.” Yet this is story of those of us who were originating a decade before Ms. Muni began her experience as a reverse mortgage originator. This is the story of those of us who focus on our traditional prospect base, the needs based borrower.

    Ms. Muni tells us what is needed for prospects to become more knowledgeable about HECMs is the following: “The mortgage and financial industry need to take the lead in becoming knowledgeable themselves. Loan Officers and financial planners must become more adept and informed in order to present the advantages of the HECM program and the various proprietary products. The Retirement Income Certified Professional (RICP) designation for financial planners provides strategies for incorporating a reverse mortgage into a retirement plan.” Yet she fails to provide even one story about working with a RICP designee in educating and closing a HECM.

    To be clear, we have become so dependent on others fulfilling our responsibility to educate not just seniors but also the financial advising community, that we have seen fiscal year total endorsements fall to their lowest level since fiscal 2003! Fiscal 2019 endorsements were 35.3% lower than fiscal 2018, which is the lowest such drop ever in the history of the HECM program. Having RICPs has done nothing to increase the level of annual HECM endorsements. Pragmatically, people like Ms. Muni are still focused on our prior dominant financial income and asset category of senior prospects, needs based seniors (i.e., the house rich, other asset poor seniors).

    Until the industry turns its attention to education seniors in higher income and asset categories than our previous focus on needs based seniors, we will be proclaiming exactly the same things Ms. Muni does in the interview while seeing more and more years of fiscal year total endorsements of less than 50,000. Based on case number assignments, this fiscal year has started out marginally better than fiscal 2019. Perhaps proprietary reverse mortgages (PRMs) will fill in some of the gap but based on how PRM lenders have failed to voluntarily provide closing numbers on these products does not speak well for that train of thought.

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