People in the reverse mortgage industry often hear stories about how clients or potential borrowers had their minds changed about getting a Home Equity Conversion Mortgage (HECM), or something like it, after simply taking the time to learn more about it. Over the course of previous editions of RMD’s “Origins” series, where we chart the path of reverse mortgage originators into the industry, we occasionally hear about how loan officers themselves went on a similar path toward discovering these products and their potential benefits.
Such is the case with Loren Riddick, national director of reverse lending at Thrive Mortgage, LLC in Alcoa, Tenn. His story has also taken an interesting path, though, because Mr. Riddick has quickly become a visible reverse mortgage enthusiast, recently relating a story at the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting about “spreading the word of reverse” to his clients.
To learn more about the journey that led to his strong proclamations about reverse mortgages, RMD asked Loren to take the hot seat so we could chart his origin into the reverse mortgage industry.
How long have you been originating?
Over 21 years, the past seven in reverse.
How did you first learn about the reverse mortgage product, and what led to you to believe that reverse origination was something you could do?
I had heard about the program in the past, but truly dismissed it as ‘snake oil and voodoo’ and wanted nothing to do with it, much less bring it into my forward mortgage practice. However, at the urging of a very successful engineer client, I reluctantly started learning and digging into the program from the most skeptical lens.
I attended my first NRMLA conference in San Antonio in 2012, and the rest is history. Now, I’m a proud Certified Reverse Mortgage Professional (CRMP) and ambassador of this amazing program.
What would you say was your earliest big test that you found most challenging in your career as an originator?
Just getting over the ignorance first, and then the many differences between the forward and reverse mortgage arenas.
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?
There’s not any specific situation that I will name, but there have been many, countless times where we can easily identify the undeniable benefits of the program for a given senior before needing to deal with family and/or folks rendering advice.
Oftentimes, this advice is not from the perspective of someone trying to help the senior, but those that have selfish motives in mind that have nothing to do with the senior’s perspective or needs. In these situations, I feel that many would agree that there is not a ‘secret sauce’ for this. We can only do our best to shed truth and light, and hope that this will at least tip the scales away from selfishness and greed, etc.
What would you classify as your biggest accomplishment in your work as a reverse mortgage originator?
Basically, going from my former perspective of a once negative, resistant and ignorant mind to one that not only educates fellow forward loan officers, referral partners, and beyond…but inspires them to spread the great news to others.
What do you think is needed for potential borrowers to be more fully educated about home equity release?
Continuing to fight the good fight, and sharing story after story in a way that eventually gets through. Folks are starting to hear more and more great stories of the power and freedom that is made possible through leveraging one’s equity. Understanding that regardless of one’s faith, there is no way to take one’s equity with them unless they talk to a mortgage or real estate professional.
Once one realizes that at 62 years or better, continuing to make a mortgage payment on a refinance or a purchase just doesn’t make any sense at all. Why would anyone truly want to do this?! Studies reveal that less than 1 out of 100 children or heirs want to live in the home after the parents leave. So many other strategies could be considered that are much more attractive for both short- and long-term vision.
Where do you see the reverse mortgage industry in 5-10 years?
I truly see a very bright future for the industry. Given the fact that there are a reported 10,000 to 12,000 seniors turning 62 every day and over $7 trillion in senior equity, along with the fact that most are not prepared for retirement, there is a very bright future. Moreover, the emerging market for portfolio reverse products only furthers this premise and excitement.
What is the industry’s biggest challenge today, and how can it be overcome?
Two words: education and awareness, it’s as simple as that. This program is undeniable to those that would simply take the time to learn and apply for this amazing tool. Again, just like with me, once one takes his or her fingers out of their ears and opens their eyes…the potential results are just undeniable. I have yet to lose that argument with anyone.
Complete the sentence: If I could change one thing about the reverse mortgage it would be: _____
Change the head-scratching guideline that unlike its forward counterpart, we can’t pay off debt from proceeds to bring a given senior’s situation in line to qualify. In the forward world, the present debt ratio is irrelevant, as it should be. We only focus on the proposed debt ratio percentage.
On the HECM side of things, we can’t dismiss any of the debt that would quickly get eliminated by cash in hand at closing like in the forward arena. Even though there are some avenues and arguments for compensating factors, it just makes no sense whatsoever that a client can’t use those proceeds to eliminate debt concerns. It’s craziness.
Fortunately, we now have some portfolio products that have closed this gap of concern, but this needs to be addressed in the world of the HECM.
If I could erase one reverse mortgage misconception it would be: _____
That there is no difference whatsoever in homeownership between a forward and reverse mortgage loan. One does not give up ownership on either. When folks are asked, ‘Until you pay your forward mortgage off, who owns your home: you or the bank?’ 99% of them say, ‘The bank!’
Then, I ask (especially to a Realtor partner) that if that’s the case, when is the last time that you had to get the bank to sign the purchase contract on a sale? Or, when did you have to send your client to the bank to get permission to do a home improvement project?
Answer on both: never!