Finding dedicated reverse mortgage personnel that have been trained strictly in the reverse discipline can be a difficult thing for recruiters at various lenders, which is why it’s generally common for some of those lenders to find loan officers who have been trained and working on the forward side through something of a “conversion” process.
Bringing a forward loan officer up to speed about the intricacies and nuances of selling reverse mortgages can be quite a disruptive ordeal for everyone involved, and loan officers who have gone through the transition have previously expressed to RMD the general stress of that learning process.
In an effort to potentially assist reverse mortgage lenders in streamlining the process of transitioning forward loan officers into the world of reverse, three originators offered their own tips to RMD that they would have liked to have known before each of them started the processes of their own transitions.
Keep reverse mortgage product misconceptions in mind
When Brandi Braley of Neighborhood Mortgage in Bellingham, Wash. had been originating forward mortgages for just over half a year, she was approached by her company’s retiring reverse mortgage specialist in order to train with him and eventually take over for him. Originating reverse mortgages had never crossed her mind before she was approached, she previously told RMD, but she feels it would’ve been beneficial to be more fully aware of the product misconceptions that have continued to plague the reverse industry as a whole.
“I think that the main thing that people really need to have a grasp on is the fact that there are a lot of misconceptions out there about reverse mortgages,” she tells RMD. “I think that if you are going to get into the reverse world you really have to do your research on the areas that have been issues in the past, and you need to be able to explain to the borrower what the differences are in the reverse mortgages of today.”
One of the most perennial misconceptions about reverse mortgages – concerning who has ownership of the home – continues to be an issue for the industry to tackle with, and Braley has to contend with it on a regular basis, she says.
“The top thing that people say to me when I mention a reverse mortgage is that ‘the bank is going to own your home and take all of your equity,’” she says. “You need to know how to respond to these questions to be able to fully explain them and put your client at ease.”
Having a training period in which she was able to hear all of the misconceptions before taking things over herself was an invaluable experience in preparation for taking the lead at her office’s reverse mortgage operation, she says.
“I spent about six months sitting in on meetings with my mentor and his clients before going out on my own to do a reverse mortgage application,” Braley says. “In that six month period of time, I was able to hear all of the questions that the borrowers were concerned about and how my mentor was able to set their minds at ease.”
Build a strong reverse referral system
Keeping the uniqueness of the reverse mortgage product in mind, particularly for those who come into it from the forward side, is essential since it means that the way lead sources are cultivated will have to change. This is according to reverse mortgage industry veteran John Luddy, SVP of reverse lending at Norcom Mortgage in Avon, Conn.
“I think the most important thing to remember when you’re moving from forward to reverse is that you now have a new product, and you might have different lead sources,” he tells RMD. “Not only do you have to think about that as a salesman – a new product to understand, and again, [having] product knowledge that gives you the courage to sell it – and then you might find new lead sources. If you’re doing forward loans, your main lead source might be Realtors.”
Unless a loan officer conducts an inordinate amount of Home Equity Conversion Mortgage (HECM) for Purchase loans, Realtors are not likely to be a primary lead source when transitioning into reverse, Luddy says.
“Remember that you have to improve your network, and be a ‘perennial’ and not an ‘annual,’” he says. “You can fall victim to this in the forward world, particularly when it comes to refis. An annual uses all of its energy to show off with a big burst of color, it has shallow roots and dies in a year because it doesn’t have a strong root system. As a perennial, the first year it sleeps. The second year, it creeps. The third year, it leaps because it’s built a strong network of root systems.”
A strong referral system takes time to build, but will pay off significantly in the long run with a more steady stream of business, Luddy says.
“And that’s what you’ve got to think about when you’re transitioning from the forward world into the reverse world, you’ve got to build a career and not just be a refinance annual,” he says. “You’ve got to build a strong system of referrals.”
Pair up new reverse LOs with a long-served mentor
For the first 14 years of his career, Loren Riddick, national director of reverse lending at Thrive Mortgage, LLC in Alcoa, Tenn. served exclusively in the forward space before making his transition to the reverse side of the business. He describes a stressful transition that had a lot of moving parts, so he was quick to identify what he would’ve found most helpful in making the transition himself.
“Now, this is going to sound really crazy, but I would have liked to have had me,” he says. “I would have liked to have had someone that can do the heavy lifting, so that all I would be responsible for is making the connections, the introductions, introducing them to someone that knows [about reverse mortgages], that’s proficient in the discipline and properly licensed for a given state, and someone who is able to help them along the way so that I, as the student, would earn while I learn.”
The ability to have a long-serving reverse mortgage mentor would have helped Riddick with essential guidance in honing the reverse-specific aspects of his craft, he says.
“I did not have that,” he says. “I was going through the jungle with a machete, finding the differences out for myself. To get the message [about the uniqueness of reverse mortgages] through to a top-producing mortgage practice on the forward side is very difficult.”
A top-producing forward originator has spent a significant amount of time and effort building a trustworthy brand, Riddick says, and tossing them into the proverbial “deep end” of reverse mortgages can be very disruptive.
“That particular person has spent a lifetime building their brand of trust, integrity, and good name,” he says. “So, for that pro to trust their name with a person and/or a program that they’ve never been introduced to, that’s a tough deal. And, it can only be done I believe, by an eyeball-to-eyeball conversation, or close to it. This, along with a powerfully documented track record of success and experience insures a smooth road for everyone.”