Bringing “new blood” into the fold of the reverse mortgage industry will be critical to expanding the business footprint, but existing forward mortgage professionals should certainly keep in mind that reverse mortgages come with some very key differences from traditional mortgages prior to making an attempt to enter the reverse business.
This is just one perspective shared by Christina Harmes Hika, reverse mortgage loan originator at Amerifund Home Loans during a recent webinar event held primarily for forward professionals organized by RMD and HousingWire. Designed to introduce reverse mortgage industry concepts to professionals who have had limited interaction with the business, Harmes Hika helped to provide the perspective of a loan officer to the audience, particularly as someone who made a forward-to-reverse transition herself.
She offered insight into what helped her become accustomed to the nature of working in the reverse mortgage industry, as well as addressed common questions that could come up during someone’s research into the reverse mortgage business.
Commitment to reverse mortgage, consultation
When asked about the biggest factors that would help to determine the success of a new reverse mortgage loan officer, Harmes Hika was quick to define a commitment to the product category and the senior borrower as a pivotal component to success.
“I’ve worked with and trained a lot of loan officers to do reverse, so I’ve seen hundreds of loan officers go through this process,” she says. “The largest indicator to me is commitment. It’s so different [from the forward side] and there’s so much different terminology. I found when I did regular loans and had first started to do reverse, my mind was filling up with more reverse information. It needed to, because there’s a lot of intricacies to this loan.”
Because of those intricacies, it takes a smart loan officer to be able to grasp the differences and extrapolate the specific details from their understanding of forward mortgages when necessary, she says. Another pivotal component to reverse success is the understanding of reverse mortgages as a consultative process with senior borrowers.
“When you’re a reverse loan officer, you never want to get someone into a reverse mortgage when it’s not a good fit,” she says. “We already have enough bad reputation from past misunderstandings, and there are so many misconceptions out there. […] Our job is to truly educate borrowers and to make sure it’s the right fit.”
This applies to the borrowers’ financial situations, but it also applies to the other components of a senior’s life. If a potential borrower has mobility issues, for instance, such a topic rarely comes up in forward mortgage conversations, she explains. She then offered examples of the kinds of questions that may come up with a reverse mortgage borrower that are not likely to emerge in a forward conversation.
“In a regular mortgage, I never asked how many stories your home is,” she says. “If you or your spouse had a disability, could you live there for the rest of your life? Do you want to live there for the rest of your life? Do you have the social circles that will keep you happy? Is your family close? Do you think you may sell in five years, 10 or 15 years? Because that will affect how I structure a loan, and I think that’s important a lot of originators.”
Well after a reverse mortgage closing
This is also a relationship that, in many cases, could extend years beyond the closing of a reverse mortgage loan.
“A regular mortgage is kind of a one and done,” she says. “Of course, you stay in touch with your contact to keep the relationship up, but you’re not needing to make sure the client is safe and secure for the rest of their life in this home. That’s not your job. With reverse, that kind of is your job, because if you get someone into a reverse where it’s really not a good fit, that can be disastrous for the rest of the borrower’s financial situation.”
Since the reverse mortgage industry is much smaller than its forward counterpart, ensuring that borrowers have a good experience is important both for their satisfaction, and to ensure that current reverse mortgage professionals do what they can to avoid adding to any reputational concerns that their borrowers may have.
“We’re a small industry, so we want to protect all of our reputations by only get getting the right people into the right reverse mortgages,” she says. “And that’s asking so many more questions and educating so much more than I ever did doing regular forward loans.”
It is also relatively common for reverse mortgage loan originators to serve as a regular point of contact for the borrower well into the future, with questions about their loan’s servicing or any other potential topics the borrower might feel the need to address.
“I recently had a voicemail from a client I closed with three years ago,” she says. “And it was a legitimate question she had, of course, and I think she’s probably called me once a quarter for the last three years. I don’t know where her memory is, but that is a factor in this business. You may want to consider [before jumping into reverse]: are you going to be there for your clients? And then, the referrals come from that too. That’s kind of a nice factor, but there’s not a great source of information that is widely known about [reverse mortgages]. so your clients are going to come back to you, and so will their heirs.”
The importance of family in the conversation
Oftentimes when an heir or other family member comes to the loan originator with questions about the reverse mortgage, they may be armed with inaccurate information. This is not something to attack, however, as in virtually all cases that family member means well and intends to act in the interest of the potential borrower.
“They [may not have been] there at the initial conversation, so they don’t understand their parents’ motives,” she explains of those scenarios. “And suddenly, there’s a mortgage due and they don’t understand why it was so beneficial for their parents the whole time. So, that’s another piece of the puzzle: if you can bring the family or advisors or referral partners in on the conversations, then everyone understands why we’re doing this. That way, in 20 years when the loan ends, they’re happy about it.”
Find the full event at HousingWire.