Friday Round-Up: The $1 Million Reverse Mortgage Retirement Strategy

Congrats on making it to another Friday. The weekend is in sight! But before you take off, check out what happened in reverse mortgage news this past week:
Study Makes Case for $1 Million Reverse Mortgage Retirement Strategy—Several studies have already demonstrated the potential benefits to be reaped when using a reverse mortgage as part of a coordinated retirement strategy, but one recent case study further expounded on the efficacy of the reverse mortgage line of credit.
Selleck TV Spots Push AAG’s Reverse Mortgage Marketing to New Heights—Following the launch of a new reverse mortgage commercial featuring Tom Selleck, American Advisors Group (AAG) has seen performance that is better than any other ad they’ve had in the past, the company told RMD this week.
Financial Planning: The Downside of Using Home Equity for Retirement—In a recent post, two financial professionals discussed why they don’t typically view home equity as a viable solution for their clients’ retirement income planning strategies. Though the pros acknowledged reverse mortgages as a potential resource, they primarily view the home as a place to live during retirement, rather than as part of a client’s nest egg.
Lender Rebrands Reverse Mortgage Team to Capture New Market Opportunities—Seeking a more “organic” pathway for growth as industry originations stagger, the reverse mortgage division of one regional lender has rebranded itself in efforts to take advantage of collaborative opportunities with the company’s forward mortgage business.
Despite Market Uncertainty, Reverse Mortgage Lender Bullish on U.S. Expansion—The most recently proposed rule changes for reverse mortgages create uncertainty for the future of the industry, but that isn’t raising the alarm on one California-based lender’s plans for a 47-state expansion this year.
Written by Jason Oliva


Reverse Mortgage Volume Trends Downward as Some Markets Ride High

Reverse mortgage volume is lagging behind its year-ago levels, and that’s no secret. But while the greater industry feels the strain of sluggish endorsement production, certain markets are brimming with activity, recent industry data indicates.
Through the first half of 2016, endorsements of Home Equity Conversion Mortgages (HECMs) through totaled 24,634 units, a decrease of 13.1% compared to the same year-ago period in 2015, according to most recent analysis from Reverse Market Insight.
At the midpoint, it appears as though 2016 is on track to be be one of the lowest volume years the industry has seen in the last decade. And with July’s numbers coming in at 3,534 units, the volume trend line is primed for an ever further dip below recent comparable years. Reverse Mortgage Volume Trends Downward as Some Markets Ride High
(Source: Reverse Market Insight)
More than half of the top-10 states tracked by RMI report year-to-date declines in endorsement volume through June, with New York posting the greatest year-over-year decline of 36% compared to the first half of 2015. In terms of unit count, New York ranked fourth among all states with 1,109 loans.
Other top-producing states, such as Pennsylvania and New Jersey, reported big drop-offs of 35.2% and 32.2%, respectively, in their endorsement volume through June.
Meanwhile, California, which continues to rank first among all states in terms of unit count with 5,552 loans YTD through June, reported a growth of 4.4% compared to its year-ago endorsement production.
But the state seeing the biggest boost in production was Colorado, whose 900 loans throughout the first half of 2016 represents an increase of 27.3% compared to last year.

The hefty gain is due in large part to Colorado’s largest city, Denver, which ranked second among the top-10 city’s for endorsement volume. Through June, Denver reported 208 loans, a 65.1% growth compared to its year-ago volume. The Mile High City came in 61 loans short of Los Angeles and just three loans over Houston, which reported 0.5% growth in its YTD volume through June.
The City of Austin, Texas, also deserves honorable mention as it “busted” into the top-10 city rankings with 129 loans during the first six months of 2016, representing an increase of 34.4% compared to the same period last year.
In total, the top-10 cities accounted for 1,724 loans YTD through June, a decline of 9.2% compared to last year. The decrease is understandable, considering that six cities reported lower endorsement volume compared to their year-ago production.
View the RMI report to see where other reverse mortgage markets stacked up during the first half of 2016.
Written by Jason Oliva


Financial Planner Lists Top-10 Reverse Mortgage Strategies to Fund Retirement

There are numerous ways to use a reverse mortgage, which is why it is often seen as a complicated product to those who are unfamiliar with it. There are also many strategies for a reverse mortgage that can be helpful in funding retirement, explains a recent post on Dirk Cotton’s blog, “The Retirement Cafe”.
“Approaching a retirement plan from a strategic perspective has several advantages,” explains Cotton, who frequently writes about personal finance topics and provides retirement planning advice as a fee-only financial planner. “In effect, strategic planning identifies and answers the larger problems first, and only then considers the best tactics to achieve those objectives.”
Cotton lists a number of strategies for using a reverse mortgage to help fund retirement. Some of them include a refinance strategy, a term and tenure strategy and a HECM for purchase strategy.
The refinance strategy, is one of the most common uses of a HECM, he says. It is simply the difference of paying a mortgage payment each month versus receiving a check every month instead. Though, Cotton does point out that if a homeowner is looking to pass their home without debt to their heirs, they should go the conventional mortgage route, but if the homeowner is ok with using built up home equity to pay bills, then a reverse mortgage could be perfect for them.
Using the term or tenure option when taking out a HECM is another option Cotton suggests.
“They [tenure payments] are similar to an annuity, except that annuities pay as long as the annuitants are still living,” he says in the post. “Another major difference between tenure payments and annuity is that the retiree may ‘leave money on the table’ if she dies soon after purchasing an annuity. If that happens with a HECM, there will be no such loss because the borrower will simply have borrowed less of her home equity.”
The HECM for purchase is also brought up in the blog as another way to potentially fund retirement. He suggests this option if a homeowner is looking into purchasing a new home, especially if the homeowner is already in retirement, because it can sometimes make it more difficult to qualify for a loan when someone does not have a steady income like they would have had in their working years.
These are just a few of the tips Cotton shares for using a reverse mortgage to help make retirement a bit less stressful. See what his other strategies are in his most recent post on The Retirement Cafe.
Written by Alana Stramowski


Financial Planner Lists Top-10 Reverse Mortgage Strategies to Fund Retirement

There are numerous ways to use a reverse mortgage, which is why it is often seen as a complicated product to those who are unfamiliar with it. There are also many strategies for a reverse mortgage that can be helpful in funding retirement, explains a recent post on Dirk Cotton’s blog, “The Retirement Cafe”.
“Approaching a retirement plan from a strategic perspective has several advantages,” explains Cotton, who frequently writes about personal finance topics and provides retirement planning advice as a fee-only financial planner. “In effect, strategic planning identifies and answers the larger problems first, and only then considers the best tactics to achieve those objectives.”
Cotton lists a number of strategies for using a reverse mortgage to help fund retirement. Some of them include a refinance strategy, a term and tenure strategy and a HECM for purchase strategy.
The refinance strategy, is one of the most common uses of a HECM, he says. It is simply the difference of paying a mortgage payment each month versus receiving a check every month instead. Though, Cotton does point out that if a homeowner is looking to pass their home without debt to their heirs, they should go the conventional mortgage route, but if the homeowner is ok with using built up home equity to pay bills, then a reverse mortgage could be perfect for them.
Using the term or tenure option when taking out a HECM is another option Cotton suggests.
“They [tenure payments] are similar to an annuity, except that annuities pay as long as the annuitants are still living,” he says in the post. “Another major difference between tenure payments and annuity is that the retiree may ‘leave money on the table’ if she dies soon after purchasing an annuity. If that happens with a HECM, there will be no such loss because the borrower will simply have borrowed less of her home equity.”
The HECM for purchase is also brought up in the blog as another way to potentially fund retirement. He suggests this option if a homeowner is looking into purchasing a new home, especially if the homeowner is already in retirement, because it can sometimes make it more difficult to qualify for a loan when someone does not have a steady income like they would have had in their working years.
These are just a few of the tips Cotton shares for using a reverse mortgage to help make retirement a bit less stressful. See what his other strategies are in his most recent post on The Retirement Cafe.
Written by Alana Stramowski


Reverse Mortgage Jobs Galore as Lenders Ramp Up Hiring Efforts—Apply Today

Reverse mortgage lenders nationwide continue their search for skilled professionals to join their teams as summer comes to a close and we head into the last remaining quarter of 2016.
This week’s RMD jobs board includes a variety of positions for reverse mortgage professionals, from direct endorsement underwriters and originators, to loan processors and branch managers. Positions for account executives and sales managers are also in demand, but that’s not all.
Lenders now hiring include Reverse Mortgage Funding, The Money House, HECM Senior Financing, iReverse Home Loans, Finance of America Reverse, among other top lenders nationwide.
Click the following opportunities that are now open to find out more. Or for a complete list of jobs, visit Reverse Mortgage Jobs Online.

Direct Endorsement Underwriter – Reverse Mortgage Funding LLC
Loan Processor – Reverse Mortgage Funding LLC
DE Underwriter – ReverseMortgages.com, Inc.
Outside Reverse Mortgage Originator – The Money House, Inc.
Outside Reverse Mortgage Originator – The Money House, Inc.
RMS and/or Branch Sales Manager – HECM Senior Home Financing
Reverse Mortgage Loan Officer (Sacramento, Calif.) – iReverse Home Loans
Reverse Mortgage Loan Officer – iReverse Home Loans
Senior Reverse Mortgage Loan Officer – iReverse Home Loans
Processor (Hauppauge, N.Y.) – Finance of America Reverse
Reverse Mortgage Loan Officer – Liberty Home Equity Solutions
Reverse Mortgage Loan Originator – Home Point Financial
Reverse Wholesale Account Executive – Home Point Financial
Reverse Branch Manger – HighTechLending dba AmericanSenior
Inside Reverse Mortgage Loan Officer – HighTechLending dba AmericanSenior
Reverse Mortgage Loan Processor – HighTechLending dba AmericanSenior
Reverse Mortgage DE Underwriter – HighTechLending dba AmericanSenior
Reverse Loan Funder/ Doc Drawer – HighTechLending dba AmericanSenior
National Retail Sales Manager – Nationwide Equities Corp.

Visit our website for additional opportunities in the reverse mortgage industry.
The best and the brightest read RMD. Want them to join your team? Post your jobs to Reverse Mortgage Jobs Online today!
Written by Jason Oliva


Lender Rebrands Reverse Mortgage Team to Capture New Market Opportunities

Seeking a more “organic” pathway for growth as industry originations stagger and market uncertainty looms, the reverse mortgage division of one regional lender is rebranding itself in efforts to take advantage of collaborative opportunities with the company’s forward mortgage business.
This week, Plymouth, Mich.-based Success Mortgage Partners announced it has rebranded its reverse mortgage division as Reverse Mortgage USA. The company’s former reverse operations, which included 1st Financial Reverse Mortgages in Mich. and Franklin Funding in South Carolina, are now united under the new unified brand.
As part of the rebranding, Jon Maiolatesi of Plymouth, Mich., has been named Director of Operations and David Heilman of Charleston, S.C., has been named Director of Sales for Reverse Mortgage USA.
The rebrand not only serves to bring both 1st Financial and Franklin Funding under one consistent banner, but is also meant to better align the reverse mortgage operations with Success Mortgage Partners in hopes of utilizing the relationships and loan officers the company has fostered in its forward mortgage segment.
“We wanted to rebrand alongside Success Mortgage Partners so there is a better understanding that we are affiliated with the company,” Maiolatesi told RMD.
It’s also an internal rebranding for the united reverse mortgage division, especially as it looks to grow its distribution channel through collaborations with Success’ forward mortgage personnel, particularly as it relates to the referral businesses they have established with non-mortgage professionals such as real estate agents and financial planners.
“Part of the goal is we’re trying to tap into some of [Success’] forward mortgage loan officers and get more of a relationship with that forward side,” Maiolatesi told RMD. “We want to roll out the rebrand internally to get an audience with people at Success and the people they do business with in their daily practices who we weren’t tapping into before.”
Success Mortgage Partners has over 500 employees, the vast majority of which the reverse mortgage operations of 1st Financial and Franklin were not connecting with prior to the rebrand. Conjoining the reverse mortgage operations under a singular entity now presents a greater opportunity to facilitate collaboration with the forward mortgage business.
“We feel strongly that the forward mortgage market needs this [HECM] product, and this is a turnkey way for Success to offer it,” Heilman said. “We already have the infrastructure in place to handle the volume, as well as loan officers.”
Growing volume ‘organically’
Doing business as Success Mortgage Partners, the companies ranked among the top-50 industry lenders nationwide with 48 Home Equity Conversion Mortgages year-to-date through July 2016, according to recent industry data tracked by Reverse Market Insight (RMI).
Compared to last year, the company’s production through the first seven months of the year is down 40%, but the reduction is characteristic of the broader reverse mortgage market today, where overall industry volume though July is roughly 16% lower than its year-ago level, according to RMI data.
With lingering policy changes to the HECM program currently awaiting further action from the Federal Housing Administration, the industry could face continued downward pressure on origination volume if adverse rules take effect this year.
By utilizing the forward side of Success Mortgage Partners as an additional distribution channel, Reverse Mortgage USA plans to use this strategy as an avenue to support its volume if the market environment becomes more challenging than it is today.
“It’s difficult to grow volume without going out and buying leads,” Maiolatesi said. “By having an internal distribution channel right at our fingertips, we can curb what’s going on in our [reverse] industry and create more organic volume, rather than spending a lot of money on marketing and leads.”
Reverse Mortgage USA is licensed to originate reverse mortgages in eight states, including Michigan, Illinois, Indiana, South Carolina, Georgia, Florida, Texas and Wyoming. Success Mortgage Partners carries licenses in all of these states, with the addition of North Carolina.
The Reverse Mortgage USA brand is not to be confused with the Texas-based lender of the same name, which was eventually rolled into American Advisors Group in 2014. Nor is the new brand an offshoot of Cherry Creek Mortgage’s reverse division, 1st Reverse Mortgage USA.
“As far as what we’re trying to brand, it’s off of the Success Mortgage Partners image—[the brand] is not trying to imitate anyone else out there,” Maiolatesi said. “It has been a plan of ours to roll this out and use this new identity to build off of the reputation that Success Mortgage Partners has built over the last few years.”
While the company aimed to establish a memorable name for the new brand, its main focus is the internal expansion of its capabilities
“We have a retail team; we certainly want to expand that, but our focus is to be a clear part of Success Mortgage Partners, which is growing by leaps and bounds on the forward side of the business,” he said. “We want to parlay that into more reverse mortgage opportunities.”
Written by Jason Oliva


U.S. News: Reverse Mortgages Take Typical Retirement Funding ‘Outside the Box’

Independent retirement accounts (IRAs) and 401(k)s have long been popular strategies for funding retirement. But with higher health care costs and other expenses rising to the surface for many retirees, they may be forced to look at non-traditional ways to fund retirement, including reverse mortgages, according to a recent article by U.S. News & World Report.
Diversifying income in retirement is vital, says Kimberly Foss, founder and president of Empyrion Wealth Management in Roseville, Calif., in the article.
There are small things that the article recommends a retiree could do to bring in some extra income such as reselling items on eBay or Amazon or selling off assets like second vehicles, RVs and other items that are no longer needed that could bring in a significant amount of income.
A more permanent and reliable option is taking out a reverse mortgage. For homeowners 62 and older, a reverse mortgage gives a homeowner the opportunity to receive regular payments based on the equity in their home, the article says.
“Since the house must often be sold to pay off the loan, having an upfront conversation with family members can help avoid any unpleasant surprises later.”
The unpleasant surprises are likely referring to the fact that if the homeowner passes, the loan becomes due and payable, meaning the homeowners heirs will be responsible for paying the loan. This is usually done with the sale of the home, but could done with saved or gift funds.
Read the full article on U.S. News & World Report.
Written by Alana Stramowski


Study Makes Case for $1 Million Reverse Mortgage Retirement Strategy

Several studies have already demonstrated the potential benefits to be reaped when using a reverse mortgage as part of a coordinated retirement strategy, but one recent case study further expounds on the efficacy of the reverse mortgage line of credit.
With the arrival of new program changes and consumer protections in recent years, the reverse mortgage industry has strived to assert the legitimacy of the Home Equity Conversion Mortgage (HECM) as a viable retirement income planning tool.
A variety of financial planning research published within the last decade has added layers of credibility to reverse mortgages as a financial resource that can help “buffer” against volatility in investment markets, increase retirement spending and, above all, significantly improve the longevity of a retiree’s retirement income.
The crux of these strategies invariably requires retirees to obtain a reverse mortgage line of credit early in retirement. By doing so, retirees can accumulate a greater share of home equity over time, which they can use to supplement their retirement spending and help shore up losses in their investment portfolio during years of negative market returns.
“In this strategy, the reverse mortgage credit line is used to offset the ‘adverse sequence of returns,’” states a case study published by Barry Sacks and Mary Jo Lafaye this year and further discussed by Tom Davison, a wealth manager who has frequently researched and written about reverse mortgages in the context of financial planning.
In demonstrating the coordinated planning strategy, which was previously introduced by Barry and Stephen Sacks in the Journal of Financial Planning in 2012, Sacks and Lafaye establish a retiree with a $500,000 equity/bond portfolio split 50/50. Beginning in 1973, the case study examines a 30-year spending horizon, incorporating an initial 5.5% withdrawal rate increasing at a 3.5% inflation rate.
Sacks and Lafaye then compared two scenarios involving the same retiree: one scenario in which the retiree obtains a reverse mortgage only after his investment portfolio is depleted; and a scenario in which the retiree takes a reverse mortgage line of credit early in retirement, only drawing from the credit line after suffering negative returns on his portfolio.
Study Makes Case for $1 Million Reverse Mortgage Retirement Strategy
(Click image to enlarge)
Utilizing a reverse mortgage as a last resort strategy, the retiree ends up depleting his portfolio in 1996—six years short of the 30-year retirement horizon, according to Sacks and Lafaye.
On the other hand, by tapping into the reverse mortgage loan proceeds after suffering negative returns, the same retiree is able to fund their retirement for the full 30-year period. What’s more is that in this scenario, the retiree’s total portfolio value has grown in excess of $1 million after 30 years.
Taking the difference between the total portfolio value and the accumulated reverse mortgage loan balance, the retiree ends up with a net $394,991, whereas under the “last resort” strategy the same retiree is left with a $538,773 reverse mortgage loan balance and no money in the investment portfolio to offset this debt.
“Using the simple coordinated strategy has dramatic results: they don’t run out of money,” Davison writes in a recent post on his blog, Tools for Retirement Planning. “Their estate size increases over $900,000. Rather than the portfolio exhausting in the 24th year, it lasts through the 30th year, with a $1,000,000 balance.”
Taking the reverse mortgage was critical to the long-term sustainability of the retiree’s portfolio, especially during the first decade of retirement when the portfolio suffered various years of negative returns in close succession.
“The strategy is simple to state and simple to use,” Davison writes. “It is a direct attack on investment risk, and especially sequence of returns risk. Individual homeowners can do this!”
As the research shows, homeowners need to obtain a reverse mortgage line of credit as early in retirement as possible for the coordinated planning strategy to be effective.
“Naturally, the larger the reverse mortgage line of credit is, the more it can help the homeowner,” writes Davison.
Written by Jason Oliva


Forbes: Reverse Mortgage for Home Purchase Can Save Retirement

There are only 21% of workers who are very confident that they will have enough money to live comfortably during retirement and over half of Americans have been labeled “at risk” of not being able to keep up with their lifestyle expenses in retirement, according to EBRI, cited in a recent article from Forbes.
But, there are options to secure retirement, including paying off a mortgage early, moving in with other family, downsizing, or even using a reverse mortgage, according to the article contributed by Scott Spann, a certified financial planner at Financial Finesse, a financial education company.
“A home equity conversion mortgage, or reverse mortgage, is a type of mortgage that allows homeowners to borrow against the equity in their primary residence,” Spann writes. “They differ from a forward mortgage in that no monthly payments are required. For this reason, reverse mortgages provide a potential way to buy a lower cost home or one that is more suitable to your retirement lifestyle with no monthly payments.”
Though the article does not mention that with a reverse mortgage, borrowers must keep up on other household expenses such as taxes and general upkeep, it does provide a link to learn more about a reverse mortgage for purchase.
The solution of relocating to a foreign country in retirement, or purchasing an RV to travel the country or boat to live in, are other ways the article shares how retirees who are strapped for cash may be able to save money in retirement.
Read the full article from Forbes.
Written by Alana Stramowski


ReverseVision Expands Credit Report Tools for RV Exchange Users

Reverse mortgage originators who use ReverseVision’s RV Exchange (RVX) loan origination software will now have access to additional credit reporting services provided by Informative Research, one of the nation’s oldest and largest credit reporting agencies.
The completion of ReverseVision’s integration with Informative Research, announced Tuesday, enables RVX users to to order Premier Credit Report, Informative Research’s version of the tri-merge credit report that has become standard in the mortgage industry.
“Through this integration with Informative Research, RVX users will experience ease-of-access to the critical credit information required to identify qualified borrowers,” said ReverseVision Vice President of Sales and Marketing Wendy Peel in a press release.
The integration with Informative Research is the latest update to the RVX system this year. Earlier this summer, ReverseVision integrated the credit reporting services of Factual Data into RVX and expanded the system’s real estate tax and flood services through an integration with LERETA, a national provider of property tax data and flood hazard status information.
Informative Research enables lenders to customize how credit information is presented in a borrower’s report. The company prides itself on providing dedicated customer support specialists focused on helping lenders maintain high levels of borrower service.
“With this integration, Informative Research and ReverseVision assure their mutual customers unmatched access to critical credit data needed for originating reverse mortgages,” said Informative Research Chief Operating Officer Stan Baldwin in a press release. “Further, the integration helps support our unceasing commitment to improving lender workflow and streamlining credit reporting capabilities.”
Founded in 1946, Garden Grove, Calif.-based Informative Research provides complete residential mortgage credit reports. Organizations such as Fannie Mae among other top lenders have relied on the company and its proprietary Keystone logic system, which allows individual reports from the three credit bureaus to be merged into an accessible format with duplicated or incomplete listings removed for lender efficiency.
While a borrower’s ability to qualify for a reverse mortgage is not solely dependent on his or her numerical credit score, the Department of Housing and Urban Development’s Financial Assessment rules require reverse mortgage lenders to carefully consider the borrower’s ability to meet financial obligations, said Peel.
“That’s why offering lenders the ability to order credit reports from within RVX has a significant impact on efficiency,” Peel said.
Credit information supplied by Informative Research is available in RVX as of the system’s June 16 update.
Written by Jason Oliva