One Reverse Mortgage Lender’s New Approach to Training Fresh Blood

Training and onboarding set the foundation of a good employee, but without a solid personality and positive attitude, molding a successful loan originator can be a challenge.
Reverse mortgage professionals can be unveiled in many types of individuals with the proper training combined with solid core values, says Mike Crossett, executive vice president at The Federal Savings Bank, which is currently in the process of launching a new training program for industry loan officers.
The Federal Savings Bank launched Mortgage Banker University a few years ago and are soon rolling out the same program specifically for Home Equity Conversion Mortgage training. The program will be mainly for fresh new talent.
The program
Mortgage Banker University will be held at The Federal Savings Bank’s headquarters in downtown Chicago and is a comprehensive, fast-paced program, explains Crossett.
“The program will teach all of the technical aspects of mortgage lending for the first 30 days,” he says.
Then the next 90 days are set aside for a formalized mentor program. This is when students will attend classes 2-4 days a week for two hours per session. In these classes students will receive additional tactical information that can help grow a reverse mortgage loan origination business. The classes will focus a lot on how to become a referral powerhouse.
“I believe the larger growth for the reverse mortgage industry is in working together with a senior’s existing group of advisors that they already have trust in, like CPAs and attorneys,” Crossett says.
Since the Department of Housing and Urban Development has changed the reverse mortgage product for the long term, there was no better time to roll out this program, Crossett explains.
“The HUD changes add a lot more legitimacy to the product,” he says. “The product is also moving away from only appealing to needs-based borrowers. It now looks and feels like all of the other mortgage transactions.”
The right people on the bus
To even be accepted into the program, there is a 30-90 day interviewing process and each cohort will have 10-20 students. Everyone who is selected for training will automatically be an employee of The Federal Savings Bank.
The program mainly targets people who are new to the the industry, but The Federal Savings Bank is interested in people who also may have experience in financial services or investment fields, but it’s not a requirement.
The Federal Savings Bank is veteran-owned and operated and focuses on VA loans and FHA loans for military and first time home buyers, so recruiting individuals from the military for the program is also a large focus.
“We are targeting military veterans,” Crossett explains. “We like the character and integrity of the people coming out of the military, whether they’ve been in four years or are retired, that’s kind of who we’re aiming for.”
Character is at the core of being successful in the reverse mortgage industry, Crossett points out.
“Baby Boomers want someone to sit with them at their kitchen table and walk them through the process,” he says. “I believe we can be so much more selective about the quality of people and then we can teach them the right habits for the industry from the beginning rather than take someone who’s been in the business and attempt to break their bad habits.”
Once training is complete, all of the students will then transition into facilitating reverse mortgage transactions specifically for The Federal Savings Bank’s reverse product, LifeWise.
“This training program could be for someone who is retired or looking for a second career working part-time,” Crossett says. “It can be an extremely flexible position.”
The Federal Savings Bank anticipates to roll out the HECM sector of Mortgage Banker University in the fourth quarter of this year, or in early 2017.
Written by Alana Stramowski

New York Times: Reverse Mortgages Making a ‘Quiet Comeback’

Reverse mortgages earned a bad reputation in the past when they were abused by some lenders across the country, but now they are making a modest comeback and are being seen as a way to fill gaps of income in retirement, according to a recent article by The New York Times which notes home equity is now making a lot more sense for older Americans to tap into.
The proceeds from a reverse mortgage can help borrowers pay for out-of-pocket health care costs or other financial issues that people hadn’t planned for when saving for their retirement, the article explains.
“Since the loans are insured by the government, the Federal Housing Administration will cover any shortfalls between the final loan balance and net proceeds from the sale,” the article points out. “That means you don’t have to worry about being ‘underwater’ on the loan in case the home’s value is less than the mortgage amount.”
Even though the perks, when used in the right situation, are great and the changes made in the last few years to the program make it the much safer than in the past, reverse mortgages are still not being used much.
Those perks are being noted by financial planners however, and they are starting to recommend them to their clients as a way to offset costs in retirement.
Making sure potential borrowers do their research and shop around is also stressed. “Like other mortgages, they [reverse mortgages] have closing costs, which range from $4,000 to $15,000, though those amounts typically are not paid upfront because they can be added to the loan’s principal,” writes the article.
Borrowers shouldn’t feel they are going at it alone, speaking with a trained counselor and taking a look at the FHA’s website are also extremely important to know what exact costs will be and what all the details of a reverse mortgage are.
Getting an elder-law or estate-planning lawyer involved also may be necessary if the borrower hopes to include their home in a legacy plan.
Read the full article from The New York Times
Written by Alana Stramowski

Friday Round-Up: Reverse Mortgage Industry Voice Concerns on FHA Proposals

Congrats on making it to another Friday. The weekend is almost here, but before you take off, here’s what happened in reverse mortgage news this week.
How HUD Policy Changes Impact Reverse Mortgage Take-Up, Default Rates —There have been numerous changes to the Home Equity Conversion Mortgage (HECM) in the last few years and there are already new proposals for 2016. A recent study by the Center for Retirement Research at Boston College summarizes some estimated effects of the new HECM program changes, which include the Financial Assessment and initial draw limitations.
Reverse Mortgage Lenders Association Unloads Comments on FHA Proposals — Before the comment period for the Federal Housing Administration’s latest round of proposed changes closed, the National Reverse Mortgage Lenders Association (NRMLA) voiced its concerns about the changes in a 30-page document sent to the Department of Housing and Urban Development (HUD) this week.
Chicago Man Ordered to Pay Reverse Mortgage Scam Victims $2.4 Million — A Chicago businessman, Mark Diamond, was ordered to pay $2.4 million to the victims of a reverse mortgage scam he allegedly perpetrated for decades. A lawsuit was filed against him in 2009, accusing Diamond of bilking senior homeowners living in Chicago’s south and west side neighborhoods out of more than $1.3 million through the scam.
Retirement Journal Details Reverse Mortgage Strategies in New Paper — A recent paper published in the Summer 2016 issue of Retirement Management Journal looks at research on various retirement strategies that reverse mortgages can be used for. The central theme of the paper focuses on sequence-of-return risk and reverse dollar-cost averaging.
As Reverse Mortgage Volume Fades, These Cities Shine Bright —Reverse mortgage volume has been on the decline for most of this year, aside from a slight increase from January to February. In the most recent HECM endorsement numbers through June 2016, there were however a few a few states that did see increases in volume.
Written by Alana Stramowski

FHA Gives Answers on New Reverse Mortgage Financial Assessment Updates

A week after updating its Financial Assessment and Property Charge guidelines for the Home Equity Conversion Mortgage (HECM) program, the Federal Housing Administration hosted a conference call on Thursday in efforts to clarify some of the reverse mortgage industry’s biggest concerns with the revised policies.
As if the Financial Assessment—arguably the most impactful change the reverse mortgage has ever seen—wasn’t complex enough, FHA revised the rule last week through Mortgagee Letter 2016-10.
Among the changes were an updated HECM Financial Assessment and Property Charge Guide, along with revisions to the calculation of the compounding interest rate for HECM Servicing Fee Set-Asides to use the Note Rate. The Mortgagee Letter also authorizes HECM mortgagees to pass the cost of third party property tax verification fees onto borrowers.
With a little more than 10 weeks until most of the new rule changes (i.e. the revised growth rate for the Servicing Fee Set-Aside and updated Property Charge Guide) take effect for HECM case numbers assigned on or after October 3, 2016, several FHA officials made themselves available Thursday afternoon to answer questions and provide clarification to various Financial Assessment guidelines.
One of the most commonly sought after clarifications from industry members pertained to the new eligibility thresholds for residual income as they relate to certain Compensating Factors.
Mortgagee Letter 2016-10 puts forth a new requirement that the HECM borrower’s residual income must be at least 80% of applicable standard in order to be eligible for the following Compensating Factors: Assets Equal to Life Expectancy Property Charges; HECM Proceeds Sufficient to Pay Off Debts; and Access to Other Resources.
“80% of the residual income standard is a pre-qualifier to use these Compensating Factors,” said Philip Caulfield, housing policy analyst for HUD’s Office of Single Family Program Development, during Thursday’s conference call.
Since the Financial Assessment took effect April 27, 2015, FHA said it has been monitoring the impact of the rule on HECM endorsements. Though the agency didn’t quantify, Caulfield said FHA is concerned about the number of HECMs it has seen involving mortgagors who had negative residual income.
“Even if their debts are paid off, the mortgagor fell short of the standard—that is very concerning to us,” Caulfield said.
To mitigate the risk of low residual income, FHA now requires the 80% standard in order for mortgagees to cite one of the three aforementioned Compensating Factors.
“If you cite these Compensating Factors, we want to see that residual income was at least 80% of the standard,” Caulfield said.
During the call, FHA also clarified that HECM mortgagees do not always need to obtain tax returns from loan applicants when conducting the Financial Assessment, that is, if they can document the person’s income from other sources.
“We say that if you can document income from one source, then you don’t need to document from other sources,” Caulfield said. “A caution I would share is if they [mortgagors] are suffering big losses on rental real estate. Barring that, we say if you meet it from one source, then you wouldn’t need other sources. “
Thursday’s conference call was the latest discussion between FHA officials and reverse mortgage industry members regarding the intricacies of the Financial Assessment.
Last September, the agency hosted a lengthy training webinar to help reverse mortgage lenders better understand Financial Assessment policies.
While Thursday’s call lasted roughly 60 minutes, the lion’s share of the session dealt with Q&A from industry members. And if the repetition of similar questions asked by different attendees serves as any indication, there is a great need for FHA to revisit the topic of this complex rule more frequently.
Written by Jason Oliva

June Issuance of Reverse Mortgage Securities Tops $694 Million

Issuers of HECM mortgage-backed securities (HMBS) created approximately $694 million in new HMBS pools in June, a total that is substantially less than the previous month and year-ago issuance, according to the latest market commentary from New View Advisors.
Although June HMBS issuance was lower than the $857 million recorded in May and the $845 million reported in June 2015, May was bolstered by highly seasoned original issuance and June 2015 numbers were inflated by the pre-Financial Assessment origination rush, noted New View Advisors, which compiled its analysis using publicly available Ginnie Mae data as well as private sources.
In June 2016, HMBS issuers sold 104 pools divided into 49 original pools and 55 tail pools. Production of original new loan pools matched the previous month’s $449 million total. Meanwhile, no seasoned original pools were issued in June.
Original HMBS pools are created when a pool of Federal Housing Administration-insured Home Equity Conversion Mortgages (HECMs) is securitized for the first time. Tail HMBS issuances are those HMBS pools created from Uncertificated Portions of HECMs that have already had their original HMBS issuance.
Tail issuances grew to approximately $244 million in June, up from May’s total of $211 million.
“This appears to be the new issuance range for the industry: new production between $400-$500 million per month, tail issuance of just above $200 million per month, plus the occasional seasoned loan HMBS securitization,” writes New View Advisors in its commentary.
Total outstanding HMBS as of June remains at about $54.3 billion, up only $29 million from May—the smallest increase in recent years, according to New View Advisors.
New View Advisors estimates that June HMBS comprised approximately $169 million in negative amortization, plus the $694 million in new issuance, minus a record $834 million in payoffs.
“Payoffs figure to climb still higher as more seasoned HECM loans liquidate or reach the 98% of Maximum Claim Amount threshold,” writes New View Advisors.
Read the New View Advisors commentary.
Written by Jason Oliva

Looking for Something New? Apply for These Reverse Mortgage Jobs Today

Reverse mortgage lenders are looking for fresh talent for a variety of positions. Lenders are now hiring wholesale account executives, underwriters, loan officers and sales managers to add to their team of skilled professionals.
This week’s RMD jobs listing includes positions at Home Point Financial, Reverse, Inc., Liberty Home Equity Solutions and Nationwide Equities Corp.
Click the following opportunities that are now open to find out more. Or for a complete list of jobs, visit the new Reverse Mortgage Jobs Online.

Reverse Wholesale Account Executive – Home Point Financial
DE Underwriter – Reverse, Inc.
Inside Sales Advisor – Reverse Mortgage Loan Officer – Liberty Home Equity Solutions
Reverse Mortgage Loan Officer/Field Advisor – Liberty Home Equity Solutions
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 Alana Stramowski

ReverseVision Hires Dan Hultquist as Director of Learning and Development

Reverse mortgage technology provider ReverseVision this week announced the hiring of industry veteran and educator Dan Hutquist as Director of Learning and Development.
In this role, Hultquist will apply his experience in originating loans and working with retirement advisors to help ReverseVision bring a range of products, financial tools and educational techniques to the industry.
Hultquist’s commitment to reverse mortgage education runs deep within the industry. A Certified Reverse Mortgage Professional (CRMP), Hultquist serves as co-chair of the Education Committee for the National Reverse Mortgage Lenders Association.
Last year, Hultquist published the latest edition of his book “Understanding Reverse,” in which he answers the top questions he has received as a national reverse mortgage trainer.
“Dan comes armed with unparalleled product knowledge and extensive field experience,” said ReverseVision CEO John Button in a press release. “This unique combination makes Dan the perfect resource to spearhead several upcoming ReverseVision initiatives that will provide assistance to reverse mortgage lenders and brokers nationwide.”
Most recently, Hultquist served as reverse mortgage training manager for Austin, Texas-based Open Mortgage. In that role, he developed reverse mortgage training materials and conducted monthly compliance training using a custom learning management platform. He also originated loans as a branch manager for the lender.
“I’ve been blessed to work for outstanding reverse mortgage lenders, like Open Mortgage, who understood the value of reverse mortgage training and supported my commitment to industry-wide education,” Hultquist said in a press release.
Returning to loan origination gave Hultquist a renewed appreciation for the work done by field professionals every day, he said.
“But after wearing two hats for the past couple of years, I’m ready to focus by energies on what I love best: education,” Hultquist stated. “This opportunity with ReverseVision gives me the perfect platform for pursuing this passion and positively impacting our industry.”
Written by Jason Oliva

As Reverse Mortgage Volume Fades, These Cities Shine Bright

Apart from a slight uptick from January to February, reverse mortgage volume has been on the decline for most of 2016. But as industrywide volume sinks further from year-ago levels, as always, there are some markets that buck the falling trend line.
Home Equity Conversion Mortgage (HECM) endorsements totaled 20,871 units through May 2016, representing a 9.4% decrease compared to May 2015, when volume totaled 23,048 loans, according to the latest data report from Reverse Market Insight (RMI).
Although volume improved slightly in June, 2016 endorsements remain well-below both last year’s totals and those of 2014. As a result, just four of the top-1o states tracked by RMI reported volume growth year-to-date (YTD) through May 2016. As Reverse Mortgage Volume Fades, These Cities Shine Bright
(Source: Reverse Market Insight)
California, forever the largest producer of HECM volume, led the way with 4,702 units YTD as of May, signaling an increase of 8.1% from this time last year.
The largest percentage growth belonged to Colorado, which at 45.7%, reported 765 total units to claim the fifth-ranked spot overall; ahead of Arizona, whose 748 units represent a modest increase of 1.6% from last year. Meanwhile, Washington rounded-out the top states reporting growth, with 577 total units in May YTD, an increase of 24.1% from the previous year.
Denver gave a considerable boost to Colorado’s overall endorsement volume. The city accounted for 154 total units through May 2016, reflecting a 53.9% growth over last year.
The top spot among cities was Southern California-owned, by ways of Los Angeles and San Diego, which reported 232 and 174 units, representing gains of 2.2% and 16.8%, respectively.
To see where other states, cities and counties stacked up through May 2016, view the RMI data.
Written by Jason Oliva

WSJ: How to Buy a Home Using a Reverse Mortgage

As people’s views of reverse mortgages are turning around, consumers are now realizing the benefit, and possibility, of using a reverse mortgage to finance a new home. The utilization of the reverse product in a different way than a lot of people are used to seeing them was brought up in a recent article by The Wall Street Journal.
“Seniors 62 or older buying a primary residence make a down payment and pay closing costs,” the article writes. “They then get a lump-sum loan that goes toward the home purchase. No monthly payments are required to pay down the debt.”
The interest from the loan is accrued on the loan and the principal and interest become due when the last spouse or co-borrrower moves out of the house or passes away, the article points out.
The utilization of a line of credit for the remaining portion of the reverse mortgage is also brought up. The idea of having it available as a backup or for future use in retirement can be a perk for many retirees.
Many older Americans have trouble meeting the underwriting requirements for a traditional mortgage if they want to purchase a new home. This is mainly because, for the most part, they are not working anymore and a large part of a traditional mortgage is based on income more than assets they have saved up. Using a reverse mortgage to purchase a new home may be a better option for those seniors who may not be able to take out a traditional mortgage.
The misconception of seniors drawing from their home equity too rapidly is also brought up, but if a borrower can use it strategically, purchasing a home with a reverse mortgage allows them to invest in higher-yield investments than their home, Jamie Hopkins, co-director of the New York Life Center for Retirement Income at the American College of Financial Services, said in the article.
For borrowers who have homes over the federal lending limit of $625,500, there is also the option of a jumbo reverse mortgage, which is offered by two lenders, Finance of America Reverse, who offers a loan that typically goes up to $2.25 million and American Advisors Group, who usually offers loans that go up to $3 million.
The warning of foreclosure possibilities, construction requirements, as well as non-recourse loans are pointed out as some things to take into consideration when looking into a reverse mortgage for purchase.
Read the full story from The Wall Street Journal
Written by Alana Stramowski

FHA to Host Call on Reverse Mortgage Financial Assessment Revisions

The Federal Housing Administration will host a conference call this Thursday to brief the reverse mortgage industry on its latest updates to the Financial Assessment and Property Charge guidelines for the Home Equity Conversion Mortgage (HECM) program.
FHA-approved mortgagees and other stakeholders are invited to attend the industry briefing call Thursday, July 21 at 2:00 PM (Eastern).
During the call, FHA officials will provide an overview of the revisions set forth in Mortgagee Letter 2016-10, which includes an updated HECM Financial Assessment and Property Charge Guide, as well as revisions to the compounding interest rate for HECM servicing fee set asides. The Mortgagee Letter also includes the addition of a third-party property tax verification fee to allowable fees and charges.
The revised Financial Assessment and Property Charge Guide becomes effective for FHA case numbers assigned on or after October 3, 2016.
See below for important call information.

Title: HECM Mortgagee Letter 2016-10
Date: July 21, 2016
Time: 2:00 PM — 3:00 PM (Eastern)
Dial-in: (866) 254-5935
Access code: 397712

Written by Jason Oliva