Wow, what an exciting week we had. Tracie and I just got back from the NRMLA Regional Convention in Denver and it was fantastic. Having missed the one in our own back yard (San Diego) in November we were really excited. The topics ranged from RESPA and underwriting to marketing and ethics. The people who were there represented all aspects of the Reverse Mortgage Industry and the knowledge level was staggering. In speaking with multiple lenders one thing was overwhelmingly apparent to Tracie and I, the industry is starving for training and direction.
The Reverse Mortgage Market Sector is growing and evolving at a staggering pace. Established lenders and new players are developing and promoting new and innovative products every day. With products that contain features such as: lowering the age limit to 60, allowing 2nd homes and investment properties, and ever increasing jumbo loan amounts, it is almost a full time job keeping up with it all. HUD is also providing some new changes to the HECM product, erasing the yearly purchasing cap, raising the loan amounts, and adding a home purchase option.
One of the main topics on everyone’s mind was what is going on in the sub prime market. With all of Washington looking at the mortgage industry, NRMLA and it’s industry affiliates wanted to make sure that the Reverse Mortgage business is not lumped in with the rest. The demographic that we service is highly represented by powerful lobbyists in Washington and the industry wants to make sure it self regulates to a standard that even AARP and others like it cannot find fault with. They have developed a code of ethics that they promote to ensure the highest standards are being met. We all have seen the forward mortgage job postings “Make 100K with No Experience” and those like it. Those models just don’t work with Reverse Mortgages.
One of the missing components of the “sub-prime machine” was training. Anyone could walk in, get assigned a desk, be handed a rate sheet and a phone, and start dialing for dollars. With customers practically breaking down their doors for the products who had time for training…and then came the crash or flight to quality in the credit markets. Take a look around, who is left standing? It is the brokers and bankers who took the time to hire quality people and train them properly.
Proper loan officer and processor training is what is needed to ensure that those high standards are met. While being an FHA approved broker opens up highly lucrative doors it also brings accountability and a higher level of knowledge.
Lets face it most of us haven’t closed an FHA loan in about 15 years or so and have never closed a Reverse Mortgage. What is a 1009? How does my borrower get a counseling certificate? How many disclosures are there really and what do they all mean? When is my borrower supposed to sign the application? These questions are just the tip of the iceberg and can be answered along with countless others by training and educating yourself and staff.
Honestly, we get just as many question regarding FHA loans as we do Reverse Mortgages. Brokers have relied so heavily on conventional loans that the FHA product became almost obsolete. With the increased loan limits and the sub-prime meltdown everyone is looking at FHA as their savior. This is not the case. While FHA can help out borrowers who might fall into the old sub-prime credit or down payment model, the lenders are getting much smarter and more conscientious.
There is so much to know about the new “FHA”, their guidelines are changing and the addition of the several new loan products are generating a lot of interest.
Combining the ability to do FHA forward mortgages with your steady Reverse Mortgage business is becoming a winning combination. Once again brokers, loan officers, and processors who are taking the time and energy to learn the FHA and Reverse Mortgage products are seeing their business grow exponentially.
If you would like further information please visit our website at www.reverseconsulting.com or call us on (858) 663-7435