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CFPB & Lending Procedures
CFPB & Lending Procedures for Reverse Mortgages
The CFPB has announced it’s examination procedures for lenders including reverse mortgages. What guidelines and disclosures will we see added? What now must be addressed in the future?
Download bookmarked & highlighted PDF of the CFPB’s origination standards for HECMs
8 Comments
Government has been trying to legislate morality in most of their endeavors and it is an impossibility. If a person is not profoundly honest to begin with, they do not belong in our business. I am a senior and our segment of the population is subject to more scams and half truths and outright lies than any other. Reverse is an educational process, not a sales process and the very nature of how we should be working is skewed by companies wanting more and more production.
For lomg term success the basic platform of our business needs to be changed.
Bravo!!
The process should be educational and not a sales process.
In fact, the educational process re: time value of money should start in grammer school!
I am always bothered when I see the tool being proclaimed as the process. No one pays us to educate. We are not high school business teachers; as originators we are paid when a loan funds, plain and simple. That makes us a specific type of salesperson called an originator.
I am not merely an educator. What I do is help seniors make an informed decision about originating a mortgage and my tool is education. My goal is to see the borrower in a better overall situation because of the mortgage than without it; therefore, not only do I need the sale but so does the borrower.
I have no concern about being misinterpreted. I am a salesperson doing the best I can for my customer. My best tool in that endeavor is education but make no mistake about who I am and what I do.
If you call me an educator, I am insulted. As the old saying goes: “Doers teach when they can no longer do.” The best feeling I know in this business is not in getting the message out but watching a senior who is benefitting from its proper use. That is sales plain and simple.
Let others teach. I want to sell to those who will benefit from using my products.
Bravo James, your comment is well stated! I find it dubious that our legislators who seem for the most part lacking a moral compass feel that they are qualified to regulate the ethics of practices within our industry. I have found most who are still engaged in the Reverse business to have a very high degree of moral ethics, much more so that the politicians I know and have met.
Bill and Tom, with all due respect, I strongly disagree with your assertions that we are primarily educators. I have worked for 3 different companies since entering the reverse business after over a decade on the forward side. One of the things that have impressed me most about this industry is the fact that the companies I have worked for and am familiar with stress education and the soft, needs based sell over pure production. This I assume is for the most part to mitigate representational risk; however it does serve the best interest of the senior as well. On the forward side, I found the opposite to be true, evidenced by the hits taken by forward originators in the media today. Although I am sure that there are some companies who are more production focused than others, it is my experience that they are the exception and not the rule at least with the top companies of which I am familiar. As a sales person my production pays the bills, not the education I provide. Our industry which provides a much needed service to our seniors will not survive without production. Thus we are in fact sales people in a production oriented, capitalist industry whose primary tool is education. To state the opposite is in my mind disingenuous. I agree that those who are purely production focused and who use deceptive practices and do not put the best interest of the client first have no place in this business. However, I feel that our legislators view of those of us in the Reverse industry are all too often lumped in with our colleagues on the forward side with regard to purely production based business practices. The majority of my clients are in fact put off by the voluminous disclosures they are required to sign. The comments I hear at application and closing, relate wastefulness and insult to their intelligence by the regulators who require them. In my opinion we are consultants, not educators. This view is supported by the fact that although all of my clients could pass a knowledge test with an A+ after consulting with me, if they do not close a loan with me I do not get paid a thing for the education I provided.
Gentlemen. After attending several conventions with most of the top producers in the Reverse arena and several of the very top trainers in our business, all state that education is paramount and should be viewed as the journey to our ultimate destination, the closing of the loan.My background is 15 plus years in the reverse business, building sales forces for Wells,PNC and Citizens Financial.
Well said Bill! Education is the door opener and what sets us apart.
Bill,
Look at how you refer to those you uphold. You call them “top producers,” not “top educators.” It is doubtful if one of them referred to their contacts, leads, prospects, applicants, certified counselees, customers (or clients), or borrowers as “students.” Did any of them goal set by looking at how many students do they want to teach versus how many originations they want to reach? Is their compensation based on how many classes they hold or how on many deals they close? Teachers who come into this industry need help learning how to close a deal. They want to stop when it seems the senior gets their message. It is that additional step which separates great educators from top producers. Convention speeches are great but language betrays the real situation.
We put a high value on education because without it, our sales would be unethical and questionably moral. Did the alleged top producers emphasize how to educate more effectively and focus on content of that education or on how education results in more sales? Did they provide more insight into what proper education is composed of or on how to get more sales through educating? What they emphasized was the best tool to use to get more sales.
Counselors are paid to teach. It is not their job to close a single HECM. We on the other hand can teach all we want but if we do not close a loan, we do not get paid.
We are blogging on a website supported by an organization that supplies those things which support higher sales, not higher teaching standards. I am licensed by the same organization as any other mortgage originator not by a licensing teaching organization. No lender wants to hear its employees bragging about how well they present the facts about reverse mortgages if they are not taking applications to those “students” and getting them signed.
If you really want to see how much our industry appreciates education, just look at our CRMP. One does not even need to meet one single formal education requirement. All we need to do is attend 12 hours of convention meetings, take a three hour ethics course, and pass an exam about our product. Yet, if an originator, one needs to have closed fifty HECMs. That looks to me like a credential for a knowledgeable and experienced salesperson not a credential for an “educator.” I am not putting the CRMP down but rather putting it in its proper perspective.
When I applied for my first originator position and my second, no one looked at my educational background to see if I have ever had a single course in mortgages or HECMs. They wanted to know if I was willing to originate reverse mortgages and had the information about the product needed to succeed at originating them.
Do you really believe that the US Department of Education will ever make a grant so that our education efforts can be realized? Will it underwrite our CRMP costs? Sales education has its place but I am still more CPA than salesperson. I hope to be an ever better educating salesperson.
Thank you Jim for the good analysis. 2012 is a watershed year for our industry.