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Four Fallacies for Reverse Mortgage Professionals
Spend enough time in any given profession and you will fall into the trap of deceit. Not deceiving others but ourselves. There are a number of lies that we can easily tell ourselves about working in the reverse mortgage industry that will affect our outlook, performance and sense of well being.
1- The program’s reputation is damaged beyond repair. The best lies are rooted in half- truths. Certainly most can agree the words ‘reverse mortgage’ often elicits a negative response. A misinformed media, sensational stories about displaced borrowers and the occasional fraudsters are the typical stories that damage the program’s public perception. Unfortunately many have equated a reverse mortgage with cheesy late-night infomercials, ill- prepared seniors with no assets, and a loan of last resort. Some of this perception can be attributed to self-inflicted wounds as evidenced with…
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2 Comments
Shannon has once again opened the door to encouragement and gaining a more positive outlook. Here are a few remarks.
It is interesting to hear a HECM called an equity management tool but the better term is a cash flow management tool.
It is clear we are far worse at relegating a HECM to a loan of last resort than Shannon gives us credit for. In the last few years I have heard originators wax on and on about how the “New” HECM is more in line with a financial planning tool than a mortgage. Yet generally the only examples heard at the end of such praise are ones about saving a home, or seeing a senior who could no longer afford maintenance costs. The incongruity of the examples with the “new” image for HECMs would be hilarious if it were not so harmful.
There is no question that the Golden Years for HECMs are behind us but that does not mean that the future is bleak or that we might not see another golden era. Yet none of the things that Shannon points to have proven the resilience of HECMs. This is the eighth year that seniors are turning 62 and the oldest Baby Boomers will be turning 70 next year. Yet our endorsement volume last year was not even half of what it was before Baby Boomers began turning 62. And while the forward mortgage world is generally recovered, HECMs keep doing worse despite the value turnaround in housing and the general economic situation.
Milk is a simple product which dairymen have tried to stick to the script on in their marketing and advertising. Even though HECMs in every way other than two payout features and the monthly change in the line of credit is easier to explain than most mortgages, our convoluted explanations have complicated and confused the product so much that many seniors consider their minister, priest, or rabbi a better and more reliable source about HECMs than we, its originators.
As to being helpless, the one thing that was not mentioned was the NRMLA grass roots campaign to speak to the US Representative in your district and try to meet with US Senators from your state about HECMs.
Just remember if the endorsement numbers were bad last year and this, wait until you see what they will be like starting with September 2015 and continuing throughout all of fiscal 2016. Let us hope that fiscal 2016 is our actual endorsement volume bottom. Right now that is hard to predict.
Cynic,
Thank you for your thoughtful insights. Much appreciated.