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Non-FHA Approved Brokers find themselves out in the cold when it comes to FHA’s list of HECM approved lenders.
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Many people look forward to retirement as a time of leisure, when they can finally relax and do what they wish: take a trip, play golf, or embrace a lifelong passion such as music or art.
But if they’re hurting for money, none of these dreams will be easily realized. A recent study from Banker’s Life & Casualty found 14 percent of Baby Boomers have no retirement savings, while 55 percent of middle-income Boomers’ retirement accounts have balances under $100,000. The good news: many of these soon-to-be-retirees have significant equity in their homes.
The evolution of the reverse mortgage industry can serve the new Baby Boom seniors, who may be bewildered to suddenly find themselves house rich, yet cash poor.
Today, with reverse mortgage information available through AARP and HUD, and backed by FHA insurance, reverse mortgages are a viable way for qualified seniors to tap their home’s equity to meet living expenses in later years.
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The lackluster condition of of the Mutual Mortgage Insurance fund in fiscal year 2010 lead to some sweeping changes which included a reduction of principal limit factors, an increase of ongoing FHA insurance and the introduction of the Saver.
What changes can we anticipate when the insurance fund’s actuarial report is released this November if any? The housing market aside there are factors that have improved the overall financial health of this fund which backs federally-insured reverse mortgages.
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1. What can I learn from this?
2. What could I have done differently?
3. Do I need to acquire or improve some skills?
4. Who can I learn from?
5. What will I do next?
During a recent consultation with a coaching client the discussion turned to the topic of focus and how to stay on task when there are so many potential distractions in a given day. This got me thinking……
Having been a speaker as well as an attendee at many mortgage industry and senior related functions, I can’t help but notice how more and more, when the speaker is presenting, much of the audience is engaged in other activities. No this is not a commentary on the speaker himself, quite the contrary. It seems that we are all so concerned about staying connected 100% of the time, that we could miss a good presentation or discussion. When you are part of the audience, you have taken the time out of your day to attend a presentation- so really be there! You just may walk away with a nugget of marketing information that will help you build your pipeline. Put down the blackberry, the i-phone, the Droid, the (fill in other name of gadget here) and be there.
The same goes for the time you are spending with your senior clients. Personally, I love it when my clients tell me the story of their life. It often affords me great insight into how to best present the reverse mortgage and its benefits. I am not looking at my watch (or worse, my phone) while we are talking but rather devoting my full attention to them. I take notes and nod from time to time to show that I am paying attention. I ask leading questions to spur further conversation. Being 100% focused on the client during any interaction distinguishes you as a true professional, not just another loan officer. Try this in your day to day appointments, put down the phone and focus on what is taking place right there and then. You just might learn something!
While it’s true that people don’t change dramatically just because they grow older (see Marketing to the Mature Homeowner/Part 1), there is one area in which aging makes us more vulnerable: trust.
As people age and watch spouses, friends and family members die, the lyrics from The Cure’s tune, Trust, may express how they feel: There is no one left in the world that I can hold onto / There is really no one left at all. Lack of a support system can and does affect older adults psychologically.
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The response to these transitions can either be fear, in which seniors become less confident in people overall, or outreach, where, in their desire to connect, they misguidedly place their faith in everyone from the caller who tells them they’ve just won a sweepstakes, to the salesperson who suggests a risky investment.
Because such unscrupulous individuals and businesses often prey on older adults’ loneliness or hope, it behooves reverse mortgage professionals to understand the concerns unique to this cohort group.
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HUD has made it official, reverse mortgage lenders have the authority to help prevent tax and insurance defaults when it comes to financial underwriting and potential reverse mortgage borrowers assessments.
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Step 1 – What is taking up a lot of your focus and energy?
Write down a list of everything you are thinking about and stressing about.
Step 2 – What would be a successful outcome to this situation?
To each point on the list, visualize what a perfect solution would be and then write it down.
Step 3 – How important is it that this task is done?
By answering this question, you learn if this task is something you need and should do or if it really isn’t that important and can be eliminated.
Step 4 – What action could you take to move the project towards that goal?
Once you know that the idea is an important one, write down what the next action you can take to move the goal towards its perfect solution.
Step 5 – Decide when you are going to do the action
Write it down in your calendar.
Let Go and Relax
Do you feel how much more relaxed you are now that you don’t have to remember all your ideas? Now that you know that they will be done?
You can hold a home in living trust, or create a trust fund for the next generation. But building an emotional “trust fund” with potential reverse mortgage clients — one you can draw upon throughout the sales cycle — is not as simple as a monetary investment. Creating trust calls for a wealth of skills that must be both genuine, and polished to a high gloss.
Building trust is an art form. The average reverse mortgage sales cycle until purchase is nine months — the amount of time it takes for a baby to be born. It’s an apt metaphor. In birthing their reverse mortgages, the seniors you serve are initiating a major life change that can be thrilling and scary at the same time.
What’s more, the manner in which reverse mortgage professionals interact with prospects is changing, from face-to-face “meetings at the kitchen table” to Call Center referrals, where you may never see your prospect in person. While Baby Boomers are often more comfortable making purchases by phone or even over the Internet than their forebears, it’s also true that one’s home is typically the largest asset someone owns, and transacting a reverse mortgage with a faceless originator requires a high level of trust in the person, as well as the process.
Be highly knowledgeable. The more you know about the nuances of reverse mortgages, and how these options affect your target market, the easier it will be to build a trust-based relationship.
Communicate clearly and honestly. Share the disadvantages as well as the advantages of a reverse mortgage, e.g.:
Listen deeply to their story. Why is this couple or individual looking into a reverse mortgage now? What’s driving them? This is your best starting point.
In Part 2, we’ll look at factors that influence seniors’ ability to trust, as they grow older.