There was a rush to market by a handful of lenders to offer fixed rate variant products which still fell within the guidelines of the federally insured reverse mortgage or HECM program. While FHA has not directly addressed these new products Ginnie Mae has.
Continue readingUnderstanding the Times
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Adapting to Culture & Technology
Remember Blockbuster Video? The drive you and your family would take to peruse shelves of video titles which were usually not alphabetically organized may have been part of your weekend routine? In those bygone days the internet was generally slow and Netflix only mailed DVDs having not yet begun their now ubiquitous steaming service. Blockbuster was slow to market a streaming video service and consequently was forced to close over 300 of it’s retail locations a few short years later. So how does one avoid the same fate? In order to survive businesses and the reverse mortgage industry must adapt to both culture and technology.
It’s no secret our industry is in a state of flux. What worked yesterday most likely will not be effective today. In the mid-2000’s reverse mortgage marketing relied heavily on direct mail campaigns followed by face to face meetings in the borrower’s home. As direct mail waned and national television ads began the shift toward call centers began in earnest. The greatest generation from World War II preferred doing business at the kitchen table while younger retirees preferred a more arms-length encounter…
Download the video transcript here.
Looking for more reverse mortgage news, technology & training? Visit Reverse Focus here today.
The Coming Revival?
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Our Industry’s Market Opportunities & Challenges
As a child growing up in the pentecostal church I often heard adults speak in hushed tones about the coming revival. Good things were just right around the corner. As I grew older I realized the promise of revival was a motivation for the faithful to endure despite present circumstances. Similarly there are more stories, rumors and hopes that the reverse mortgage industry will experience it’s own revival in the coming years. An article last Monday in Reuters entitled “U.S. retirees return to reverse mortgages, big banks stay away” addresses the baby boomer wave and the increasing need to fund retirement. It opens with “U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead…
See Secruian’s retirement study here
Download a transcript of this episode here.
Looking for more reverse mortgage news, training & technology? Visit Reverse Focus today here.
The Art of Survival
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The Skills Needed for Surviving the Age of Change
Beyond keeping up with product and regulatory changes is remains the difficult task of doing business in the brave new world of reverse mortgage lending. Originators are feeling the impact with fewer borrowers qualifying due to lower principal limits or lending ratios while lenders seek to adjust to lower revenues in the wake of HUD’s eliminator of the standard fixed rate’s loan.
Much of the pain can be attributed to the protracted process of redirecting our focus to a new demographic. Case in point, the typical needs based borrower. These individuals are most vulnerable to not qualifying due to…
Download a copy of the video transcript here.
Looking for more reverse mortgage news, technology & training? Visit ReverseFocus today here.
Top 3 Changes to Prepare For
We are one third of our way through the year. It’s a brave new world in reverse mortgage lending. Beyond the headlines we see four major changes we should be preparing for…
Continue readingNew Products & Client Need
There is a new race in our industry. In the last three months we have seen four new fixed rate HECM product variants introduced. Innovation can be a positive force in our industry but it does come with its risks…
Continue readingBack to Basics
If you look at the federally insured reverse mortgage one could say we have come full circle coming closer to the program’s original intent. What intent?
Continue readingIs this Our Next Growth Market?
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Our next opportunity for growth may be right under our noses
It’s no surprise that in the wake of the housing crash, increased regulation, lower lending ratios and the HECM product redesign that many are seeking ways to expand their market and increase their loan production. Many have been successful in part in making inroads to financial professionals and others with builders, developers or real estate professionals. Some look to new advertising campaigns and public relations campaigns to help increase industry volume. Yet there is one sleeping giant that could easily be overlooked. FHA…
For more reverse mortgage tools, technology & training visit www.ReverseFocus.com
The Young & the Restless
During a January 16th meeting of the National Reverse Mortgage Lenders Association’s Executive Committee, Deputy Assistant Secretary Charles Coulter said to expect a mortgagee letter in the coming weeks regarding non-borrowing spouses. Coulter said “The first ML will essentially require that in the case of a non-borrower spouse, the age of the younger member of the couple will be utilized to determine the appropriate PLF [principal limit factor]. HUD will be modifying the PLF tables to cover ages below 62 for this purpose.”
Continue readingToo Much Too Soon?
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Reexamining Product Design and Use of Proceeds
The recent overhaul of the HECM program was a watershed event for both the reverse mortgage industry and senior homeowners. The elimination of the Standard Fixed Rate, consolidation to one product, two-tiered upfront FHA premiums and first year distribution restrictions all were born from FHA’s attempt to reign in the HECM program back to its original intent while reducing the risk of defaults and payouts from the MMI fund. The idea was to prevent borowers from using all of their proceeds in the first or early years of the loan which could leave them with little or no financial options once they’ve exhausted all their funds. Also, lower upfront withdrawals and deferred or tenure payments or a line of credit reduce the likelihood that the loan balance would exceed the home’s value in the early years of the loan or when the loan ultimately terminated. Most program changes were spurred by the Consumer Financial Protection Bureau’s report to Congress…
