Seven Ways to Work Happier

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The following is from an earlier publication authored by Amara Rose.


 We spend a lot of time focusing on ways to enhance the reverse mortgage experience for mature adults. Just as crucial, however, is the care of the reverse mortgage professional. The more relaxed, healthy, and well-rested you are, the better you’ll be able to listen and the more thorough and specific the service you’ll provide.

Here are seven ways to improve your workplace, mood, and manner:

 

  1. Order in the workplace! There are people who can pull the precise piece of paper they need from a chaotic jumble on their desk. However, a well-ordered work area makes this exponentially easier. Think about placing your important documents in color-coded file folders, or whatever system suits your personality, available space, and daily needs.
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  3. Let there be light. Unless you have full-spectrum lighting, sun exposure through windows is preferable to sitting under fluorescent bulbs, which can weaken eyesight with their rapid, undetected blinking. Another health benefit of natural light is improved sleep, which affects the quality of life — and encourages people to get more exercise because they finally have the energy for it.
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  5. Go for the green. While plants improve air quality by breathing carbon dioxide and giving off oxygen, they also decrease stress and increase productivity by 12 percent, says a new AARP report. Maybe not a huge enhancement, but where else can you get a daily brain boost for the price of a little watering?
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  7. Vary the sitting. It’s a conundrum: sitting for more than four hours a day has been shown to increase the odds of developing cancer, diabetes, high blood pressure, and heart disease — ouch! — yet standing at a raised desk can lead to varicose veins, knee or ankle problems, and carpal tunnel syndrome. What’s a health-oriented reverse mortgage professional to do? The AARP article suggests (no joke) a treadmill: one study found those who walked during the workday lost weight and enjoyed greater productivity after one year.
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  9. Of course, you could simply take a tip from one manager who possessed a lot of kinetic energy: he paced his office while talking on the phone, which burned calories, kept him from sitting or standing too much, and dispensed with the need for a treadmill.
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  11. Trust your animal instincts. A growing number of office buildings permit pets (and if you own the building, you get to make the rules). Pets help reduce stress, boost morale and collaboration, and raise efficiency.
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  13. Go walkabout for lunch. Give the sad-sack lunch-at-your-desk routine a pass and take a walk in the park; eat your meal while watching the birds. Or call a colleague and suggest you try that new sushi place. On the other hand, if you need to work on a closing or other mental task, staying focused at your desk is probably a better idea. Just try not to make a habit of it.
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  15. Music to your ears. While the younger generation seems to have earbuds surgically implanted, the AARP story does note that workers listening to music tend to complete tasks quicker and come up with better ideas than their quiet-loving colleagues. If you prefer to save music for after business hours, it still helps reduce stress, so listen to what you enjoy most when you’re unwinding at home, or on the drive there.

The Most Vulnerable Housing Markets

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Report reveals the most at-risk markets

It’s no secret that home values are a linchpin of reverse mortgage lending. Higher home values increase the likelihood that reverse mortgage applicants will qualify while falling home values typically result in more applications being deemed short-to-close and lower consumer interest.

In the first weeks of the COVID-19 pandemic, many began to suspect a housing crash was on the horizon. After all, the economy essentially came to a screeching halt with most office workers working remotely from home. That was the case until real estate professionals were deemed essential workers and the Federal Reserve repeatedly slashed interest rates triggering a historic runup in home prices. Mortgage professionals of all types breathed a sigh of relief and reaped the rewards of higher home values and record refinances. 

Today a nationwide housing crash is highly-doubtful yet several markets around the nation are beginning to show weaknesses that could lead to a housing downturn. 

Reverse mortgage professionals will want to see which housing metros they market in that may be at risk.

Real estate data aggregator and software provider ATTOM recently released its Special Housing Risk Report highlighting the most vulnerable housing markets. Their conclusions are drawn from fourth quarter 2023 foreclosure, affordability, and negative equity data. 

The Big Picture

California, New Jersey, and Illinois have the most at-risk markets in the country. Not surprisingly these are the states that have seen some of the largest gains in home prices. These three states account for 34 of the 50 counties most at risk of a significant decline in home values.

Housing markets near the coastline traditionally have the biggest surges of home values in a booming market and the largest risk of decline. However, 14 California inland counties far from the coast are showing signs of strain. 
 
“Fault lines running through the foundation of the U.S. housing market continue to appear in different parts of the country, with some areas remaining more or less vulnerable than others,” said Rob Barber, CEO at ATTOM. “As always, this is not a warning sign for homeowners to run out and sell, or rush to buy, in any specific market. The housing market remains strong throughout most of the country despite some recent small downturns. Rather, this report again spotlights areas that appear more or less exposed to a market fall, should that start to happen, based on key measures.”
 

Key Performance Indicators

  

Those key performance indicators (KPIs) include the number of potential foreclosures, the number of homes underwater with mortgage balances that exceed the home’s estimated value, a disproportionate ratio of the local median household income when compared to the area’s median-priced single-family home, and a higher than average unemployment rate. 
 
ATTOM that 36 of the 50 most at-risk markets have five percent of traditional residential mortgages that were underwater (negative equity) in the fourth quarter of 2023. Nationwide, just over six percent of homeowners have a mortgage balance that exceeds their home’s value.
 
Nationally foreclosure rates remain relatively stable with just one in 1,503 homes in foreclosure. The highest concentration of foreclosures can be found in counties with a higher unemployment rate.  
 

Vulnerable Markets

 

The highest unemployment rates can be found in these central California agricultural counties. 
 
  • Tulare County, CA (10.2 percent)
  • Merced County, CA(8.5 percent) 
  • Kings County, CA (8 percent
  • Kern County (Bakersfield), CA (7.8 percent
  • Fresno County, CA (7.6 percent)
 
These are the 14 California counties at risk of a housing market decline/reset:
 
  • Butte County (Chico)
  • Sacramento County
  • El Dorado County
  • Solano County
  • Fresno County
  • Kern County (Bakersfield
  • Kings County (outside Fresno)
  • Madera County (outside Fresno)
  • Merced County (outside Fresno)
  • San Joaquin County (Stockton)
  • Stanislas County (Modesto)
  • Tulare County (outside Fresno)
  • Riverside County 
  • San Bernardino County
 

Additional Reading:

 
 

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When the well runs dry

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Tapping a dry well?

According to the latest FHA Single Family Production Report, FHA case number assignments for new HECM applications fell in November and December.

In their latest newsletter, Reverse Market Insight aptly titled their February report ‘Dry Well’. 

For farmers or ranchers, the first signs of a nearly-depleted well are reduced water pressure, sputtering or inconsistent water flow, or sediment. In such situations, well-users may deepen the well, find another aquifer, or check for blockages. 

For reverse mortgage pros, several strategies may be employed to find a new source of applicants and potentially get the leads flowing again.

Know your marketing niche:


Where is it that you shine the brightest? Is it networking with local financial professionals, banks, or real estate agents? Look back to where you’ve been most effective and if those efforts have been set aside, make a plan to reengage.

Focus on referrals:

Are you consistently seeking and receiving referrals from your previous borrowers? One way to spur a referral is to ask for a review of their experience. Another key engagement that’s often overlooked is annual check-ins. Even better, call your borrowers who closed two months ago and go over their first loan statement, how to request credit line withdrawals, or answer any questions they may have.

Remember, superior service is fertile soil for referrals.

Use video email campaigns:

Did you know you can make a short custom video for a potential borrower and embed it in your email? Doing so vastly increases the odds they’ll click on the video and hear what you have to say. Loom or Bomb Bomb are great platforms for video marketing.

Show, don’t tell:

If you’re sending an email with a 48-page reverse mortgage loan proposal many of your prospective borrowers are prone to tune out or be overwhelmed. Instead, consider doing a short screencast using Loom to explain each page. 

Host virtual training sessions:

People want to help those who provide value. Consider hosting regular online sessions covering how reverse mortgages work or dispelling the common myths about the loan. Send out an email invitation with yes…a short video link so they’ll open your message and RSVP.

Work your database:

To put it simply, a reverse mortgage professional without a Customer Relationship Manager (CRM) is like a ship without a sail. 

Revisit your records in your CRM (such as Sales Engine CRM), and filter fields for the most likely prospects. Schedule an email drip campaign, or reminders to call them periodically. 

In conclusion:

Try some of these strategies to quench your thirst for new leads and closed loans. Find out which works best for you or tweak the methodology to suit your sales style.

If you’ve found some success in drumming up new business please share your ideas in the comment section below.

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Is a Reverse Mortgage a ‘crazy-butt idea’?

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Don’t explore those options!

Reverse mortgage professionals are well familiar with Dave Ramsey’s dim view of reverse mortgages. When Dina, a caller to The Ramsey Show said she and her husband have no heirs and were considering a reverse mortgage Ramsey and his cohost reacted dramatically as if she said she was planning to light her hair on fire. 

“We don’t have any heirs. Can I do a reverse mortgage?”, said Dina. 

“What are you saying?!” replied co-host Jade Warshaw. “Where is that woman who called and said she listened to the show? What did you do with her?” Ramsey quipped. 

A recent Yahoo Finance column recounts how the call to one of America’s most popular financial talk shows played out. “Quit entertaining these crazy-butt ideas”, said Ramsey. 

Dina is a 59-year-old teacher who mere months from retirement was looking into options to finance much-needed renovations on their home stated that she and her husband were considering a HELOC or a reverse mortgage. 

Their reported combined annual household income is $158,000. Dina says she could pay off the mortgage by August with her projected savings and a $28,000 tax-sheltered annuity. 

“I’m exploring options”, Dina said. “Don’t explore those”, replied co-host Warshaw. 

Don’t explore options? Why not? Because Dave doesn’t like reverse mortgages? 

What’s unknown is how much household income they will receive after Dina retires or if her husband’s income will remain the same. What we do know is Ramsey tends to paint with broad brush strokes giving advice that may not consider the unique circumstances of each caller.

Here are some questions Dina may want to weigh on how to pay for her home renovations.

 

  • What are the tax consequences of cashing out the tax-sheltered annuity?


  • Would spending down savings to finance renovations leave them forced to cash out other financial accounts that could lead to penalties?


  • Having no heirs what’s the advantage of leaving a home that’s paid off?


  • How much cash flow is preserved by either paying off the mortgage balance or refinancing into a reverse mortgage?


  • Does Dave Ramsey understand that unlike a HELOC a Home Equity Conversion Mortgage’s ‘line of credit’ cannot be frozen or reduced should home values drop?


  • With an annual household income of $158,000 and unable to pay cash for repairs and renovations, what other debts make self-funding the project unrealistic? 


  • What are the opportunity costs of not considering a reverse mortgage?


    • A reverse mortgage may not be their best option, or it could provide the flexibility for Dina and her husband to further safeguard or enhance their retirement. 

    The point is if an advisor makes the blanket statement to ‘not consider other options’ the client may want to consider advice from another financial professional.

    ________________________________________________

    Watch the Ramsey Show episode segment

    [Yahoo Finance] ‘Quit entertaining these crazy-butt ideas’

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    Don’t Believe the CPI ‘Lie’

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    The CPI sleight of hand

    Yeah! The consumer price index for January only increased 3.1% higher than one year ago! Is this reason to celebrate? Not necessarily. Welcome to the wretched inflation ratchet- note not ‘racket’ although some may beg to differ.

    When it comes to inflation the Federal Reserve’s mandate is to keep the annualized rate at two-percent or lower. This works well in a modestly-expanding economy as long as wages and retirement benefits  increase by roughly  the same amount. A lower the annual rate of inflation makes it more likely higher wages will offset the difference in the consumer’s purchasing power. 

    However, after two years of inflation well above the Fed’s target and beyond any Americans wage increases the pain is felt. Many are beginning to ask if inflation is only 3.1% why don’t they feel the ‘improvement’. 

    The answer lies in the dirty little secret about inflation few financial pundits will discuss. 

     

    Welcome to the inflation ratchet

    The secret is while the annual rate of inflation has dropped considerably from it’s high of 9.1% in June of 2022, the cost of most goods and services remains well above their prepandemic levels. This has carved out a large part of middle class wealth and decimated retiree’s casfhlow Unfortunately, most consumers find themselves attached to 2021 wages with 2024 prices eating away at their pocketbook. 

    Much like a ratchet, gains in the rate of inflation are ‘locked in’ with higher prices becoming the new norm. The future growth of inflation is added to the existing inflated cost of goods and services. While the rate of which the ratchet advances may have slowed the higher prices of 2021-2023 become the new baseline for American consumers.

    For example, on average Americans are paying 25% more for their groceries. The price of a eggs has fallen from it’s high of $4.82 a dozen in January 2023 but remains 71% higher than they were just three years ago. The price for a pound of bread is 25% higher than it was in January 2021. 

    But what about the GDP?!

    Today, despite the problematic effects of inflation, many financial pundit are touting the positive GDP numbers released earlier this month. While true, the GDP or Gross Domestic Product reveals strong economic output but prices remain stubbornly higher than they were just two or three years ago. So is deflation the answer? Will your $7 latte ever go back to its 2019 $5 price? The answer to both is no.

    While falling prices or deflation sounds like an attractive proposition it actually can wreak havoc on an economy. Falling prices can lead to a spike in unemployment and postpone consumer purchases which fuel our economic output. Why buy that new washing machine when it will be cheaper in a few months? In fact, the Federal Reserve prefers modest price increases or inflation averaging an annualized rate of two percent.

    How are today’s retire’s faring? Not so well. Even with Social Security benefits being increased thanks to the Cost of Living Adjustments of 5.9, 8.7 and 3.2% in the years 2021-2023 respectively, the aggregate increase of 17.8% while helpful doesn’t fully offset the increased cost of auto, home or health insurance. Should they need a car Kelly Blue Book reports the average auto transaction will cost 6,500 higher than it did in 2021. 

     

    Marketplace.org curated the cost of common everyday goods and found the following price increases.

    Again, a slowing annualized rate of inflation only means that the cost of a select ‘basket of goods’ has increased by a given percentage (CPI0 any given month- an increase that’s added to the already baked-in inflated costs of everyday goods and services that remain well above 2020 and 2021 prices.

     

    Another good reason to pick up the phone or contact those homeowners who said “no” just one or two years ago.

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    3 Lessons Reverse Mortgage Professionals Can Learn from Amtrak & NYC’s Subway System

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    Signs, communication & reassurance

    My wife and I just returned from our tenth anniversary vacation to New York City and Niagara Falls. Traveling comes with its own set of challenges but also opportunities for teachable moments. With a nine and a half hour ride from Penn Station to Niagara Falls and back the importance of how we interact with our potential borrowers and clients came to mind as the landscape rushed by our window.

    Lesson #1: Clear communication is essential!

    After taking the F train from Queens to Penn Station’s Moynihan Hall in Manhattan we continued to follow the countless signs to prepare for our departure. You have to hand it to New Yorkers- their signage is extensive and detailed, and while at times confusing, those who persist will find themselves at their intended destination. 

    My favorite signs are those in New York City’s subway cars. Once boarded you’ll now instantly if you’ve boarded the right train. The interior sign shows you the next stop and how many stops until your desired destination. It’s simple, clear, and reduces a traveler’s anxiety as they can track their progress. Perhaps those originating in New York may want to create a chart describing the reverse mortgage process with a similar layout.

    Establishing expectations reassures homeowners where they’ll begin and the steps required to ultimately fund their loan.

    There’s signage and then there’s verbal communication. 

    Amtrak’s announcements are somewhat reminiscent of going to a cattle auction. A steady cadence of fast, somewhat incomprehensible words strung together, coupled with the employee’s local dialect. When it comes to speaking “New York”, I have no problems and the accent rarely is an obstacle. It’s the pacing that doesn’t always ensure the message being sent is received by those waiting to board.

    Lesson #2: Reassure them along the way

    After two days of exploring Niagara Falls and city near our hotel we returned the Amtrak station for a 6:47 a.m. departure. Walking through the ground level doors and arriving at the second floor waiting area we found an empty waiting area and ticket counter. Not one employee was to be seen. “This place is a ghost ship”, I quipped to my wife. As the minutes passed I chuckled to myself wondering if we were in the wrong place. We weren’t. It just so happened that we were the only two passengers to board in Niagara. Let’s just say our choice of seats was unlimited.

    In the same way reverse mortgage applicants may get antsy waiting for updates on their loan application’s status. The top mortgage originators I know are proactive and instruct their applicants that they will update them on one or two specific days each week. 

    Lesson #3: Show a little tenderness

    Any vacation or application for a reverse mortgage for that matter is a collection of experiences. Little waypoints along the way that become part of one’s collective experience. As reverse mortgage professionals it’s our duty to ensure homeowners receive a concierge level of service and politeness they deserve. Perhaps several of you reading this who have experienced superb service  have been inspired to reach for new levels of excellence in your own practice. 

    Unfortunately, a trip to the dining car reminded me just how we don’t want to interact with our valued applicants and borrowers. After a 5:00 a.m. wakeup call coffee was at the top of my to-do list. Approaching the cafe counter the employee slowly got up from his chair and approached the point-of-sale computer. “Good morning”, I said. “Just a minute”, he gruffly replied, “I’m not ready”. Okay. After a minute or two of zero eye contact or even a greeting I placed my order for two coffees. “Just tap your card here”. Obediently I tapped my card but it didn’t take so I laid it down a bit longer. “I didn’t say keep it on there. I said tap it quickly”, said Mr. Cheerful. Throughout the exchange I refused to return rudeness in kind instead addressing him as “sir” and saying please and thank you.  After the card charged successfully I carried our  treasured hot coffee back to our seats. “What was that?!” I thought. That, was exactly what we never want our customers to experience.

    Each of our interactions should (1) acknowledge our customers promptly (2) express gratitude for the opportunity to serve them, and (3) leave them a reason to ultimately give us a five-star review. 

    Clear communication, a reassuring experience, and top-notch customer service are crucial to our success and reputation as reverse mortgage professionals. After all, anything we can do to smooth out a homeowner’s reverse mortgage journey may lead them to recommend their friends and family take your reverse mortgage train.

    All aboard! 


     

     

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