Practical tips to mix things up for greater efficiency.
Whether it is due to over-regulation, the sheer size of our housing bureaucracy, or crony capitalism, the mortgage marketplace is not a level playing field, especially when it comes to traditional and reverse mortgage lending. Despite the creation of the Consumer Financial Protection Bureau and other agencies created to protect consumers in the wake of the housing crash and questionable lending practices, problems remain.
Chief among those problems is the continuing lack of disclosure to older borrowers who cannot afford to choose the wrong mortgage option.
A level playing field in the mortgage marketplace is a noble concept that would place each player in a position to have an equal chance at succeeding abiding by the same set of rules. Unfortunately, such an aspiration is highly impractical in the mortgage marketplace as loan product features and risks vary wildly. Regardless, perhaps improved disclosure requirements should be required for traditional mortgage lenders, brokers and loan officers, just as HECM professionals will be required to disclose “all HECM products, features, and options that FHA insures.” Such a requirement may have prevented an 82 year old woman with a meager income and a part-time job from being placed into a 30-year mortgage- who a short time later lost her job and is now facing foreclosure.
7 Tips & Tools to Maximize Effective Workplace Communication
John provides insight into what is often one of the touchiest subjects in reverse mortgage lending… property values. How should you determine the approximate value? How do you manage expectations with the applicant/homeowner?
About John Luddy: John has trained reverse mortgage professionals how to be successful when sitting face-to-face at the kitchen table with prospective HECM borrowers. Norcom is looking for qualified loan officer candidates. To learn more call 1-860-507-2582 or email John Luddy here
For many people, the seventh and eighth decades of life are a work renaissance, as a recent New York Times piece makes clear. And while older adults, particularly women, do need the money, many members of this seasoned, savvy cohort are having “way too much fun” to retire.
Consider Laura, 71, who’s on the verge of her fourth career. She was a technology pioneer in the 1960s, and after thirty years in the field made a 180-degree pivot to run a retreat center. At 62, she took the Waldorf teacher training and became certified as a Waldorf teacher; she tutors students out of her home. She’s thinking her final career reinvention will be as an editor. But given how young, healthy and unpasteurized she is, who knows?
Look at Erni Stollberg, who became a model and Instagram sensation at 95. That redefines “aging with style” — just like model Lauren Hutton, a Calvin Klein underwear model at 73.
Then there’s Ed, 70, who has been running his high-end wood finishing business for 45 years. He’s tired of the high stress, of customers with 28-room houses bleating, “This shade of stain isn’t quite right…” He’s remodeling his own house and plans to rent it out and live in the granny unit, which will provide an income stream (and there’s always the reverse mortgage option for later on). How will he spend his newfound time and freedom?
“I’m going to sell tamales, either from a food truck or a stand,” he enthuses. It seems like a radical shift, but to Ed, the main ingredient is a lack of stress. “People love tamales, and that’s all I’m going to sell. They’ll come to me because they love what I’m selling. It’s a win-win.” And a retirement plan quite distinct from what a 70-year-old might have done just a generation ago.
The Not-So-Quiet Revolution
Several years ago, when encore careers exponent Marc Freedman wrote about how mature adults are navigating the new stage beyond midlife, the idea of pressing the reset button and jumping into a whole new chapter was fairly unusual.
Now the avant-garde has hit the mainstream. Dorian Mintzer, a leading-edge Boomer at 71, created Revolutionizing Retirement when she realized her retirement was very different from that of her parents: a journey, as Laura, Erni, Ed and many others exemplify, and not a destination. Retirement reinvention isn’t static — and it needn’t be serial.
Mintzer has a “portfolio career” as a retirement/money/relationship coach, consultant, speaker, writer and teacher who works with individuals and couples to navigate pre-retirement and retirement transition issues. Too many women are frustrated by a spouse’s loose ends once he or she retires and is under foot all day. Mintzer’s maxim appeals to her cohorts: “I married you for better or for worse, but not for lunch.”
She also founded the first virtual positive aging community, Boomers and Beyond (which has been meeting since 2007), and in 2012, the Revolutionize your Retirement Interview with Experts Series to help older adults create a fulfilling second half. Interest was so strong the calls are recorded for repeat listening.
“Sixty is not the new forty; we are who we are, and we do not want to be called seniors!” Mintzer says with verve. “Grandma” doesn’t sit well with many youthful Boomer women, either. In response, some senior centers are changing their names, to, for example, “Boomers and Beyond”.
Not Who You Were, Who You’re Becoming
“We need to harvest the wisdom of life, not the information,” observes Rabbi Zalman Schacter-Shalomi. “The planet is glutted with information today. What we need is the wisdom to know how to use that information.”
Even chronic illness doesn’t have to define us. Aware adults can change their dreams and adapt. Multiplatinum singer–songwriter Linda Ronstadt, 70, can no longer sing due to Parkinson’s. Now she speaks and writes to inspire others, and shares what she’s learned during seven fulfilling decades.
By the end of this decade, 20 percent of women over 65 will be in the workforce, according to the Bureau of Labor Statistics. If a senior is suddenly single (whether due to death, divorce, or some other circumstance), work is a very important social outlet; it’s critical for well-being.
“Work is not a four-letter word; think of it as part of your life plan,” says career transition and personal finance/retirement consultant Kerry Hannon.
The author of Getting the Job You Want After 50 For Dummies and nine other books, Hannon says, “People have a palpable fear of outliving their money. This is the exact opposite of aging in place home retrofits: spend time transitioning!” She outlines a trio of crucial steps:
While career reinvention can work really well, as explored above, Hannon advises, “Redeploy, don’t reinvent”. Take skills you already have and see how you can shift them to a new area: a former Naval captain became a manager with the circus, something he loved as a child and relishes in retirement. He merged what he loved with existing skills to transition into a whole new field.
Encore employment isn’t a linear process; more like a patchwork quilt. It’s important that older adults not get stuck in a moment; nothing is forever, and pivoting is not only possible but can be highly rewarding.
“Failing to provide a client with viable options can be just as damaging, if not worse than providing poor advice”
Such is the case in a recent post I read on LinkedIn from Florian Steciuch. He wrote “ My definition of heartbreak – meeting with an 82 year old client who was given a 30 year mortgage when she bought her new town home last year. Recently she lost her part-time job, now has Social Security of [sic] $1300 with a mortgage P+I of $700. She already missed her property tax payment. She provided a down payment of 50% – this is a prime example of why the FHA HECM for Purchase was a far superior loan option. She would have had NO mortgage payment. She was not offered this option because her bank did not offer it. 80 year old home owners should not be taking on the risk of 360 months of mortgage payments if they have a substantial down payment.”
Perhaps this 82 year old would have averted disaster had she read an article similar to Jack Guttentag’s, aka ‘The Mortgage Professor’ latest contribution in the Huffington Post, “Purchasing a House with a HECM Reverse Mortgage: How to Do It Right”. Guttentag opens stating “Purchasing a house with a HECM reverse mortgage has the great advantage that it does not impose a monthly payment burden on the borrower.”
Wht saying NO will help you and your prospective borrowersHere are two specific instances when saying ‘no’ is your best choice as a reverse mortgage professional.
One technique that takes you off defenseJohn shares one way to quickly take the pressure off yourself when a client or their adult child brings up an objection…
About John Luddy: John has trained reverse mortgage professionals how to be successful when sitting face-to-face at the kitchen table with prospective HECM borrowers. Norcom is looking for qualified loan officer candidates. To learn more call 1-860-507-2582 or email John Luddy here
Download your April 2017 Top 100 Retail HECM Lenders Report Here.
1- CFPB Complaints on the Rise- The CFPB has been busy collecting consumer complaints. The Consumer Financial Protection Bureau reports an increase of 172% increase in reverse mortgage-related complaints since 2012. One could guess that much of this is due to increased consumer awareness of whom to report grievances to and how to do so. While the data shows a legitimate spike in HECM-related complaints, questions remain such as differentiating between mere questions and complaints that warrant with 80% not requiring any action. Industry trade groups such as the Mortgage Bankers Association, feel this serves only to mislead the consumers the CFPB is charged with protecting.
2- Stupid? A recent CNBC article said reverse mortgages aren’t for the ’stupid’. CNBC reporter Andrew Osterland opens his column saying “you don’t have to be old, poor, and stupid to get a reverse mortgage’. Perhaps Osterland is implying some ‘stupid’ homeowners fell prey to what he says tarnished the industry’s reputation in the first place- ‘cheesy television ads, unscrupulous brokers, and unwise borrower behavior’. He quotes University Professor and industry advocate Dr John Salter who says ‘The late-night ads are a really bad idea for the industry’. Overall the piece is a positive one citing the merits of the HECM when used wisely.
3-Government Shutdown? If there’s one certainty in life it is the political infighting in Washington, D.C., this time it could lead to a government shutdown. By the time you watch this episode, we should know if Republicans and Democrats were able to negotiate a stop-gap budget that President Trump would sign. If there is an extended shut down HECM endorsements would stop altogether, which would lead to a significant backlog. “FHA does not have the authority to insure additional HECMs during this period due to the statutory cap limiting the number of HECMs under the HECM program,” said a guidance piece issued by HUD during the last shutdown in 2013.
4- 2nd Annual Reverse Mortgage Education Week-Last week was Reverse Mortgage education week, during which the National Reverse Mortgage Lenders Association focuses on educating older adults, financial professionals, real estate agents, and family members about the Home Equity Conversion Mortgage. Topics included tax and insurance defaults, avoiding scams, and the repayment process.
