It’s Getting Personal: The Financial Assessment

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The Challenges of Diving into an Applicant’s Highly Personal Financial Information

reverse mortgage newsFrom building trust or diving into one’s very personal financial data the financial assessment presents challenges and opportunities alike.

In marking the division of history one may refer to B.C. or A.D.. For the reverse mortgage industry we have NA and FA, no-assessment and financial assessment. That point in time can be marked as April 27th 2015 when HUD’s Financial Assessment guidelines went into effect forever changing the face of the Home Equity Conversion Mortgage program.

The in depth review of an applicant’s highly personal financial data has created a mental hurdle that many struggle to overcome…

 

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A Boiled Frog?

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“I’ve seen my share of boiled frogs”

One industry titan said of struggling industries “I’ve seen my share of boiled frogs”.

While resilient the reverse mortgage industry has struggled since 2009. Battered by the storms of the housing crash, principal limit reductions, numerous product changes and the financial assessment those who remain may feel like they have been slowly boiled as the heat of change is continually turned up.

reverse mortgage newsHowever amidst upheaval there is opportunity; the opportunity to revamp our approach, improve our internal processes and create new efficiencies in doing business. The fact is the paradigms that applied to our industry just a few short years ago no longer apply. To adapt and thrive both industry leaders and loan officers should examine the steps necessary for long term survival and success.

Here are some take-aways I’ve found in watching how other industries have dealt with chaos and adversity.

1- Throw away faulty perceptions. That’s right, throw them away. From needs-based borrowers, easy qualification standards and quick…

 
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Digital Durables

Part Two: A Picture is Worth… 

The topic is as old as the hills, but the platform is relatively new: time management in the digital landscape. In response to Digital Durables, in which we explored multitasking webinar participants, one astute reader wrote,

“The problem is not just that of attendees. Many moderators and speakers are just as badly distracted. On several occasions in recent years I have heard a speaker on a panel react to a question as if he/she had just awoken from deep sleep in outer space. Jet lag, a late night client outing, an emergency back home, last minute client demands, alarming emails, hunger; any number of things can disrupt us.

“Digital is both a blessing and a curse. I knew a bookkeeper who, for more than half a decade, rejected the idea that handwritten journals and ledgers would become obsolete. Many seniors are caught up in this same mindset when it comes to digital.

“The trouble with digital is the general lack of control in its use. We have a long way to go before we master our time using digital.”

Well put. While travel can indeed be enervating, HECM professionals have a responsibility to give their best to an audience that may also have traveled, as well as paid a fee, to learn the information you have to share. Using digital communication requires the same kind of focus and organization that business leaders need to master for traditional communication.

reverse mortgage news

Let’s Get Visual

For starters, get visual. Though the Internet appears to be a world of words, 90 percent of the information transmitted to our brains is visual — and we process images 60,000 times faster than text. More than ever before, we live in the age of images, where every action can be instantly captured by phone and sent across the web in moments.

While PowerPoint slides are certainly preferable to no images at all, consider how you might incorporate video into your presentations. Nearly half (40%) of people respond better to visual information than plain text. And when it comes to your website, images means business: 60 percent of consumers are more likely to click on a business whose image appears in search results.

Spring and Fall Ahead

In terms of live seminars, recent research turns the daylight savings ditty about spring ahead/fall back on its ear: March, April, September and October are the ideal months to host a seminar. December, not surprisingly, is the worst choice, followed by August and July.

If you’re planning to host an educational event for prospective reverse mortgage referral resources, such as financial planners, it’s wise to snail mail or email invitations approximately four weeks in advance. Send a reminder e-blast a few days before the event, and a second reminder a few hours before. (Most online conference services will automate this process for you, and you can utilize them just as easily for a live event, substituting a physical address for a call-in number or web page). Give registrants the option to email, call a toll-free number, or utilize online event registration, and provide an overview of the subject matter you’ll cover.

Boosting Attendance

Once someone shows interest in your event (but has not yet registered), telemarketing can increase registration by five percent, say researchers. Seminar experts recommend making three call attempts, one to three weeks prior to the event, and leaving a voice message on the first and third attempts.

Unfortunately, only 40 to 50 percent of those who say they will attend a free seminar actually go. Email confirmations can greatly increase the attendance rate at the event. But even better is to give the registrant a call 48 hours before the event. Just as with reverse mortgage prospects, the personal touch has a positive impact.

If you record the live event, you can post it on your website afterwards, and send out an email informing your contact list that it’s available, either at no cost or for a nominal fee.

 

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

A Lucrative Option?

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Reverse Mortgages hold advantages for the ‘mass-affluent’

reverse mortgage newsReverse mortgages can be a valid retirement planning tool for those in need of cash but also for those who are financially well off.

Last Monday the Huffington Post published “Is a Reverse Mortgage a Lucrative Option with your Financial Situation?”. Cited in the article was a white paper published by Edinboro University stating that using a HECM line of credit is more lucrative than selling investments. This speaks to the mass-affluent borrower with substantial retirement savings and investments as opposed to the needs-based-borrower of the past.

Beyond merely preserving the portfolio by not selling depreciated assets the study cites the tax benefits. “Commonly, retirees will use 401(k) funds, or other savings to pay off a mortgage. But if there’s enough equity in the home, the reverse mortgage could be used instead of using tax-deferred savings.” A good point since qualified…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

What Do They Want?

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Consumer-Centric Fact Finding versus Selling

reverse mortgage newsGrowing up as a child I remember my father reminding me periodically “It’s not about you.” This admonishment is key for us to develop successful personal relationships and more practically with our borrowers.

Sitting down at the kitchen table with hundreds of older homeowners and countless business presentations this simple, yet direct principle can easily be lost in one’s zeal to present, persuade and influence. These motivations can blind us to one of the keys to successfully determining if a reverse mortgage is in fact the best course of action.

Today our prospects have more power than ever with better product knowledge, the ability to conduct research online and social media. Here are some principles to keep in mind as we work with older homeowners considering a Home Equity Conversion Mortgage.

1- Interview them first. Avoid the temptation to jump into the storied history of the reverse mortgage program, margins, the index and non-recourse clause. While important…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

Financial Assessment Welcomed by Some

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Some Lenders Welcome Financial Assessment

reverse mortgage newsThree months following the enactment of the Financial Assessment some smaller reverse mortgage lenders are finding the new guidelines a breath of fresh air.

A welcome change? Surprising since reverse mortgage endorsement numbers have fallen after the assessment became baked into the origination of Home Equity Conversion Mortgages. Where is the sweet spot for the assessment? It would appear to be with smaller lenders.

Robert Wyatt, president of Reverse Mortgage Advisors, LLC said “As a small independent shop I’m seeing that the FA has created a need to really sit down face-to-face or kneecap-to-kneecap, with potential borrowers to explain the process. This has really been a benefit to us.” While many may not share the same sentiment due to numerous guidelines and documentation requirements, some have found a silver lining despite the overall pushback by many loan originators. That silver lining is…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

Know Thy Customer

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Beyond Fact-Finding to Motivations

reverse mortgage newsThe traditional Home Equity Conversion Mortgage Transaction typically goes like this: potential borrower sees advertisement, homeowner contacts lender, loan officer gathers information, takes the application and the loan hopefully closes. In years past the approach generally was successful as many if not most of our borrowers had a substantial financial need motivating them to pursue the HECM loan in the first place.

Today that has all changed.

The recent enactment of the Financial Assessment has pushed the HECM more toward the spectrum of…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

I Knew You Looked Familiar


Brightening, Boosting, Reimplanting Our Brains

Alzheimer’s disease is costly, both in terms of what we lose to the illness, and in terms of treatment. The sixth leading cause of death, by 2050 the number of people affected by Alzheimer’s is projected to reach 16 million. It’s currently the most expensive health condition in the U.S., and the only one in the top ten without cure or prevention. But there may be some ways to slow its progress.

Blog-Inset-July-28We’ve explored aging and memory from a number of perspectives, from the cutting edge health and creativity steps reverse mortgage professionals can share with clients and prospects to help keep malleable minds in tip-top shape, to viewing dementia from an expanded dimension. Now we’re poised to be able to back up our grey matter the same way we do our devices — or even implant a new “hard drive” when the existing one falters.

In Still Alice, a Harvard linguistics professor relies on her Blackberry to remember appointments — a prompt many of us need in these information-laden times, regardless of the condition of our personal RAM (random access memory). In the novel, Alice writes herself a letter on her computer that contains key brain health information, such as the number of children she has and her eldest daughter’s birthday, with instructions to her future self: when she is unable to answer all the questions correctly, she will no longer be of sound mind. The question is, would she know when her answers weren’t accurate?

Backup Your Memories

A new app helps Alzheimer’s patients stave off this unsettling shift. Backup Memory acts as a memory stimulator for people who are exhibiting early signs of Alzheimer’s. “Recent studies have shown that mental stimulation in the form of regular reminders of past events could potentially slow down the progression of Alzheimer’s disease. This is where we saw an opportunity,” says Azer Jaafoura, one of the product’s developers. The app “helps patients become aware of their immediate surroundings by identifying nearby family members and friends, and also reminds patients about their relationship with each person and memories they’ve shared in the past through photographs and videos.”

While memory loss is the acknowledged hallmark of Alzheimer’s disease, it’s by no means the only symptom. Scientists from University College London analyzed data on nearly 8,000 members of the US National Alzheimer Coordinating Center (NACC) database, an ongoing registry of people who receive care at an Alzheimer’s treatment center in the United States. Each participant had been formally diagnosed with Alzheimer’s disease, and recorded the first signs that something was wrong in their brain.

Yet a fourth of those who developed Alzheimer’s before age 60 reported initial symptoms that had more to do with spatial awareness, problem solving and judgment — early warning signs that drop off significantly as the age of diagnosis rises.

What if memory itself could be implanted? Scientists are researching how brain plasticity might one day lead to the ability to change the way we remember events. While the research is initially focusing on helping to erase or replace traumatic memories, the work carries implicit possibility for those whose memories are fading with time. And neuro-optometric rehabilitation (redirecting cognitive pathways through visual adaptation), which has proven successful with traumatic brain injuries such as concussions — where other treatments did little more than provide temporary symptom relief — may hold out promise for Alzheimer’s patients as well.

Brain Trauma Can Mimic Alzheimer’s

It’s also valuable to know that what looks like Alzheimer’s disease may not be dementia at all, but a TBI (traumatic brain injury). As DePaul University professor Clark Elliott explores in his eight-year odyssey with TBI, The Ghost in My Brain, a concussion can cause symptoms that masquerade as Alzheimer’s due to cognitive processing problems. He describes how a football player with TBI became progressively less able to schedule appointments, until “it got to the point where you couldn’t tell him the day before an event and expect him to remember.”

Elliott devised a brain assessment self-test that mirrors that of the fictional Alice: he would ask himself, “What are the names of my children?” and gauge his brain’s functionality for the day based on how long it took him to answer: anywhere from six seconds on good days to more than three minutes on “bad brain days.” So if any of your reverse mortgage clients or prospects have fallen and hit their head, they need to make sure they aren’t suffering from a TBI, especially if they fear they may be developing dementia.

Those who do have Alzheimer’s recognize what is happening to them. This poignant series of self-portraits provides a visual record of a man with Alzheimer’s disease over an eight-year period, until the year he forgot to send an image to care facility management. Like the blog Watching the Lights Go Out, the memory-impaired person gives us a rare glimpse into what losing one’s mental acuity is like from the inside.

 

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

 

Don’t Get Suckered: Consumer Reports

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Consumer Reports Article Cautions Readers

reverse mortgage newsThe magazine and self-described consumer educator and advocacy group Consumer Reports recently published an article entitled “Don’t Be Suckered Into Buying a Reverse Mortgage”.

In it’s paternalistic zeal Consumer Reports does dispense some practical advice but unfortunately makes use of pejorative terms such as vulnerable, at risk, ambiguous, and suckered. Today we will take a short editorial and factual review to prepare you to work with potential borrowers who may have read this piece.

Consumer Reports begins with the claim that the loans are often advertised as a risk-free way to fill the financial gaps in retirement. Not surprising since several media outlets have jumped on the CFPB’s recent report of reverse mortgage complaints, many which are related to advertising.

The article states that…

 
Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.