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Exclusive Interview: Traditional Lenders Role in HECM Lending

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Exclusive Interview with Dan Harder of 1st Reverse Mortgage USA

Two weeks ago on this show, we explored the premise that traditional mortgage lenders may provide substantial and much-needed growth for the reverse mortgage industry. An idea that flies in the face of what was once accepted as conventional wisdom by many who believed that ‘forward’ loan officers lacked the skill set needed for the lengthy and protracted process of originating being more accustomed to the transactional nature of a typical mortgage transaction. We thought it wise to reach out to someone who is an experienced hand in reverse mortgage lending who also has the unique position of working closely with traditional mortgage lenders. That would be Dan Harder, vice president at 1st Reverse Mortgage USA, a division of its traditional mortgage lending parent company Cherry Creek Mortgage.

4 comments

lakshmi yokoyama October 1, 2018 at 8:31 am

So where does this put loan originators working for Brokers and who fortunately already have the skill set to sell both forward and reverse products? I’m not sure we can compete with lenders marketing budgets once they start their ad campaign on Hecms. This would create a big problem for small Brokers similar to ours.

Furthermore-I hear so many complaints about the level of service and knowledge of LOs as it is on the forward space —I can’t imagine how the required hand holding,, personal one on one commitment required to originate a Hecm not hurt the industry if the traditional lenders start originating them and more seniors become disappointed about their experience, feel pressured into making one of the last and biggest decision in their life. Between the initial meeting, personal and actual loan application package process (face to face meeting), going over each page of the proposal and application, I spend 4-6 hours with each clients. Will LOs from traditional banks have that luxury? (Yes I call it luxury because I’m assuming they have quotas to make.) Maybe not all Hecm LOs do what I do but I’m one of those who does not want to be blamed by heirs when a parent dies and they were not aware their inheritance got eroded by the
unpaid interest on a Hecm loan. I literary read through each page of the proposal package then encourage them to talk to their children, attorney and financial advisor before going over the 1009 package after they’ve had their counseling session. I call before and after their counseling session too just to make sure they understood what was discussed. Maybe it’s an overkill on my part? Or maybe because I’m a senior myself and know where the comfort level of a senior consumer might be at.

Reply
Melinda Hipp October 1, 2018 at 11:38 am

I firmly believe there will still continue to be specialists as the software is different and most LO’s want that Realtor business and want the faster closing deals. Even though I do both forward and reverse mortgages, I have started enjoying the Reverses more the older I get EVEN though I have more fallout from them. Yes, there are a lot more details, the process is longer and there are typically a lot more people involved. However, just like forward mortgages, there will be enough easier ones to make up for the harder ones. By the way Lakshma, even though you do all the explaining and attempt to involve the kids, by the time the end comes they will still be wanting to blame someone even if they have been involved and sometimes just because of the servicing process in the end. It can be mighty difficult to navigate. But I do differ from Dan who is trying to continue the success of his company and just like the other “big boys” trying to find ways to not lose money. Some will succeed and others will not. Just associate yourself with the winners!

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Sharon Falvey October 1, 2018 at 2:02 pm

Well said Melinda Hipp!

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Jerry Hanley October 2, 2018 at 5:36 am

Reverse mortgage is a special product for a special customer. Both require a specialist, someone that lives, and breaths reverse and is focused on all things senior. A casual approach to reverse is not appropriate and dangerous.

Reply

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