Don’t Shy Away

[vimeo id=”117444083″ width=”625″ height=”352″]

How to Overcome Objections & Close More Loans

reverse mortgage newsIf there is one trait in many salespeople I’ve seen repeatedly it is the tendency to shy away or avoid objections to the reverse mortgage. I’ve been there myself. Early in my career I carried the silent fear that if I bring up anything negative the prospect will reject the idea of getting a reverse mortgage. I learned the hard way that nothing could be futher from the truth.

Let’s look at why bringing up and overcoming objections is critical to closing and keeping the sale.

#1. Trust. If you do not bring up the fact that the children’s inheritance is directly effected, the disadvantage of moving early in the loan or  how interest is really calculated someone else may or even worse they will find out on their own and ask “why didn’t he mention that?’. Once that happens your trustworthiness is shot and so is the sale.

#2. A true professional. There are salespeople and then there are…

Download the video transcript for this episode here.

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4 comments

Carol Hurst January 23, 2015 at 4:14 am

Great Comments. I LOVE hearing the Shannon Hicks of the world sharing information as contained in this post. This is the way I have always conducted my business and STILL feel it’s the ONLY way to operate with those we serve.

Reply
The_Cynic January 23, 2015 at 12:55 pm

So right!

Reply
RMMyths January 23, 2015 at 1:29 pm

While the strategy is sound, the question is do we care enough for our customers that we actually have researched the issue or are we merely parroting what we were told. (Like a more recent adage: “Garbage in, garbage out.”) Caring for prospects means we have not memorized our responses but we actually have looked into the matter in depth and tell them what we know. I have taken courses where the leaders have stated that overcoming objections does not mean we understand the answers we give but that we get the seniors to refocus on how the HECM will get them the cash they feel they need and “so richly deserve.”

The problem is when we begin replacing public myths with industry myths about HECMs. Recently with the NRMLA promotion of CRMPs, it is interesting to read their understanding of HECMs. Most have things generally correct but many begin using the mythical language supposedly justifying the cost of upfront and ongoing MIP.

The myth goes that FHA insurance protects the borrower against recourse by making a HECM nonrecourse. That is nonsense. The note itself says it is nonrecourse because that is what makes a HECM nonrecourse.

Many originators do not understand that just because underwriters qualify a loan as a HECM and HUD endorses it as such, upon reimbursement request from a lender, HUD/FHA reserve the right to refuse reimbursement if all substantial criteria have not been meant. There are even times at endorsement (months after closing) that HUD finds a fatal flaw to eventual endorsement. So does that mean that suddenly the loan is recourse? FHA does NOT insure a loan that they cannot endorse. And yet the loan is still NONrecourse. Why? Because the lender must submit a nonrecourse mortgage to HUD/FHA before FHA will knowingly endorse it.

We also hear that except for property charge defaults FHA insures against foreclosure. That again is utter nonsense. Why? Because most HECM terminations for the last few years have been due to foreclosure (or one of its cousins such as short sale and deed in-lieu-of foreclosure), servicers know this industry generated myth is absolutely false.

Then there is the nonsense that FHA insurance means that at termination the borrower (or heirs) cannot owe anything to anyone due to HECM. So that even in the case of foreclosure, the IRS cannot issue an income tax deficiency. While there will generally be no income tax on the foreclosure of a HECM, in speaking with tax professionals who regularly deal with foreclosures on nonrecourse debt and debt insured by FHA that is not always the case. So be careful with this one, especially since the tax liability, if any, really cannot be reasonably estimated until very close to termination.

Reply
Paul Stabin May 18, 2016 at 11:14 am

Good points, both by the blogger and by those who commented. Loans are not a one size fits all, especially HECM’s. Blanket statements do not serve. However, while the non-recourse aspect is determined by the NOTE, not FHA, it is the existence of the FHA insurance that is responsible for the the HECM being offered on these terms inthe first place, so yes the FHA insurance does serve a purpose. If you think otherwise, just look at non-FHA insured HECM’s (jumbo’s) and the difference is day and night.
The statement is technically wrong as spouted but actually in principal correct.

Reply

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