From Defensive to Quizzitive – Questions to Ask
A defensive response is a sure way to lose. Lose a political debate, a public presentation, or even worse your credibility.
Much of what has been presented in the media at large regarding reverse mortgages can easily put any HECM professional in a defensive position. Hysteria, fear, one-sided stories, and intentional omission all in the effort to emotionally trigger the reader. But don’t let yourself fall into their trap.
Reading Plato’s The Republic with a philosophy group has revealed some fantastic techniques for how we can respond when challenged, accused, or misunderstood.
In The Republic, Plato uses Socrates as his fictitious narrator. When pressed on a point of disagreement Socrates doesn’t become defensive but rather responds with a question- a technique that bears his name to this day, the Socratic method.
The same can be said of the wild accusations that the media have heaped upon the federally-insured reverse mortgage. Delinquent property taxes, unpaid homeowner’s insurance premiums, a spouse being forced to vacate who was not on the loan, and unsafe property conditions- each of these can trigger a ‘foreclosure’ with a traditional 15 or 30-year mortgage.
That fact has been largely ignored by the media or buried 14 paragraphs into an article. Even worse, many who put themselves forth as a mortgage or financial ‘expert’ give the impression that such problems only plague reverse mortgage borrowers.
So the next time a financial advisor, banker, or potential borrower confronts you with a negative media story instead of becoming defensive instead try to ask one of these questions. Responding with a question instead of reacting shows strength and shifts the power back to the person asking the question.
- Do you know how delinquent property taxes are handled in a traditional mortgage?
- What do you think happens when the sole borrower dies and a person who is not named on a 30-year mortgage loan lives in the home?
- What do you think a mortgage lender would do if a borrower lets the home fall into serious disrepair or fails to fix major safety issues?
- What do you think may happen if a homeowner chooses not to respond to several notices from their lender, county tax authority, or insurance company?
These are just a few ways how the use of questions can help a critic or fearful homeowner separate unfounded fears from fact in reverse mortgages. Remember, if you say it they will doubt you- if they say it, it’s true. Ask the question and let them say it instead.
If there’s one fault most salespeople share it is this- a lack of follow up with the borrower after the sale. While many may contact the homeowner after the loan funds, or call to explain the first monthly loan statement- few stay in regular contact with the borrower. A lack of communication or no longer being easily accessible is fertile ground for misunderstanding, frustration, and yes even litigation. Consider for a moment the perception of an elderly borrower who may be panicked over some innocuous notice, or even worse a notice to remedy a delinquent property tax installment. Like most, they cannot easily locate their loan paperwork, just as most 30-year-olds cannot quickly locate their closing documents or even the folder they received from their mortgage broker. An older homeowner is fraught with worry, their adult children may be angry, and most importantly- a situation that may have been quickly remedied gets out of control.
Yesterday I turned on our local AM station and was aghast at what I heard. “So you both make about $150,000 a year and your mortgage interest payments would be about $16,000 a year. With your combined income that would place you in a 40% tax bracket so your interest deductions would save you about $7,000 each year in taxes”. I was shocked. Here’s a ‘financial ‘expert’ with his own radio show misleading one of his faithful listeners who phoned in. The mistake is sadly a common one- oversimplification. A more accurate answer would have considered that caller’s standard deduction of $24,000 a year would make deducting home interest payments highly unlikely- unless they already had other significant itemized deductions.
