The Reinvention of the Reverse Mortgage

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HECM Product Changes Spurred Market Shift & Innovation

reverse mortgage newsNecessity is the mother of invention. For the reverse mortgage industry one could say that necessity has pushed us into reinventing the image and application of the Home Equity Conversion Mortgage.

One could argue that the first 15 years of the HECM were simple. A straightforward product, few complications, and generous qualification guidelines for seniors seeking access to much-needed funds in their non-working years. Without reciting the litany of product changes and regulatory overlays it is safe so say that today’s reverse mortgage has been slowly transformed into a loan that is expanding its reach while facing a shrinking pool of eligible borrowers…

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HECM Changes: For Better or Worse?


Do Recent HECM Changes Help or Hurt our Industry & Consumers?



Certainly one could argue that the recent changes to the federally-insured reverse mortgage have improved the reputation of the program in the eyes of financial planning professionals and the media alike. While additional consumer protections are admirable, do the numerous policy changes signal a turn for the better or worse?

man-holding-scaleA recent MarketWatch article “Could the tide be turning on reverse mortgages?” asks just such a question. Columnist Alicia Munnell opens with “after decades of skepticism and reports of scandals, the tide appears to be turning for reverse mortgages”. The New York Times Business section recently led with a story on the ‘revival of the reverse mortgage’.

While there may be a revival of the reverse mortgage in the consciousness of the mainstream media and in the minds of media pundits, our industry is not experiencing a revival but a retraction, as HECM endorsement volumes…

Download a transcript of this episode here.

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

Retirement Funding Solutions Hires Alex Pistone as President

Top Industry Executive Accepts Leadership Role

Retirement Funding Solutions, the Reverse Mortgage Division of Synergy One Lending, Inc., has secured a top industry executive in Alex Pistone. Pistone has been brought on as a partner of RFS and will lead the organization as its President. Most recently, Pistone was Senior Vice President at S1L/RMS, where he was responsible for the firm’s national retail sales force.

“Alex has consistently demonstrated servant leadership throughout his career and he embodies our organizational core values. I am very thankful for the commitment Alex has made to RFS and look forward to seeing him reach his potential as a leader of a large, national firm,” explained Torrey Larsen, CEO of Synergy One Lending. “Retirement Funding Solutions will expand the right way under Alex, and the reputation of this Company will be built by Alex and a great TEAM of individuals who will contribute in unique and meaningful ways.”

reverse mortgage news, retirement funding solutionsRetirement Funding Solutions will be positioned as a unique option for Originators who wish to focus on the future of the industry. While at S1L, both Larsen and Pistone had a role in the formation of the Funding Longevity Task Force, which Shelley Giordano Co-founded and leads to this day. Additionally, the Emerging Markets Division was organized in 2011, which focused on the future of the HECM space; the Builder, Realtor and Financial Advisor segments of the market. Today, those segments are the focal point of every firm in a post FA environment. RFS has established a Strategic Initiatives Division, which will focus on the next phase of initiatives that can shape the future of the Firm and the Industry.

“I am thrilled to be working with a proven and experienced management team with whom I share the same principles and business objectives”, explained Pistone. “I look forward to operating a customer-centric company with a culture of teamwork, integrity, and respect; which will result in high levels of service to our customers as well as a rewarding career path for our associates.”

RFS is hiring now. For Employment Opportunities: Click here to learn more.

 

Shaping the Message: Extreme Summit

Controlling Our Market Brand and Perception

Marketing experts see plenty of companies begin a public relations campaign and then leave it in the hands of the media. When it comes to reverse mortgages one can safely say the media has done its share of harming the reverse mortgage’s reputation with half-truths, inaccuracies and outright misleading statements. Sure some media outlets have given balanced or positive coverage but are we controlling and shaping the message. The good news is that our industry is taking action. The National Reverse Mortgage Lenders Association in cooperation with several lenders is launching the “Extreme Summit”. Its a PR effort focused on geo-targeted advertising, driving positive impressions in the news and rebranding the HECM product itself.

The idea was born from a brainstorming session held at NRMLA’s 2012 annual meeting in San Antonio led by Liberty Home Equity Solutions CEO Otto Kumbar. Lender participants are putting there money where their mouth is committing over $2 million dollars to date. Such a campaign is critical since the perceived typical reverse mortgage borrower is becoming more scarce in light of reduced lending ratios and the financial assessment. If we let the media and general public push the erroneous notion the loan is only for the house rich and cash poor our marketshare stands to take another cut. Rather than playing damage control…

Tightening HECM Guidelines Opens Door for Private RMs

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Increasing Restrictions & Possible Lower Lending Limits May Spur the Return of More Proprietary Loans

Reverse Mortgage News

Having absorbed the recent elimination of federally-insured reverse mortage products, principal limit reductions and increased underwriting requirement many ask “when will we see proprietary reverse mortgages again?”. Good question. Presently our national lending limit remains at $625,500 through the end of this year thanks to HUD’s mortgagee letter in December 2012. Will HUD continue to extend this lending limit? Perhaps but unlikely. In the wake of a record 1.7 billion dollar bailout from the treasury and unrelenting scrutiny from lawmakers due to projected losses in FHA’s insurance fund, many may feel little sympathy for seniors with higher valued homes. In a risk-adverse and financially insecure political climate few will advocate for retirees they consider well-off. Additionally many industry leaders expect a return to a $417,000 national lending limit in 2014. Politics and budgets aside it comes down to the pivotal role of money. Mike McCully with New View Advisors said…

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