You might remember Coach Jimmy Dugan, played by Tom Hanks in the movie A League of Their Own. When his star player tries to sneak away to avoid playing in the World Series, Dugan intervenes. As he questions her, she reveals that her rationale for throwing in the towel is that baseball “is just too hard.”
Dugan is aghast. “It is supposed to be hard!” he exclaims. He reminds her that if it were easy, everybody would be doing it. And finally, Dugan proclaims in utter frustration, it is specifically the hard that makes baseball great.
How many times in our careers have we felt that HECM lending is just too hard? Every time a reporter takes a shortcut, does no independent research and just prints the same old saws? Every time a neighbor or friend recoils when you tell them you sell reverse mortgages? Every time the principal limit is reduced? Every time a referral partner slams the door on a discussion about how housing wealth can help his affluent clientele stay solvent throughout a retirement of 30 years or more?
All of us have felt the sting of rejection made all the more painful by how unjust it is. When I get a chance to talk about reverse lending in general, I mention how generous and patient our sales force is. Home visits (many of them) and endless reassuring phone calls with children, ministers, neighbors and even hairdressers/advisors are part of the job. I cannot think of another industry where the salesperson is so devoted to the client’s welfare and so willing to work months to put the client at ease.
Think about the 162 regular season games a ballplayer endures. In most places, it starts out in cold weather and progresses to blazing hot games, week after week, month after month.
The baseball season is the essence of hard. Small victories must be the catalyst for sticking with it while the number of games mounts slowly, inexorably. Setbacks cannot torpedo the fact that 162 games have to be played.
Isn’t baseball a perfect metaphor for our industry? We can all look back at small victories followed by heartbreaking setbacks. And it sure ain’t easy.
We know that, theoretically, our potential is massive. That keeps many of us in the game. Yet again and again, we move forward just to be slammed backward by yet another ill-informed article. And each loan is so precious, so hard to come by, that we are often unsure that reverse mortgage lending can provide a living, much less a career.
Objectively, however, we are in a better position than ever before. HUD continues to thwart the rogues in our business who do not act in the client’s best interest. Equity stripping is on the wane. The MMI Fund is rebounding and so are home values.
Scholars have discovered that housing wealth is another source of retirement income and that it may play a significant role in portfolio survival. Builders have found that whole new markets can be served if the HECM is part of the financing. Bankers are learning that a traditional HELOC cannot compare to a HECM LOC in durability, dependability and consumer protections. Planners are seeing that a growing LOC can hedge against interest-rate risk and housing value declines. The income gap in Social Security deferral years can be met by the HECM, as can long-term care needs.
So maybe we are only at game 30 out of 162. Yet, if we continue to collectively police the rascals and do what we do best, we can make it to the World Series. Imagine a market where the homeowner expects to use his accumulated housing wealth to smooth out the volatility facing him in retirement. How different our lives would be!
It will take tenacity, and almost unimaginable perseverance, to change how boomers and their advisors approach housing wealth. Yet HUD has given us a gift by encouraging American homeowners to use their home equity slowly, prudently and deliberately with very little upfront cost.
The resulting loan structure is not so easy to explain to the client or even the professional referral partner. So once again, the challenge to change is ours and ours alone. The stakes are huge and the need is great. Many retirees need accurate information now to be in the best position to protect their retirement needs.
There’s no point in whining about how hard it is. Just get out there and play ball.