Reverse

Last Word: Serving Our Seniors

Written by John Smaldone, as originally published in The Reverse Review.

It’s been a tumultuous few years in the reverse mortgage industry, but it appears FHA’s HECM revamp is coming to a close. What does this mean? It means we will have to accept the program’s new shape and learn how to work with it. We will need to work closely with our senior clients and help them determine if this loan is truly a good fit for them. While recent program change may present challenges, it also provides us with an opportunity to better serve the senior demographic.

I believe the future is bright for the reverse mortgage industry. Don’t forget, there are 8,000 seniors turning 62 daily, and this trend is expected to continue for the next 15 to 19 years. Furthermore, the amount of equity many seniors have in their homes is growing daily. There is still tremendous potential to help thousands of seniors find a financial security in retirement.

Now, we just have to approach our clients differently, assessing the totality of their situation before knowing if this product is the right fit for them. While the more financially savvy may come to see the value in this product, there is still room for those who need to leverage their equity in order to pay medical bills or pay for daily living expenses.

In effect, the new rules give us the opportunity to be of greater service to these clients. Under Financial Assessment, a borrower’s willingness to pay their debts is going to be a major underwriting factor, and this will require us to spend more time with our borrowers, working through their financial status and history and talking about potential solutions that can address their specific problems. Originators will need to drill down to the details with their clients, asking: Have you made your personal debt payments on time? Have you made your existing mortgage payments and property charges on time? Is your total income sufficient to meet the obligations of the loan and still have some funds left over? Will a reverse mortgage positively impact your entire financial position? These are factors that will force us to really consider a client’s situation and what kind of solution would be best for them.

The job of a reverse mortgage originator comes with a unique reward: the ability to assist a senior in need of your financial guidance. There is nothing more concerning than a lack of financial insecurity, and having the tools to help someone free themselves of this burden is a tremendous thing. Whether you help save their home from foreclosure or assist them in finding a way to pay off an existing lien on their home, you can substantially improve their way of life. Today, originators have an opportunity to provide a greater degree of service for their senior clients by helping them find a solution that works best for them.

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