As a reverse mortgage originator, one should never discount the importance of the elevator pitch. Successfully generating interest up front with listeners by clearly describing the reverse mortgage provides the opportunity to dig deeper into the product to explore how it will specifically benefit them. Because the balance of the conversation deals with significantly more complex issues and concepts, the words and phrases we employ become that much more critical. I’ve learned that two factors lead to understanding and sound decisions: First, highly developed listening skills are essential. Second, a well-composed and rehearsed set of descriptions and explanations that are clearly delivered and easily understood increase the opportunity for an appropriate use of the reverse mortgage.

Discovery/Listening

Before Jim Garner was retained as our celebrity spokesperson at Financial Freedom, I was invited to be videotaped for the company’s promotional CD and future television commercial. Asked on camera to comment on the use of a reverse mortgage, I said that one fundamental question was essential to the reverse mortgage discussion: “If additional cash or income were available, would the homeowner attain greater peace of mind or an improved quality of life?” That question became the theme of the CD and the TV spots that followed. Our conversations with senior homeowners must unearth the facts that answer that fundamental question. Together we must identify the problems and circumstances that stand in the way of reaching those goals, and we must allay the fears that often exist as a result of misinformation and misunderstanding.

Every reverse mortgage prospect is searching for a solution to a problem or the foundation of an opportunity. Some are big. Some are small. Some are critical and some are not urgent at all. And sometimes they are hidden. Enter into every reverse mortgage discussion with the attitude that the secret to achieving the prospect’s goal is waiting to be discovered. Effective listening delivers the eureka moment. The discovery occurs when a reverse mortgage is the solution or part of a solution. Not only are we required to listen carefully if we want that discovery, but if we listen to the words and tone used by our prospect in describing their situation or dreams and then reflect back what we hear using their own words and phrases, we will be significantly more effective in communicating the reverse mortgage solution.

Loan officers can gain a great advantage by learning a technique that therapists call reflective listening. The approach arose from Carl Roger’s school of client-centered therapy. As employed across the kitchen table, reflective listening involves understanding a speaker’s idea and then reflecting that idea back to the speaker to confirm that the idea is correctly understood. There are a couple of key elements to reflective listening when talking with a homeowner. First, summarize what the speaker said, thereby mirroring his essential concept. Recap the message by combining the prospect’s words and phrases with your own. Reflect the prospect’s specific point without venturing into subjects that will come later in the conversation. For example, a familiar comment made by reverse mortgage prospects is, “I’ve heard that with a reverse mortgage, the bank can take my house.” One appropriate reflective listening response would be, “It would be scary to enter into a loan where the bank could come in and take your house away.” The loan officer has acknowledged the fear and can then explain the fallacy of this popular misconception. By using the reflective listening approach, she has accomplished more than simply addressing the concern. She has let the speaker know that she listens and that she has respect for his concerns. Trust has been gained and the homeowner is more inclined to accept the explanations and suggestions offered by the loan officer.

Word Pictures and Metaphors

Once trust has been solidly established, the conversation should lead into a deeper discussion of actual circumstances, the values, needs and objectives of the homeowner, and the mechanics and benefits of the reverse mortgage solution. I believe that performing as a skilled speaker is the second most important capability that a loan officer needs to nurture.

Because the reverse mortgage is a difficult product for many people to comprehend, techniques that make understanding easier are essential. I have found that the use of visualizations, or word pictures and metaphors are effective techniques when presenting complex concepts or ideas. Figurative language is a powerful strategy when developing a mature and effective communication style. From similes to metaphors to personification, taking words beyond their literal meaning through the use of figurative language is one of the most effective tools in a loan officer’s bag. (I just used a metaphor!)

Our jobs include making the complex and counterintuitive reverse mortgage easy to understand. Knowledge about how traditional mortgages work can get in the way of comprehending the concepts and mechanics of the reverse mortgage. Even some intelligent people have difficulty understanding how it will work for them. When prospects can’t grasp the complexities or recognize how a reverse mortgage will be beneficial, it often helps to paint a word picture. We can effectively use similes and metaphors to explain or communicate a concept by likening it to something else. Our familiarity with one allows us to understand the other. Having an arsenal of such descriptions ready for common occurrences will serve reverse mortgage professionals well.

Recently, I worked with a woman who warned me at the outset that she had difficulty with math and numerical concepts. Over the next few weeks she proved her assessment accurate.

During the process she confused equity, the source and application of available funds and payments, and the accrual of interest and MIP. Frustrated, I finally remembered a metaphor formerly used by a well-known financial advisor: buckets of money. I explained that with her reverse mortgage, the $550,000 value of her home would be divided into five separate buckets. $11,540 would be placed in the first bucket to pay for the up-front fees and costs of the loan. The second bucket would contain the $50,000 required to pay off her current mortgage. $99,800 would be placed in the third bucket and from that bucket the lender would remove $700 each month to send her monthly tenure payment. The fourth bucket would contain $99,800, the balance of the cash available (the line of credit). From bucket number four, she could take funds as she needed them over the life of the loan. The fifth and last bucket contained her remaining equity. No one would touch that bucket until she died or sold her home. Then, the lender would remove the cash required to pay off the loan from bucket five and send the remaining funds to her or her heirs. She got it! From there it became easy to expand the analogy to describe some of the finer points of reverse mortgages. For example, she was able to understand that every month, additional money would be placed in her fourth Line of Credit Bucket as a result of the reverse mortgage’s credit line growth. Similarly, I was able to explain that if the value of her home increased over the life of the loan, additional money would be put into her fifth Equity Bucket. Since then, I have successfully used the buckets of money analogy with other prospects.

Other metaphors have become regular staples in my reverse mortgage repertoire. When asked if it’s a good idea to shop around, I answer that it may be helpful. Then I explain that getting a reverse mortgage is like buying a Chevy or a Ford. They all come out of one factory (HUD) and are all the same. Shopping effectively means selecting the right “dealer.” I then go on to present my strengths and those of my firm. My borrowers almost never talk with a competitor.

For prospects who are unsure or nervous about the application process, I describe the path step by step. Then I tell them that my role is like that of an airline pilot. “When you board the flight you want to sit back, relax and not worry. It’s my job to steer the plane, handle turbulence and get you to your destination on time. You can rely on me to minimize your involvement and to keep you informed of our progress.”

It is common for many homeowners to have serious trepidation about tapping into their home’s equity. I have found that a discussion like the following often goes a long way to diminish their fear: “Thirty years ago you paid $67,000 for your house. It’s now grown to $600,000. If you had deposited $67,000 into a savings account in 1985 and somehow had forgotten about it until this year and then discovered that it had grown to $600,000, would you have any trouble withdrawing some of the money to improve your lifestyle? Well, your house is an investment like that. When you step on the floor, touch a doorknob or turn on a faucet, you are touching your asset. All you are doing with a reverse mortgage is giving yourself permission to turn some of that asset into liquid cash that you can spend now.” Nearly all seniors will grant themselves permission to tap into their home equity asset after accepting this metaphor.

Mental images are easier to remember and relate to than financial concepts and processes. Metaphors allow prospects to clearly see our product and its benefits. Decisions about whether a reverse mortgage is the best solution will come quicker and with greater certainty for prospects who see the product in their mind’s eye. You will leave every encounter knowing that you have provided a valuable service; you have presented a clear picture of the good that lies ahead, and that the homeowner can attain greater peace of mind or an improved quality of life with a reverse mortgage.