Four More Reasons to Attend NRMLA’s Annual Meeting & Expo The 2016 Annual Meeting & Expo is your time to reconnect with contacts and grow your network, get the latest news and updates from industry experts, and give back to Chicago’s seniors through our volunteer service project.

Network

The meeting is the industry’s largest annual gathering of reverse mortgage professionals from across the country. From planned meetings with your team to impromptu conversations with new contacts at The Bridge Networking Lounge, there’s time and space for you to get together at the conference hotel.

Learn

Not your typical classroom lectures, sessions at the Annual Meeting & Expo are designed for maximum engagement. We’ll be evaluating the borrower experience, from pre-application to the end of the loan, and discussing opportunities to simplify and clarify the process. Speakers will take you on a deep dive into the counseling session, the loan documents, the closing, the hand-off from closing to servicing, and repayment. View a preliminary agenda at nrmlaonline.org.

Earn CE Credits NRMLA will offer eight continuing education credits that you can apply toward your annual NMLS license renewal or the Certified Reverse Mortgage Professional designation. The Ethics Workshop that all CRMP applicants must complete prior to taking the examination will be offered Wednesday, November 16, from 1:30 p.m. to 3:30 p.m.

Serve

NRMLA has organized a volunteer project on Sunday, November 13, in partnership with Little Brothers – Friends of the Elderly, Chicago Chapter, a nonprofit dedicated to relieving isolation and loneliness among the elderly. With the generous support of our sponsors, holiday and birthday gifts were purchased for nearly 1,000 Chicago seniors. Volunteers can choose from two shifts (9 a.m. to 11 a.m. or 11 a.m. to 1 p.m.) to help package gifts and creatively decorate the gift bags.

Join your colleagues in Chicago, November 14-16, as we discuss enhancing the reverse mortgage borrower experience during the largest gathering of reverse mortgage professionals each and every year, the 2016 Annual Meeting & Expo. Learn more or register at nrmlaonline.org.

Equity Extraction Discussed at Retirement Forum

Among the topics discussed at the 18th Annual Meeting of the Retirement Research Consortium, held August 4-5 at the National Press Club in Washington, D.C., was a comparison of equity extraction methods and their impact on the financial well-being of seniors presented by Dr. Stephanie Moulton of the Ohio State University.

From her research, “How Home Equity Extraction and Reverse Mortgages Affect the Financial Well-Being of Senior Households,” Moulton found that HECM borrowers showed a spike in credit card balances prior to loan origination, and then a sharp decline in credit card balances that persists thereafter. She pointed out that this is a unique pattern not observed for other extraction channels. It may indicate a need for liquidity that is met with credit cards in the short term, and then substituted with home equity borrowing through a HECM. To the extent that HECM borrowing is lower cost than credit card borrowing, it could lead to improved financial well-being.

Social Security Replacement Rates Declining for Younger Couples

Retired baby boomer couples receive less from Social Security compared with their parents and the “replacement rate” will diminish further as Generation X couples prepare for retirement, according to a new study published by the Center for Retirement Research at Boston College.

“Social Security is essential to Americans’ retirement security,” according to the CRR’s Squared Away Blog. “But the prevalence of women in the labor force today has diminished its importance to most married couples and can have a big impact on their retirement planning.”

When Social Security was created in the 1930s, women were largely homemakers whose pension benefits were based on the earnings of their breadwinner husbands. Today, women make up half the U.S. labor force, but Social Security’s design has remained largely unchanged. The result has been a steady decline in married couples’ replacement rates—the percentage of the combined earnings of two working spouses that Social Security replaces when both retire.

Financial Advisors Adapting to Longevity, But Slowly

The financial planning industry is adapting to longer life spans and retirements, but not as quickly or aggressively as it should, according to a survey of 348 advisors conducted by InvestmentNews.

“I think there are going to be an awful lot of people whose lifestyle is going to be dramatically impacted,” Harold Evensky, chairman of the planning firm Evensky & Katz, told InvestmentNews contributor Elizabeth MacBride in her article, “The Longevity Paradox.”

According to survey results, financial advisors use an average lifespan of 91 for men and 94 for women when structuring retirement plans. While those numbers are appropriate for today, researchers agree that a “longevity boost”—possibly caused by better cancer detection methods and healthier habits—will occur; they’re just not sure when or from where it will occur, or which group of people it will affect most.

In the meantime, financial advisors are telling clients to save more and work longer. The InvestmentNews survey found that 65 percent of advisors are telling clients to delay claiming Social Security benefits, while 54 percent recommend lower withdrawal rates as a way of dealing with longer lifespans.

MacBride says some children may expect an inheritance in the form of the family home. But as reverse mortgages and home equity loans become more popular, especially to finance unexpected health care costs, those real estate windfalls are likely to decline in number. Reverse Mortgages in the News

• The biggest issue facing the reverse mortgage industry continues to be a lack of understanding about reverse mortgages among consumers and policymakers. That’s according to NRMLA President & CEO Peter Bell, during a Q&A with Scotsman Guide editor Will McDermott. “People seem standoffish about reverse mortgages, but when you talk to them about the reasons for that, it’s generally based on information that they’ve heard somewhere that’s not correct,” said Bell. When asked to describe the average reverse mortgage borrower, Bell replied, “Every case has a different set of circumstances and a different motivation.” A growing area is the use of reverse mortgage proceeds as a cash reserve, so that people can draw on them when they have peak demands for cash, thereby allowing other assets to remain intact and continue to grow in value and pay dividends.

• All is not lost for people who are approaching retirement with little or no savings, writes Nerd Wallet personal financial columnist Liz Weston in her article, “A Hail Mary Retirement Plan for Those With Nothing Saved.” Consider working longer and delaying Social Security. “Every year you wait past age 62 adds about 7 percent to 8 percent to your eventual benefit,” says Weston, who advocates turning to one’s kids, exploring public benefits and tapping home equity. In addition to downsizing, homeowners should consider a reverse mortgage, which “can give you a lump sum, a stream of monthly checks or a line of credit you can tap as needed.” Weston interviewed New Jersey resident Walt Lukasik, 60, who has started investigating a reverse mortgage to salvage retirement plans that were upended by his wife’s cancer diagnosis 15 years ago. “If he applies for a reverse mortgage in two years,” says Weston, “it could pay off the $75,000 balance on their current mortgage and give them a monthly payment of about $390.”

Proper Steps for Submitting Ethics Complaints

NRMLA encourages members to let us know when they encounter a questionable advertisement, or inappropriate conduct by a reverse mortgage professional, either through direct contact or through one of your clients. We ask that members please submit complaints using the official Ethics Complaint Form so that we can conduct a proper investigation and determine whether further action is warranted.

The Standards & Ethics Committee has the authority to impose penalties that include probation, suspension or termination of membership. More serious complaints, or complaints involving non-members, are submitted to authorities, such as FHA, Federal Trade Commission and state attorneys general, for further review and follow-up action. If you have any questions, please email Darryl Hicks at [email protected].

Congratulations, David Guelff

NRMLA congratulates David Guelff of American Capital Corporation, based in El Segundo, California, for earning the Certified Reverse Mortgage Professional designation.

Guelff has originated mortgages at ACC for more than 20 years and has specialized in reverse mortgages for nine years. He is the 145th person to earn the CRMP designation. All CRMPs are prominently displayed on the NRMLA consumer website, reversemortgage.org. Information on the qualifications and steps for becoming a CRMP can be found on nrmlaonline.org.