Interest rates are up, refi volume is down, and some mortgage originators are feeling the pinch. Cherry Creek Mortgage is helping its LOs bolster their game by teaching them how to add reverse mortgages to their product mix.
Leveraging the expertise of its subsidiary, 1st Reverse Mortgage USA, Cherry Creek is offering its LOs classes on how to originate HECM loans. In January, it launched HECM courses for its 300-plus loan officers, teaching them everything from Reverse 101 to how to originate successfully at the kitchen table.
“My goal is to grow the business of each loan officer at Cherry Creek by 15-25%,” said Dan Harder, vice president at 1st Reverse Mortgage USA.
“Some of our forward loan officers are down 20-30%,” Harder said. “What we’re doing is helping them grow their business by developing a business strategy that includes adding reverses to their platform.”
Harder said he believes that eventually all forward LOs will also originate reverse mortgages.
“I happen to believe that every loan officer on the traditional side in the next two to three years will be proficient in doing reverse mortgages,” Harder said. “I believe by the end of 2021, there will be mostly forward people doing reverse loans, just because of the sheer reduction in both the reverse and forward business and all of the consolidation.”
Harder acknowledged that lots of lenders are pushing reverse education on their forward LOs, but says there is a distinct way to go about this to achieve success.
For Cherry Creek, that includes about 30 hours of training and the help of a “reverse mortgage concierge,” a coach that assists each LO on their first five HECM loans before they are able to fly solo.
Harder stressed the importance of properly training and guiding loan officers before allowing them to originate a reverse, simply because the loan process is so specialized.
“All the material is controlled through us, and all operations goes through our shop, which means subject matter experts are processing, underwriting and closing these loans,” Harder said. “So I believe were doing our part in maintaining the quality and reputation of the product.”
Cherry Creek is currently listed as No. 16 on the latest Top 100 HECM Lenders list, but Harder said he expects the strategy to pay off in the coming year.
“I think we’ll start seeing some relatively significant growth here in 2019,” he said. “Nearly 75% of our loan officers will soon be able to do forward and reverses.”
“The traditional mortgage business is going through a major change right now,” Harder said. “In order for them to go back to what they thought was the norm, the loan officers have to find a way to fill that void, and one of the things they can do is look at reverses.”
“The HECM is a seriously, seriously important product for our economy in years to come,” he added. “Does that mean that in 2030 we're doing more reverses than forwards? Probably not, but it certainly bodes well for a traditional loan officer to act on the demographic trend.”