Why these mortgage companies are teaching their LOs to originate reverses

Is versatility the secret sauce to success in a competitive landscape?

Traditionally, mortgage originators have focused on standard loan products, referring out prospects interested in reverse mortgages to specialists who work only with those loans.

But now, as the mortgage lending landscape becomes increasingly constricted, do LOs who can handle both forward and reverse origination themselves have a better shot at success? And, for those lenders trying to keep their HECM divisions afloat in the face of plummeting volume, will teaching reverses to their forward-focused LOs help them recover volume?

Live Well Financial says yes.

The Virginia-based lender and servicer has been originating conventional, VA, FHA and reverse mortgage loans since 2005. Last year it hired well-known HECM trainer Dan Hultquist and began offering classes to its 500 forward-focused correspondent/wholesale LOs.

“We wanted to give them the tools that they need to generate some business,” said wholesale lending SVP Josh Moran. “We offer bimonthly training sessions on all aspects of the HECM program, from working with financial planners to working with Realtors to answering the family’s questions.”

So far, Moran said the effort is paying off.

“We’re reaching a much broader audience and some of our forward shops, which normally would have passed this referral on to a buddy or to a bank that does reverse, are now training their LOs to intelligently sell the program,” Moran said. “In the past year, we’ve seen two dozen brokers on the forward side who have never touched a reverse do their first reverse with us.”

Jim Cory, senior vice president of operations at Live Well, said the company’s cross-pollination policy has attracted HECM LOs looking to expand their reach.

“We are working with brokers who have been doing just reverse for the past decade and have been feeling the squeeze since the numbers contracted. We’re working with them to generate some forward business as well,” Cory said. “Live Well is positioning itself as a specialist that offers both.”

Live Well is not the first to push this idea.

C2 Financial, a California-based brokerage that is among the largest in the nation, launched a reverse mortgage training program two years ago in a bid to grow its HECM market share.

Christina Harmes, who runs the reverse division alongside her father, Scott, said teaching C2’s forward-focused LOs about reverses made sense.

“Forward loan officers who have been in the business for a long time, like most loan officers at C2 Financial, have a very large client base they have developed great relationships with over the years,” she said. “These clients look to them for all of their mortgage advice, including when it comes to getting a reverse mortgage.”

C2 doesn’t hire newbies, instead it brings on LOs who have considerable experience. Harmes said this is key to making their HECM strategy work.

“Our loan officers have been in the business on average for 15 years, so naturally their client bases are going to be a bit more mature and they are looked at as trusted advisors by their clients,” she said. “When you have a group of very experienced, knowledgeable and versatile professionals, adding a new skill like reverse mortgages is reasonable.”

But Harmes warned that the crossover strategy isn’t going to work for everyone.

“A forward shop of newer loan officers who are all cold calling, I wouldn’t expect to have very much success,” she said.

Harmes said that success incorporating HECMs into your portfolio depends on the loan officer’s specific client base and marketing targets. For those who have clients over 60, she said presenting a reverse mortgage as an option is a must.

“Our experienced loan officers take the long-term goals into account for any mortgage planning they help their clients with,” she said. “Forward loan officers are the trusted advisor their client base has been looking to for years, and this is just the natural next step in people’s lives.”

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