Reverse mortgage demographics do not equal destiny

Pulling no punches, Dennis Haber suggests there is not enough ethical behavior in the mortgage business and he questions why. As executive vice-president, Consumer Equity, Garden City, N.Y., Haber says “part of the answer is that a lot of people in the mortgage business don’t know if they’re selling a product or providing a service. If you’re selling a product,” he explains, “all you care about is making a sale and you’re going to say and do whatever it takes to get [that] done.”

But, if you believe you are providing a service, according to Haber, “then you are going to make certain that what occurs is absolutely, positively in the best interest of the client and you are comfortable with the fact that sometimes you just have to walk away.” In his view, says Haber, “I believe [mortgage providers] are providing a service.”

Sharing the speakers’ dais with Haber at a recent industry conference, Neil Garfinkel, partner, Abrams Garfinkel Margolies, underscored the importance of ethical behavior, particularly in serving seniors. “There’s no room for any black eyes in the reverse mortgage community,” he declares, blaming unethical behavior as a prime reason for that undesirable result. Failure to maintain high standards, warns Garfinkel, “could really be the end of this [reverse] product.” He adds for emphasis that “there has to be an element that goes beyond [asking], ‘is this legal?’ It has to reflect that it’s also an ethical piece.”

Ethics and resulting reputation risk also drives media coverage, points out Jim Milano, an attorney with the Washington, D.C. firm, Weiner Brodsky Sidman Kider, who puts “negative press“ among the challenges for reverse mortgages today. “The demographics and the fundamentals of the business proposition are not only sound, but are compelling,” Milano notes. “But, demographics do not equal destiny.” Legal and regulatory burdens threaten the industry, Milano warned and mentions insufficient government appropriations; tax and insurance defaults; and over-regulation as other problems.

Written by Neil Morse

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