www.nrmlaonline.org The official magazine of the National Reverse Mortgage Lenders Association November/December 2023 Volume 16, No. 6 INSIDE: Adapting: Companies Regroup, Part 2 Appraisal Bias: NRMLA Attorneys Say Developments Require Your Attention P.24 P.28 COMPANIES REGROUP, PART 1 Observers See Opportunities for 2024 ADAPTING:
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From the Top Desmond Lenz, Director, American Pacific Reverse Mortgage Group By Darryl Hicks 10 Those We Help Reverse mortgage helps couple downsize By Darryl Hicks 33 November/December 2023 Volume 16, No. 6 Contents CRMP: Across the Kitchen Table A chat with Nan Glauser, CRMP, Loan Officer, Sun American Mortgage, Mesa, AZ By M. Diane McCormick 14 Features 18 Adapting: Companies Regroup, Part 1 Observers see opportunities for 2024 By Joel Berg 24 Adapting: Companies Regroup, Part 2 Lenders responded to challenges created in 2023 By Joel Berg 28 Appraisal Bias: NRMLA Attorneys Say Developments Require Your Attention Advisers stress that lenders must be proactive with bias policies By Thomas A. Barstow Columns 3 In Reverse Appraisal issues are just one part of a year of adapting By Thomas A. Barstow 5 Steve Irwin: Moving Forward Reinvention is one way to look at change 6 Servicing Corner What is all the fuss about occupancy? Departments 2 Scribes Meet this month’s contributors 7 Hey, Members A roundup of issues and news for NRMLA members 34 Member News Who’s who in reverse mortgages 36 Numbers Report assesses whether people are prepared for retirement PUBLISHER Peter Bell pbell@dworbell.com SENIOR EDITOR Thomas A. Barstow thomas.barstow@theYGSgroup.com ASSOCIATE EDITOR Darryl Hicks dhicks@dworbell.com MANAGING EDITOR Therese Umerlik therese.umerlik@theYGSgroup.com MANAGING EDITOR, DWORBELL, INC. Jessica Hoefer PRESIDENT Stephen Irwin NRMLA EXECUTIVE COMMITTEE CO-CHAIRS Scott Norman, Finance of America Reverse Michael Kent, PHH Mortgage Corp. dba Liberty Reverse Mortgage DESIGNER Christel Emenheiser ADVERTISING SALES Natalie Matter Bellis natalie.matterbellis@theYGSgroup.com Reverse Mortgage is the official publication of the National Reverse Mortgage Lenders Association. The magazine is published every two months. For inquiries regarding association membership and/or magazine subscriptions, please call Darryl Hicks at 202-939-1784. Advertising and editorial inquiries should be directed to Natalie Matter Bellis (natalie.matterbellis@ theYGSgroup.com) and Therese Umerlik (therese.umerlik@theYGSgroup.com), respectively. Association & Subscription Contact: National Reverse Mortgage Lenders Association 1400 16th St., NW, Suite 420 Washington, DC 20036 202-939-1760 lross@dworbell.com Industry: www.nrmlaonline.org Consumers: www.reversemortgage.org Advertising & Editorial Contact: National Reverse Mortgage Lenders Association 1400 16th St., NW, Suite 420 Washington, DC 20036 202-939-1760 ©2023 National Reverse Mortgage Lenders Association
Scribes Meet This Month’s Contributors Thomas A. Barstow (In Reverse, p. 3, and Appraisal Bias, p. 28) is the senior editor for Reverse Mortgage magazine. Barstow has had a 38-year career in journalism that includes being a reporter, writer or editor in Maryland, North Carolina, Pennsylvania and New York. He currently teaches journalism at Gettysburg College and writes for various business publications. He is a former president of the Pennsylvania Society of News Editors and a former president of the Associated Press Media Editors in Pennsylvania. Joel Berg (Adapting, Part 1, p. 18, and Adapting, Part 2, p. 24) has been a business-to-business reporter and editor for more than 20 years, both in-house and freelance, covering finance, healthcare, environmental regulation and general business news for local, regional and national publications. Most recently, he was editor of the Central Penn Business Journal and Lehigh Valley Business in Pennsylvania. He also taught writing and communications at York College, Millersville University, Gettysburg College and Harrisburg University. Darryl Hicks (Hey, Members, p. 7, From the Top, p. 10, and Those We Help, p. 33) joined NRMLA in May 1999 and currently serves as vice president, communications. Hicks writes the Weekly Report newsletter, administers NRMLA’s social media accounts and websites and manages the CRMP designation. Steve Irwin (Moving Forward, p. 5), president of NRMLA, oversees the association’s initiatives to serve as an educational resource, policy advocate and public affairs center for consumers, lenders and related professionals. His background includes experience with strategic planning, organizational design, portfolio acquisition, risk management and quality control. He received his B.A. from Grinnell College and his MBA from the University of San Francisco. M. Diane McCormick (CRMP: Across the Kitchen Table, p. 14) is a freelance journalist and former legislative press secretary. She covers issues involving a variety of national business associations, as well as basic and higher education. Her 2017 book, Well-Behaved Taverns Seldom Make History, explores Pennsylvania pubs where rabble-rousers stirred up trouble, from the American Revolution to Prohibition. Precise Control. Expert Execution. ASSET MANAGEMENT SOLUTIONS Five Brothers’ reputation for integrity, accuracy, and reliability has been built upon a relentless drive towards customer satisfaction. For over 55 years our expertise in nationwide field services, advanced technologies, and unrivaled Reverse/HECM/FHA expertise continues to build value for our customers, while improving communities across the country. Experience the Five Brothers difference… stronger results from the ground up.™ www.fivebrms.com • 855.552.8020 Inspections • Property Preservation • Violation Resolution Utility Management • Registration Services • Hazard Claim Repairs REO Asset Management and Disposition Safe. Sound. Secure. 2 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
In Reverse Appraisal Issues Are Just One Part of a Year of Adapting By Thomas A. Barstow A FEW YEARS ago, I was discussing current events in a journalism class I teach when a student mentioned how more states were decriminalizing marijuana. That sparked a lively discussion about whether all states should do so or whether a national law should be passed. The students who felt adamant about decriminalization made logical and informed arguments. But I felt a responsibility to point out that even though they might think those with different points of view are wrongheaded, they needed to tread carefully about how they applied their knowledge. If they use pot and get caught in a state where it still is illegal, they might regret that decision for the rest of their lives. I thought about that recently as I listened to arguments about appraisal bias and differing points of view about whether it is a systemic problem and how the valuation process involves some level of subjectivity. The various viewpoints are worth discussing and analyzing and are certainly interesting. But ignoring current trends could be disastrous. As you know, after the mortgage crisis in the mid-2000s, regulators at the time put in place rules that separated lenders and appraisers so lenders did not unfairly influence valuations. Recent events, however, have led federal regulators to publish preliminary guidelines noting that lenders have a responsibility to ensure a fair appraisal process. You might think that is contradictory and unfair because of the rules put in place years ago—and you probably make good points—but it won’t really matter if you get caught in a situation where you are accused of bias. Intentional discrimination has been illegal for decades. Yet, unintentional or subconscious bias can get you into trouble, as well. That is why you need to develop detailed policies and procedures for handling bias claims, according to the attorneys at Weiner Brodsky Kider PC. The Washington, DC, law firm counsels NRMLA and its members on legal matters. “Lenders have some responsibility when they know— or should have known—that discriminatory practices may be afoot, even though they generally are supposed to be hands off with respect to appraisal matters because of appraisal-independence requirements,” says Jim Brodsky in the article Appraisal Bias (p. 28). “They have a legal obligation to intervene.” The article offers numerous tips on what companies should do to protect themselves. The federal government’s work on appraisals is just one of many issues that evolved this year and will continue into 2024 and beyond. Writer Joel Berg explores some of the trends in a pair of articles, starting with the cover story Adapting, Part 1 (p. 18) that looks ahead to 2024 and then continuing with the second article Adapting, Part 2 (p. 24) that primarily focuses on lessons learned in 2023. This year hasn’t been easy for anyone in the mortgage industry—forward or reverse—and next year looks like it will be a challenge, too. In Reverse continued on page 4 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 3
“Adapting,” the theme of the articles, seems to be an operative word for industry leaders, who keep finding opportunities in the reverse mortgage arena. Those ideas include determining how to better market a HECM for Purchase to seniors looking to downsize while building relationships with the builders, financial planners and others who understand the power of the various products. “This year alone, we have signed agreements with two of the largest homebuilders in the country and are now working with their teams to educate them about how reverse mortgages work and how they can help bring more buyers to the table,” Chris Mayer, CEO of Longbridge Financial, tells Berg. Several new companies are seeing the potential of reverse mortgages and have entered the market this year, Berg also reports. Mayer suggests those actions are another sign of the continuing acceptance of reverse mortgages. This issue also marks the return of Servicing Corner (p. 6), which gives practical advice about the rules involving occupancy. This might be another area where people think the regulations are a nuisance—and they might make great points. But they, too, ignore the requirement at their own expense. Hefty fees can hit your borrowers if they don’t take occupancy certifications seriously, as pointed out in the column titled What Is All the Fuss About Occupancy? “If borrowers fail to certify their occupancy, in writing and in a timely manner each year, they risk their loan being called due and payable and being referred to an attorney to begin foreclosure proceedings,” says the column submitted by Celink. Education—as with appraisals, informing skeptics about reverse mortgage products or any other matter—is key. “Educate your borrowers,” Servicing Corner advises. “Explain their obligation, and set their expectations in advance so they can avoid this pitfall.” In Reverse In Reverse continued from page 3 LET US PROTECT YOUR ASSETS SERVICES Preservation Inspection Title and Diligence Property Maintenance & Tenant Services Appraisal & BPO REO Asset Management Vacant Property Registration & Utility Processing GuardianAssetMgt.com Guardian Asset Management is an industry leader providing our clients a comprehensive range of solutions to help manage and maintain their properties effectively yielding the highest return. 4 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
Moving Forward Reinvention Is One Way to Look at Change 2024 Will Require New Approaches on All Fronts By Steve Irwin, President, National Reverse Mortgage Lenders Association A RECENT OPINION piece in The New York Times by Brad Stulberg resonated with me. “… [S]o many people have fraught relationships with change,” he said. “We deny it, resist it or attempt to control it—the result of which is almost always some combination of stress, anxiety, burnout and exhaustion. It doesn’t have to be that way.” Stulberg is clearly advocating for us all to embrace change—to learn and grow from it. While I couldn’t agree more, I also believe the change we embrace is not merely the change that confronts us daily. The time has come for us all to recognize that the coming year will necessarily require us to be agents for change. We must purposefully reinvent our products, our ways of interacting with consumers and counterparties and tirelessly pursue changes to our product offerings. Here at NRMLA HQ, we will continue to support the reinvention of the Federal Housing Administration (FHA)-insured HECM program, which is indeed a unique public policy solution to the financial challenges faced by the U.S. aging population. There are no quick and easy fixes, but thoughtful refinement can ensure the longevity of this critically important program. For example, there are opportunities to explore—and advocate—a true risk-based HECM model. Adjustments to the initial mortgage insurance premium must be carefully considered in those cases, where the risk to the product’s insurer, FHA, is mitigated by draw limitations and improvements to the collateralized property. We must also reinvent our customer service deliveries, whereby, at each point in the reverse mortgage life cycle, the customer is delighted by improved response times and the impressive offerings of a robust variety of communication methods. Sales approaches will need reinvention. An ever- increasing amount of customer data and sales experience needs to be analyzed and shared. Sales teams will need to reskill to take advantage of the power of analytics tools, artificial intelligence and chatbots. NRMLA itself will need to continually improve its engagement with its membership, our regulators and the government authorizers of the HECM program. I am committed to exploring more robust digital member engagement and heightened data analysis in the coming year. While we may make some missteps and experience some setbacks, the time has come to have our industry leapfrog into a more modern and flexible marketplace. I look forward to working with you all to embrace the challenge of industrywide reinvention. Onward. Steve Irwin “We have to give ourselves permission to fall down and to have missteps and set-backs in order to grow and be unapologetic about our journey.”—Thasunda Brown Duckett, President and CEO, TIAA REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 5
Servicing Corner DID YOU KNOW that 70 percent of borrowers whose loans are called due for not certifying their occupancy end up having that due and payable status rescinded in 60 days or less—but not without incurring unnecessary costs? One of the most frequent inquiries HECM borrowers make is about their annual occupancy certification requirement. Surprisingly, many borrowers do not understand this annual obligation and are surprised when they receive a request from their servicer to certify their occupancy. Originators can help alleviate their confusion by having a discussion with borrowers during the origination process and again right after closing to remind borrowers of this important obligation. The definition of a borrower’s principal residence may be found in 24 Code of Federal Regulations § 206.3 Definitions. The § 206.27 Mortgage provisions require that the mortgage is due and payable if: • The property ceases to be the principal residence of a mortgagor borrower for reasons other than death and the property is not the principal residence of at least one other borrower; or • For a period of longer than 12 consecutive months, a mortgagor borrower fails to occupy the property because of physical or mental illness and the property is not the principal residence of at least one other borrower. If borrowers fail to certify their occupancy, in writing and in a timely manner each year, they risk their loan being called due and payable and being referred to an attorney to begin foreclosure proceedings. If this occurs, default fees, such as property inspection, preservation and attorney costs, will be incurred and charged to the loan. If borrowers are truly complying with their occupancy requirement but not attesting to their occupancy of the subject property in writing, this can be a costly mistake. Servicers make every effort to prevent this type of default, including by doing the following: • The first certification request is mailed within 30 days of the loan’s closing anniversary. An email may also be sent if the borrower’s email address is passed to the servicer at boarding; a notification is posted to their online account, if applicable; and a reminder message may appear on their monthly account statement. • If the borrower doesn’t reply, a second letter will be mailed 30 days later. • After another 30 days, a phone campaign begins to reach the borrower. This includes contacting authorized third parties on the account and alternative contacts listed on the loan application. • Property inspections and door knocks are ordered as applicable. If all efforts prove unsuccessful, servicers have no other choice than to submit the loan to the U.S. Department of Housing and Urban Development for approval to call the loan due and payable. How Can You Help? Educate your borrowers. Explain their obligations, and set their expectations in advance so they can avoid this pitfall. Encourage them to open their mail when they receive it, don’t let it pile up and don’t discard letters, especially coming from their loan servicer, without opening them. You may even suggest they set a calendar reminder on the anniversary date of their closing every year to trigger their memory that their annual occupancy certification is due. This column was submitted by Celink. What Is All the Fuss About Occupancy? You Can Help Borrowers Understand Occupancy Rules 6 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
NRMLA Submits Comments to HUD on Second Appraisals On a frequent basis, NRMLA submits comments on behalf of its members to the U.S. Department of Housing and Urban Development (HUD), Consumer Financial Protection Bureau (CFPB) and other federal agencies in response to proposed regulatory changes or when the government seeks private-sector feedback. In July, HUD asked industry stakeholders how it can make its programs easier to access and use. In response, NRMLA submitted comments on August 15 that proposed opportunities for streamlining the process of requiring second appraisals. Based on member feedback, the value of second appraisals tends not to deviate from the first appraisal by more than ten percent in most cases, according to NRMLA. “Given this low rate of discrepancy, exceptions to the second appraisal requirement can be made with minimal risk to the Mutual Mortgage Insurance Fund or HECM borrowers,” NRMLA says. “Exemptions to the second appraisal requirement would also reduce costs to seniors, who typically pay for the second appraisal.” NRMLA, for example, proposed that second appraisals be waived when the appraised property value is more than ten percent greater than the highest possible maximum claim amount for HECMs in a particular year. You can read NRMLA’s comment letter in its entirety at https://bit.ly/3sgHyYm. FHA Updates Processes for HECM Borrower Payments If a mortgagee is unable to process payment requests or otherwise fulfill its obligations, the Federal Housing Administration (FHA) has taken steps to be better equipped to step in and assume those responsibilities. On July 11, FHA published Mortgagee Letter 2023-15, which: • Provides additional sources from which FHA can receive notice of a mortgagee’s anticipated or actual default on borrower payments; and • Requires mortgagees to provide FHA with borrower payment information when FHA determines the mortgagee is unable or unwilling to make the required borrower payments. NRMLA submitted comments and recommended certain changes to the draft version of the mortgagee letter when it was posted on the Single-Family Drafting Table, some of which were incorporated into the final version of the mortgagee letter. An important takeaway is FHA once again used its Single-Family Drafting Table to seek industry input before it published a final version of the mortgagee letter. NCOA Resource Guide Helps Older Adults Living Alone Social isolation is a growing problem for older adults, which is why the National Council on Aging (NCOA) published a resource guide over the summer for people who are living alone to empower them to thrive independently and access essential services. “As you age, living alone can present various challenges, including social isolation, limited access to essential services and potential health risks,” NCOA says. “Approximately 27 percent of U.S. adults aged 60 and older were living alone in 2020, according to the Pew Research Center, and this number is projected to increase A Roundup of Issues and News for NRMLA Members By Darryl Hicks Darryl Hicks Hey, Members Hey, Members continued on page 8 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 7
as the Baby Boomer generation reaches retirement age. These individuals may face difficulties with daily activities, such as transportation, meal preparation and home maintenance—all of which have a direct impact on their overall health and wellness.” The resource guide includes information on what to consider to successfully age in place, organizations that can help, and links to programs and resources. Access the resource guide at https://bit.ly/45CNRq4. Former Ginnie Mae President Offers Way to Protect Issuer Liquidity NRMLA has worked closely with the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration (FHA) over the previous year to recommend policies that will help address liquidity challenges still present in the marketplace. Ted Tozer, who served as president of Ginnie Mae from 2010 to 2017 and is now a nonresident fellow at the Urban Institute, published a white paper on August 2 that offers a solution to enhance the liquidity of issuers of FHA-insured forward mortgages and reverse mortgages during economic disruptions to avoid future bankruptcies. “To ensure independent mortgage banks (IMBs)— which are critical actors in the lending market—don’t collapse during the next major recession, Ginnie Mae can consider guaranteeing short-term IMB funding,” Tozer says. “Guaranteeing short-term IMB obligations would ensure adequate funding during times of market stress and would encourage banks to continue to lend to their nonbank counterparts.” To relieve some of the pressure on IMBs, Ginnie Mae could use federally backed mortgages as collateral. You can read the white paper at https://urbn.is/3YQ6PY8. Axios/Ipsos Poll: One in Five Americans Don’t Think They’ll Retire A lot of polling is done to assess Americans’ state of retirement preparedness. Most results say the same Hey, Members Hey, Members continued from page 7 8 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
thing: Americans who haven’t yet retired say they are unprepared for retirement, unsure of how to prepare and unsure if they even want to fully retire. On July 20, a poll of 1,238 Americans 18 and older conducted by Axios/Ipsos caught my attention because it found that one in five Americans don’t think they’ll ever retire. Of that group, 70 percent said they can’t or won’t be able to afford to retire versus 19 percent who just don’t want to retire. An additional ten percent picked “other” as a response. People are split on whether they will retire when they expect. Thirty-six percent plan to retire on time, 23 percent reported they will have to retire later than expected and 40 percent said they aren’t sure if they will retire at the time they expected. You can read more interesting statistics from the same poll at https://bit.ly/3qynmmT. New CFPB Issue Spotlight: Medical Debt and Older Adults The Consumer Financial Protection Bureau (CFPB) has focused its attention lately on the huge amount of medical debt being billed—sometimes inaccurately—to older adults. In 2020, nearly four million adults 65 and older reported having $53.8 billion in unpaid medical bills despite 98 percent of them having health insurance coverage. Nearly 70 percent of these older adults reported having medical insurance coverage from two or more sources. CFPB released an issue spotlight in May that describes how the medical billing system can leave older adults with inaccurate bills, collection and credit reporting on amounts they do not owe. These challenges can be particularly difficult for older adults, especially those who face health issues, or functional limitations or live on a fixed income. You can read a copy of the report at https://bit. ly/44jTWGE. FHA Publishes Mortgage Documents in More Languages To help accommodate Americans whose first language is not English, the Federal Housing Administration (FHA) in June launched a resource page that includes more than 30 single-family mortgage documents and related resources used in the origination of FHA-insured mortgages, including HECMs, in Chinese, Korean, Spanish, Tagalog and Vietnamese. The translated documents include the U.S. Department of Housing and Urban Development (HUD) Addendum to the Uniform Residential Loan Application (HUD 92900-A) required for all FHA-insured single-family mortgages; model documents, including mortgage notes and riders used in FHA forward and HECM transactions; and required borrower disclosures. These documents are intended to assist lenders, servicers, housing counselors and other FHA program participants in explaining information related to FHAinsured mortgages to those with limited English proficiency prior to borrowers executing legal documents in English, as required by law. You can visit the resource page at https://bit.ly/3R5ahfJ. U.S. Median Age Hits Record High The 2021 census continues to yield interesting statistics on the U.S. population. In mid-June, the U.S. Census Bureau released new statistics in its Vintage 2022 Population Estimates that show the nation’s median age increased by 0.2 years to a record 38.9 years between 2021 and 2022. A third (17) of the states in the country had a median age above 40 in 2022, led by Maine with the highest, at 44.8, and New Hampshire at 43.3. Utah (31.9), the District of Columbia (34.8) and Texas (35.5) had the lowest median ages in the nation. Hawaii had the largest increase in median age among states, up 0.4 years to 40.7. In 2022, seven counties had median ages at or above 60: Highland County, VA (60.0); Charlotte County, FL (60.2); Jefferson County, WA (60.4); Harding County, NM (60.5); Jeff Davis County, TX (61.7); Catron County, NM (62.1); and Sumter County, FL (68.1). Read the report at https://bit.ly/3KTEomb. Submit Your Questions or Comments I’d also like to use this column to respond to questions you may have about NRMLA, the CRMP designation, or anything that’s on your mind. Send your questions or comments to dhicks@dworbell.com. Hey, Members REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 9
BASED IN ROSEVILLE, CA, and founded in 1996, American Pacific Mortgage (APM) is a national, independently owned and operated retail mortgage lender that has funded over $22 billion annually. In 2005, the company expanded into reverse mortgages. For much of the past decade, it has consistently ranked among the top 20 reverse mortgage lenders in the U.S. Desmond Lenz, CRMP, has overseen the reverse mortgage division since its inception. Lenz got his start in the mortgage business in 1992, originating Federal Housing Administration, U.S. Department of Veterans Affairs, conventional and construction loans. Reverse Mortgage magazine sat down with Lenz to find out how he got his start in reverse mortgages, what factors have contributed to his division’s success and what his priorities are for 2024. Reverse Mortgage: How did you get your start in the reverse mortgage business? Desmond Lenz: I started originating traditional mortgages in 1992 and ended up at American Pacific Mortgage in 2000. I started looking for a niche. Traditional mortgages were interesting, but I started researching reverse mortgages. I liked the demographic, and I liked what the loan could do. I view it as a financial tool that can do a lot of things for a lot of people. I went to the ownership of the company, and they said, “We don’t currently do them. If you want to do reverse mortgages, you must do the research, you must get trained and you must pay for whatever needs to get approved.” We got trained and started originating loans. We did that for about five years when it became really evident that reverse mortgages were a different animal compared with traditional mortgages. My loan processor did forward mortgages and reverse mortgages. She disliked reverse mortgages because they took longer and were so different. We launched the reverse mortgage division in 2005 as a separate platform within APM to funnel reverse mortgages so that we had the expertise and the oversight. RM: How did you find out about reverse mortgages? DL: I read about them, and about seven years earlier, somebody came into the office and said, “Hey, I do reverse mortgages.” I had no idea what they were, but we talked a little bit. Nothing developed from that conversation, but it planted a seed so that later, it was like, “Hmm! Let me read about these; let me do some exploration.” Through the research, that’s where the interest grew, and it was, “Oh, look what this could do.” RM: Tell us about American Pacific Mortgage and what distinguishes it from other lenders. DL: APM is licensed in 49 states, employs more than 3,600 people and has around 160 branches. What I like about the company, what distinguishes it for me, is its stability. We have an executive team that is good at looking down the road and asking, “Where’s the market going? Where do we have to be to not only survive but thrive?” That’s how APM navigated 2008, 2020 and right now, which gives us the platform and the framework to have our reverse mortgage group and to have the doors open every day. Our superpower in the reverse group is our people. We’ve got a team with a lot of experience. I spoke with two people in the office today, and both reminded me that they had been with the company since the reverse mortgage division was launched 18 years ago. Our company is built on a purchase business model on the forward side, so it’s face-to-face. You know your realtors; you know your borrowers. That is a superpower for us because our loan officers sit with the clients and Desmond Lenz, Director, American Pacific Reverse Mortgage Group By Darryl Hicks Desmond Lenz From the Top 10 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
From the Top From the Top continued on page 12 discuss how the reverse mortgage works. We’re not the No. 1 originator in the business. We know it, and that’s OK. We know who we are. We service our branches well. We want to do more business organically by growing the knowledge within our forward loan officer network. At the end of the day, I think that we’re good at knowing who we are and taking great care of clients. RM: How many people are part of the reverse mortgage team? In how many states do you offer reverse mortgages? DL: We have 19 people in various roles. We are licensed in 49 states. A lot of our business comes from the Western U.S., so California, Oregon and Washington, but with that said, we obviously do loans throughout the nation. When a loan officer in one of our branch offices encounters a prospective reverse mortgage client, our job is to educate the loan officer. We provide the quotes and the loan packages so that the loan officer has all the right information for the client’s situation, including the right product for them. Our job is to support their efforts so that the expertise that they may not have, we do have, and we fill in the gaps for them so that the clients are well taken care of. RM: That sort of answers my next question, which is do you allow the forward mortgage salespeople to originate reverse mortgages, or does a firewall separate the two? It sounds like you do allow them to originate reverse mortgages, but it’s managed within your department. DL: That’s a good way to put it. Our culture at APM is a culture of choice. A lot of top-producing, forward loan officers don’t want to do reverse mortgages because they don’t want to learn it. They don’t spend the time, and you get that, so they’ll just refer it over and we’ll take care of it. Other loan officers say, “This is my realtor’s mom; I want to be the originating loan officer.” We’ll put them through training sessions, run the quotes, provide the information and, as you say, manage it within our group to help that loan officer compliantly take care of the client. RM: You’ve managed the reverse mortgage division since 2005 and consistently rank in the top 20 when it comes to reverse mortgage originations. To what do you attribute your success? DL: This gets back to what I said earlier, which is we know who we are. We focus on our business model. We’re not going to suddenly buy a bunch of TV time or hire a professional spokesman. We’re going to connect with realtors and financial advisers, and we’re going to help our branches have conversations with those professionals. That way the industry professional can refer their clients to our loan officers with the knowledge that this loan is going to help the client financially—to afford the services that they need in their life. At the same time, they can do strategic things to help them get through retirement without running out of money. Another big focus is insurance. The rising cost of homeowners insurance is becoming a big problem not only in California but across the country. Here’s another funding source that could help somebody stay in their house and afford the coverage that they should have. RM: Interesting. I had never considered that sales angle before, but it makes sense. DL: Yeah, we’re talking to insurance agents saying, “Hey, your client may not be able to get insurance right now. In California, three major carriers—that comprise most of the market share in the state—stopped writing new policies for the most part.” There’s an insurance outlet in California called the Fair Plan, and the example an insurance executive gave me was, “Look, you go from $1,200 a year for your current policy. Now, you must go to the Fair Plan to find coverage, and it might be, depending on where the property is located, $5,000 a year. Plus, you have to get a wraparound policy for liability and the other coverages, and that’s another $1,500. So, the policy went from $100 a month to $550 a month.” It’s not just California that has a problem. It’s a United States problem. It’s a world problem. Watch the news. Everywhere there are wildfires, tornadoes and other disasters. If you want to stay in your house and your insurance suddenly goes up five times what it used to be, that’s a problem. We’re looking for a way to help clients. That’s a place where they’re going to have a pain point where we can help. REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 11
From the Top RM: On its website, APM proudly promotes community involvement for its employees, health and wellness, diversity, etc. What can you tell me about these initiatives? DL: It comes from the top, the ownership and executives saying, “We care about the communities that we’re succeeding in. We care about the people we hire. What can we do to support them?” We have a charitable arm called APMCares. Loan officers can make contributions on a per-closed-loan basis to the fund, and their branch and APM corporate will make matching contributions. You might have a food bank in your neighborhood that you want to support. You can put in a request to APMCares, along with a dollar amount for the donation. Sometimes, they’ll provide the amount requested, while other times they might contribute more. At times, financial assistance is provided to an employee of the company who’s experiencing a tough time, maybe the loss of a spouse or family member or a medical issue. The whole concept is that we’re not just doing loans. Yes, we’re helping people solve financial problems, but we care about our communities. We care about the people we work with, and I give the company a ton of credit. We recently had a golf tournament that raised $25,000 for the APMCares Fund. RM: Are there particular approaches to marketing and lead generation that you try to instill in your salesforce? DL: We don’t do TV ads. We don’t buy leads. As a rule, that’s not how we’re structured as a company. We look at it and say, “Here are our loan officers. What have they been doing to be successful in the past?” Well, in the past, they’ve been successful with realtor referrals. They have relationships out there. They go to meetings and do those kinds of activities. What do we do to support that? We’ll do a reverse-for-purchase presentation geared toward realtors. The loan officer fills the seats, and we provide the content. It gives them the opportunity to not only provide information for their current realtor network, but it starts a conversation with prospective realtor partners. The idea is to support what our loan officers have done in the past to succeed. Let’s figure out ways that we can provide support that will help them build their business, forward and reverse, and in the process we all win. If I help you win, I’m going to win because there’s going to be a reverse mortgage done. When you’re meeting with realtors, financial planners and CPAs and showing them how a reverse mortgage can benefit their clients, there’s somebody sitting there thinking, “I want one of these myself. I personally need the benefit of this.” Just putting on the presentation a lot of times yields loans because somebody needs it for themselves. We aim to help our branches do a great job at what they’ve already been doing to succeed. That’s really our game plan. RM: What are your professional goals for 2024? DL: No. 1 is navigating this market. We’re going to add more reverse mortgage loan officers to our team. We’re going to train more forward loan officers. When I attended NRMLA’s Western Regional Meeting in June, I took my own mini-survey and asked our investors, “Where’s the gold?” And they kept saying a forward mortgage loan officer’s past client database. I agree. We’re a large company with a large database of closed loans with people turning 62 or 55 every day. The opportunity is there. It’s in our database. You don’t have to go out and broadcast and try to find these people. They already know, love and trust the loan officer who helped them buy a home. This is a huge opportunity. We’ve begun working on that and finding out that there are things you need to figure out to get the forward loan officer connected to their past clients about reverse mortgages. If you think about what that could do for our industry, it’s huge. The conversation for forward loan officers and their past clients, and also the realtors, is something like, “Darryl, you have a very low interest rate, 3.0 percent, fixed rate. Correct? Yes. Do you want to give that up? No. What’s the benefit of having that low rate? It’s a low payment. What if I could show you no payment? Would you be interested in looking at that?” That’s the conversation: getting people to get away from having a target fixation on that low rate and to focus on the opportunity that might be provided by looking at a different strategy with a reverse mortgage. In 2024, there will be a lot of effort to get that message across to our forward loan officers so that they can do some business and help more people. That’s the goal. From the Top continued from page 11 12 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
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CRMP: Across the Kitchen Table Nan Glauser NAN GLAUSER ORIGINATES forward and reverse mortgages, but reverses are her favorite. She loves the moments when clients feel their financial worries ease, such as the widower who fretted about paying a $900 mortgage on a monthly income suddenly slashed to $1,500. “To see the relief on his face, knowing that the $900 payment was going away, was wonderful,” Glauser says. “It freed up the cash flow in his life. That’s why I keep Kleenex in my office. He was so thankful.” Glauser earned her CRMP in 2022, achieving a goal of demonstrating her mastery of reverse mortgages. In the ten years since discovering the field, she has seized the opportunity to make a difference in the lives of her clients through keen professionalism, mindfulness honed by yoga and a healthy sense of humor. Glauser is committed to a mortgage career in beautiful southern Utah, although she was born and raised in northern Utah. First, she was a stay-at-home mom for 25 years, raising her eight children. When her youngest was in kindergarten, her husband was diagnosed with a brain tumor, and she joined him working in sales in the door and window business. After her husband died in 2006, she continued working in doors and windows until 2013, when one of her daughters suggested Glauser join her in mortgages. She had to be asked twice but decided to make the leap. She started as a processor but soon discovered the appeal of working directly with people. “I would get chills when I called them to say things like, ‘The settlement is scheduled,’” she says. “I love the collaboration part. I love working with the clients. Mortgages are quite creative. It’s taking the clients’ income, their situation and finding the best loan program for them.” Before long, her son-in-law, who was and still is part of the team with her daughter, suggested that she could be well suited to reverse mortgages. Potential clients, he said, seemed more comfortable sharing their lives and finances with her instead of a young loan officer. “Oftentimes, I relate with clients because I’m in their same age group,” Glauser says. “That’s very fun. I love listening to the stories. I love the associations. Many of us are good friends still.” In 2018, Glauser was thrilled when she and her team joined Sun American, a pioneer in originating reverse mortgages in the Southwest. “We know our stuff,” she says. “We have insight. We have a lot of experience. I know that my back-end team is a huge support for me, and it makes my clients’ experience so much smoother.” As Glauser found joy in originating reverse mortgages, she felt a need to become known as a specialist. A colleague in compliance mentioned that a CRMP CRMP Has Fun When Helping Others A Chat With Nan Glauser, CRMP, Loan Officer, Sun American Mortgage, Mesa, AZ By M. Diane McCormick 14 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
CRMP: Across the Kitchen Table projected that level of professionalism, and Glauser decided to go for it. “Any loan officer can be a reverse mortgage loan originator, but this gives you that extra level of knowledge and ethics,” she says. “CRMPs are known for their ethics and experience. I wanted to provide that for my clients.” She spent about five months studying, taking copious notes and saying key points out loud because “you just don’t know what you’re going to be asked.” Test day at the exam center gave her newfound empathy for her college-age kids, taking the test on a computer and getting teary-eyed when the “pass” message appeared on the screen. Glauser uses various methods to attract clients and spread the word about reverse mortgages. Approachable messages and videos on social media help demystify reverse mortgages for potential clients. She also conducts reverse mortgage classes for real estate agents and talks to divorce lawyers and financial planners. Sometimes, they tell Glauser they occasionally have someone who might benefit, but they haven’t known where to send them. Glauser even wraps pickle jars in labels printed with her contact info and the question, “Are your clients in a pickle?” Catchy marketing makes her top of mind when lawyers and financial planners need another tool to problem- solve their clients’ dilemmas. As one lawyer told her, “I love little dill pickles. I don’t have any reverse mortgage clients currently, but I’ll keep your card in my drawer.” Pickles are just one measure of the fun Glauser brings to her surroundings. Consider the Facebook video of her in a cow costume for Halloween. She first wore that costume because she and a daughter, who is an actress, decided to attend a cast party dressed as cows. She appeared in a son’s classroom dressed as a leprechaun for St. Patrick’s Day, starting a ten-year tradition of popping into the school on a surprise holiday dressed as Cupid, a turkey or whatever else the day called for. Amid the silliness, Glauser stays grounded by getting together with her children and 12 grandchildren whenever possible and by hiking in Utah’s breathtaking Red Rock region, including such favorite spots as nearby Zion National Park or the Pine Valley Mountains. In 2016, she turned her love for kundalini yoga into a teaching practice, introducing students to the art of conscious awareness. She has earned her 200-hour teacher certification and is pursuing her 500hour certification. “Yoga and meditation cause me to be centered, breathing deeply and coming back to the present moment,” she says. “That’s my favorite practice. It’s breathing and living in the moment.” The life-changing practice injects consciousness into every aspect of Glauser’s daily life, including her work with clients. “I love to listen to them and simply be with them,” she says. “It’s the contentment of being present. It helps me be calm in situations that may be difficult. You just come back, take a deep breath and say that it’s all going to work out.” Glauser’s role as an educator continues in her professional life. She tries to dispel myths about reverse mortgages and teaches appreciative real estate agents to avoid the missteps that can spike a reverse mortgage deal. “You don’t have to know the whole thing,” she tells them. “Here’s something in your back pocket so you can talk intelligently with your clients or be able to say I know someone who can help you.” She hopes to do more teaching and is writing content for online videos, perhaps destined for a dedicated YouTube channel. Many of her clients are former snowbirds who settle permanently in the warm and welcoming community of southern Utah. She sees herself as a connector, linking people not just with the most suitable mortgage product but with a good dentist or anything else they may need because they’re new in town. Licensed in Utah, Arizona and Nevada, she often works with clients over the phone and virtually. “I’ve sat at kitchen tables where a reverse mortgage just helps people with their monthly bills,” she says. “Not only that, but it can also be an investment strategy. It’s really worth it to me.” Sitting down to talk numbers with clients can be confusing, but she is there to explain each step, “and we do that together.” “I like bringing light and peace and love to their lives, along with homing in on the financial component, which is so vital for their everyday living,” Glauser says. “I try to make a difference and bring some light and the best outcomes and circumstances to all of my clients’ lives. That’s my hope.” REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 15
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Adapting: Part 1 continued on page 20 WHILE THE REVERSE mortgage market may have been soft in 2023, industry executives remain optimistic about 2024. They are drawing hope from an influx of new companies in the space, the continuing well of untapped home equity and their own efforts to broaden the appeal of the reverse mortgage. ADAPTING: COMPANIES REGROUP, PART 1 Observers See Opportunities for 2024 By Joel Berg REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 19
Adapting: Part 1 continued from page 19 “We believe that we’ll look back on this year and say that while it wasn’t the best year the industry’s ever had, it was an outstanding year to really find our core, return to the basics and go forward with some real momentum,” says Scott Norman, vice president of field retail and industry relations at Finance of America Reverse LLC (FAR). The Potential Several key statistics over the years have helped originators gauge the potential market for reverse mortgages. But those most often cited include the trillions of dollars in untapped home equity and the growing population of Americans over 62. In September, NRMLA estimated that Americans 62 and older held $12.69 trillion in home equity in the second quarter of 2023, down only slightly from a peak of $12.72 trillion in Q2 2022. “There is plenty of equity for seniors to use for a better retirement,” says Chris Mayer, CEO of Longbridge Financial. Many seniors are starting to realize that home equity can be a significant source of retirement funding, adds Norman. “I don’t think there is any question that in the conversations seniors are having with their financial planners and their retirement specialists, they are realizing that we are in a very different retirement world today than we saw even ten years ago,” he says. They also are realizing that home equity represents one of their major assets if not their primary asset. “When we review the conversations we are having with financial planners around the country, we have seen a shift toward utilizing housing wealth,” Norman adds. Boots on the Ground For several players in the reverse market, the focus this year has been engaging and educating forward lenders as a key element of widening the distribution network. “In the forward space, most mortgage lenders are still not presenting reverse mortgages as options to their clients,” Mayer says. But, he adds, “as more forward lenders are looking at entering the reverse business, it’s a great opportunity for those lenders to better serve their borrowers.” To build on the potential, Longbridge has identified wholesale lending as an important part of the Scott Norman AllegiantReverse.com 844.808.8299 Nationwide Full-service title & settlement services in all time zones, backed by the largest underwriters in the country. REVERSE DONE RIGHT E cient A comprehensive and ecient process that ensures accuracy and makes your job easy. Experienced The strength, dedication & accuracy you need to close your reverse mortgage transactions successfully. Your Partner In Success Seasoned, reliable experts with a proven track record and years of successful closings. Customizable Process A dedicated, friendly & trustworthy settlement team matched to the unique needs of your process. 20 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
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