The Reverse Review May 2008

May 2008
THE
REVERSE
“Forward Thinking in Reverse”
review
Volume I, Number 2
Ethics Must Define the Reverse

Mortgage Industry
Retain a positive consumer perception
by integrating ethics into your company
mission.
John LaRose
Reverse Market Outlook

Read about the risks and opportunities
of originating in the reverse mortgage
industry.
John Lunde
Wall Street Prefers LIBOR

HECM’s
LIBOR vs. CMT: Find out which HECM
is better for your borrower.
Jerry Wagner
ALSO IN THIS ISSUE

The Blueprint for Making Your Company
• Are You Sending the Right Markeng
“Brand New” Message?
Stephen Kinney • Building the Reverse Mortgage Sales
PAGE Whether you are seeking to reestablish or Strategy from the Ground Up
• Understanding Reverse Mortgage
24 repurpose your existing brand, or start a new one,
learn how to set your company apart from the rest. Loan Servicing Concepts
• Looking at the Reverse World from a
“Forward” Thinker
NewOpportunitiesInReverseMortgageLending
ForFHAApprovedandNonFHAApprovedLenders
1st Reverse Financial Services, LLC, a 1st Reverse Provides:

subsidiaryofafederallycharteredinstitution, x CompleteTrainingProgramsfortheOrigination
exclusivelyprovidesbanksandmortgagelenders andProcessingofReverseMortgageLoans
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Experience 1st Reverse
For lending professionals only and not intended for consumer “Concierge” Level Service and Support
distribution. © 2008 - 1st Reverse Financial Services, LLC.
THE
Cover Story
REVERSE review
The Blueprint for Making
Your Company “Brand New”
May 2008
by Stephen Kinney
Volume I, Number 2
11 Ethics Must Define

the Reverse Mortgage 24
Industry
Formalize a code of ethics for your
organizaon to set yourself apart as 20 Are You Sending the Right Marketing
an industry leader.
Message?
by John LaRose
Long-term care is a family issue, but it is more
oen a woman’s issue. Are you targeng the right
14 Building the Reverse
audience?
Mortgage Sales Strategy by Valerie VanBooven
from the Ground Up
Learn to improve your sales strategy
22 Wall Street Prefers LIBOR HECM’s
by adding to your pre-exisng There has been a lot of buzz about the LIBOR
arsenal of skills HECM. Read the historical analysis of the LIBOR
vs. CMT
by Monte Rose
by Jerry Wagner
29 Reverse Mortgage Outlook
Taking a look at the growing risks and rewards of
an ever changing reverse mortgage marketplace.
by John Lunde
31 Understanding Reverse Mortgage
Loan Servicing Concepts
Are you familiar with the costs of reverse
mortgage loan servicing? Here are a few things
the basics your need to know.
by David J. Cesario
5 Note From the Editor
6 Ask the Underwriter

If you would like to
by Ralph Rosynek
8 Industry Snapshot contribute an arcle for a
future issue, please email
33 Directory
your arcle for review to
34 The Last Word: editors@reversereview.com
Looking at the Reverse World from a “Forward”
Thinker by Lisa Schreiber
THEREVERSE review
THE
REVERSE review
Editor Aman Makkar
Copy & Design Editor Harpreet Makkar
Production Manager Jason Westbrook
Sales Manager Gina Smiar
Printer The Ovid Bell Press, Inc.
Contributing Authors
Ralph Rosynek
John Lunde
Monte Rose
Valerie VanBooven
Jerry Wagner
Stephen Kinney
David J. Cesario
John LaRose
Lisa Schreiber
Advertising Information
Rates, specificaons, and deadline informaon available.
phone : 858-217-5332
email : adversing@reversereview.com
Subscriptions and Editorial Content

phone : 858-217-5332
email : informaon@reversereview.com
website : www.reversereview.com
THE
REVERSEreview
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© 2008 The Reverse Review, LLC. All rights reserved. The Reverse Review, LLC is a California limited
liability company and is the publisher of The Reverse Review magazine. Reproducons or distribuon of
any materials obtained in the publicaon without wrien permission is expressly prohibited. The views,
claims and opinions expressed in arcle and adversement herein are not necessarily those of The Reverse
Review, its employees, agents or directors. This publicaon and any references to products or services
are provided “as is” without any expressed or implied warranty or term of any kind. While effort is made
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responsible for any errors, misprints, or misinformaon. Any legal informaon contained herein is not to be
construed as legal advice and is provided for entertainment or educaonal purposes only.
Postmaster : Please send address changes to The Reverse Review, 10801 Thornmint, Ste 250, San Diego, CA
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4 May 2008 reversereview.com

Note From the Editor

I would like to start by thanking our authors, adversers, advisers, and my
staff for helping make the premier issue of The Reverse Review a tremendous
success. The feedback we received has been overwhelmingly posive, and
the relaonships we have started to build are priceless. I have personally
learned more in the last couple months while creang this magazine than
I would have ever imagined. I must admit, we have been fortunate to
collaborate with wonderful individuals who are very passionate about our
industry.
As some of you know, many of my experiences have come from the online
world. Over the last five years in the Internet space, we have become
accustomed to developments like social networks, blogs, online video sites,
etc.. Many of you have heard of MySpace, Facebook, Wikipedia, YouTube,
and the like. Many of us have even started our own blogs, created websites,
or created personal or business profiles on one of the many social networking websites. These online
portals all have one thing in common: user generated content (UGC).
The key to UGC is that all content created is by the end user. Now, think about the impact user generated
content has had on our society. Without people like you and I geng online and creang this content,
many of these companies would not exist. The big successes of companies like YouTube and MySpace are
simply due to the fact that normal people like us get online and create profiles or upload videos. The web
has given us the ability to express ourselves in any way we would like.
User generated content has become so powerful and mainstream that this year quesons for the
presidenal debates were brought in from users on YouTube. In another example, earlier this year,
Apple lowered the price of it’s iPhone shortly aer it’s launch. Many buyers who had paid a higher price
were furious. Collecvely, the online voice was so powerful that “protests” on chat forums and blogs
lead Apple CEO Steve Jobs to refund $100 to thousands of his customers. (WOW! I know I’ve bought a
computer before and within weeks aer my purchase it was a few hundred dollars cheaper. I need to
start protesng online!)
Point being, the future of our society is not about a few people running the show, but about everyone
geng involved, expressing their opinions, and making their voices heard. I believe the inial success
of our magazine was truly the success of our authors and everyone else involved. The Reverse Review is
a magazine and website in which we want everyone’s parcipaon, comments, and feedback. Anyone
who chooses to can be an author and have their opinions heard. Therefore, every month we invite new
authors to contribute, and if we haven’t invited you, we ask you to invite yourself by sending us an email
at ugc@reversereview.com.
Thank you, and we look forward to hearing from you soon!
Aman Makkar
Editor
May 2008 reversereview.com 5

THEREVERSE review
Ask the Underwriter

by Ralph Rosynek
Q: Recently one of my loan files was

suspended by the Underwriter for
addional comparables. When I
more current than not – the comparable sale date ages
should be less than 90 days if at all possible. Be aware of
the number of days on the market for a property – that is
checked the appraisal I was confused as a big indicator as to the stability, supply and demand for
all comparables indicated by the appraiser properes in the neighborhood.
appeared to be within HUD guidelines more “closer” than not – the comparables should be less
making the loan insurable – so why is the than ½ mile if at all possible and represent similar types
underwriter suspending the file? of neighborhoods – the further the comparable is from
the subject, the greater the likelihood that there are other
A: The Secondary Market connues to become more

conservave in reviewing and accepng collateral.
Unfortunately, many mortgage professionals and
factors which could effect its appropriateness as a value
support for the subject property.
more similar than not –the lot and physical structure
appraisers have not been keeping current with the various
type/age/design of the comparable should be as similar
changes in market values.
as possible to our subject – look at the pictures of all
Remember, the investor manuals, handbooks and comparable as compared to the subject.
suggested review procedures are just as presented more “toward the middle” than not – the final value
– guidelines for collateral analysis and not hard and fast rules suggested by the appraiser – is it more in the “middle”
in many cases. than at the upper end of reconciled values. Generally high
end values should be avoided in markets where declining
Reverse Mortgage Loans carry a dual collateral values, over supply, or unstable condions are noted by the
performance requirement. The loan must be “insurable” by appraiser.
FHA/HUD guidelines and it must also be “saleable” in the
Secondary Market. Also, look at the date of your appraisal as opposed to the
date of your submission to underwring and the esmated
In the case of your queson, there would appear to be closing date. For example, a 45 day old appraisal, while
a disjoint between current secondary market standards and “current” could contain comparables that as of the date of
insurability. More than likely, the Underwriter is requesng the report were already 120 days old, which now are 165
addional comparable informaon because the 3 current days old and will possibly be 6 months or more old by the
comparables may meet HUD guidelines, but one or more me the analyst in the Secondary Market reviews the file for
may be unacceptable to the Secondary perhaps because of purchase and pooling.
its age, locaon or the number of days on the market prior
to sale. Think of the changes that have occurred in many housing
markets in the past six months and ask yourself, what is
Addionally, if the property is located in a declining the likelihood that properes similar to the subject would
market, the appraiser may not have made the appropriate/ connue to hold their values?
necessary adjustments or commented sufficiently to support
the value indicated. Lastly, impress upon your appraiser to provide supporve
comments and jusficaons for choices and values beyond
In general, be aware that the review of comparables the “standard” language. While it is the Underwriter who
has become much more conservave than in the past – a determines the final value of the subject property, it takes
quick review list for comparables prior to submission for a team effort. There is plenty of “room” for the appraiser
underwring should indicate the comparables as compared to provide addional narrave support in the report and in
to the subject property are:

most cases, that addional informaon would be of benefit

to the underwriter and the borrower(s). HUD Foundation Specialists
Q: Is it permissible to take a HECM applicaon prior to

counseling?
The originaon of a HECM loan is a two-step process M

Manufactured
actured Hou
Housing
sing
A: involving the actual compleng of the forms as well
as compleon of required counseling. There is no
prohibion to taking an applicaon prior to counseling,
Troubleshooters
Trouble
however, no services resulng in costs to be paid for by FFoundation

the Borrower(s) can occur prior to counseling and the nnspections, Upgrades
Borrower(s) properly execung the counseling cerficate.
& Repairs
My queson would be more common sense in
approach – knowing the added value and protecons to the
Borrower(s) which counseling provides, is it in the Senior’s EEngineer
best interest or the Originator’s best interest to engage the Certificatio
C ons
applicaon process prior to counseling?
Please take a moment and provide us your feedback

which we will feature in next month’s column.
A note about our subject maer expert: Mr. Rosynek has
been involved in mortgage lending for over 30 years with the
last 5 + years exclusively providing reverse mortgage lending
soluons. To contact Mr. Rosynek or to learn more about 1st
Reverse Financial Services, please visit www.1streverse.com
or call 877-574-1000.
Have a question for the underwriter?

Send your questions to
asktheuw@reversereview.com
Private Label Reverse Private Label Loan

Mortgage Sub-Servicing Origination System
Your “Go To” Team for Reverse Mortgage Solutions
Marc Helm • 281-404-7824 • mhelm@rmsnav.com
Ken Austin • 281-404-7825 • kaustin@rmsnav.com
Reverse Mortgage Solutions, Inc.
2727 Spring Creek Drive, Spring, TX 77373
FannieMae
www.RMSnav.com

THEREVERSE review
Reverse Mortgage Industry Snapshot

As Of March 2008
Stascs Provided by Reverse Market Insight
Top 10 Rankings by Region

Endorsements Active Lenders Region Share
Rank Chg Region 2008YTD YTDChg% 2007TOT 2008 Chg% 2008YTD Chg%
1 1 Southeast/Caribbean 7,404 20.94% 24,014 474 132.35% 24.249% 15.11%
2 -1 Pacific/Hawaii 5,994 -13.42% 25,612 454 50.83% 19.631% -17.59%
3 - Mid-Atlantic 3,692 13.67% 11,956 213 88.5% 12.092% 8.19%
4 - Midwest 3,234 3.49% 11,434 279 48.4% 10.592% -1.5%
5 2 Southwest 2,653 27.43% 8,073 178 79.8% 8.689% 21.28%
6 -1 New York/New Jersey 2,229 -4.05% 8,322 171 85.87% 7.30% -8.67%
7 -1 New England 1,769 -16.4% 6,963 191 59.17% 5.794% -20.43%
8 - Northwest/Alaska 1,678 12.69% 5,790 170 84.78% 5.496% 7.26%
9 - Rocky Mountain 1,052 20.37% 3,296 105 50.0% 3.445% 14.56%
10 - Great Plains 828 9.09% 2,827 94 91.84% 2.712% 3.83%
Industry Totals 30,533 5.07% 108,287 1,666 75.37%
10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates.
Also includes acve lenders and growth
Lender Distribuon by YTD Growth Rate
Growth Rate Lenders YTD MIC Last YTD

-100% 210 1,250
-99% to -1% 361 13,081 21,971
0 to 100% 223 5,851 4,278
101% to 200% 71 2,830 1,194
201% to 300% 26 549 161
301% to 400% 13 192 42
over 400% 46 2,876 165
New Lenders 926 5,154
Lender distribuon graph and table, showing number of lenders growing at various growth rates YTD vs. prior
YTD, including volume aributable to each group of lenders.
Client Noces
1) Help improve data quality in the Reverse Mortgage industry. If you believe your company’s numbers on this report are inaccurate, please email us
(support@rminsight.net) and we will review your feedback promptly. Please include your name, company and contact informaon along with a thorough descripon
of the suspected inaccuracy. Thanks!
2) If you received this report as a trial or sample and would like to purchase this report or future reports for your company, please visit: www.rminsight.net/MICreports.
php
3) If you’ve been looking for a source for Reverse Mortgage intelligence beyond MIC endorsement numbers, we’ve got just what you need. Find out more at www.
rminsight.net/rmarket.php

24 Month Penetraon and Unit Volume

12,000 1.60%
1.40%
1.20%
10,000
1.00%
Penetration
0.80%
Units
0.60%
8,000
0.40%
0.20%
6,000 0.00%
2006-4 2006-8 2006-12 2007-4 2007-8 2007-12
MIC Units Penetration %
2 year trend graph of monthly HECM unit volume and industry penetraon against 62+ homeowner households naonally.
Appendix
1) All stascs based on retail originaons from HUD’s Monthly HECM MIC reports
2) Loans are in unit volume, based on HUD reported mortgage insurance cerficate issuance
3) Lenders are aggregated using HUD’s lender idenficaon numbers and unique lender names, along with feedback from
reporng lenders
HUD Regions and Corresponding States/Territories
Region 1 - New England Region 3 - Mid-Atlanc Region 5 - Midwest Region 7 - Great Plains Region 9 - Pacific/Hawaii
Conneccut Delaware Illinois Iowa Arizona
Maine District of Columbia Indiana Kansas California
Massachuses Maryland Michigan Missouri Federated States of Micronesia
New Hampshire Pennsylvania Minnesota Nebraska Hawaii
Rhode Island Virginia Ohio Nevada
Vermont West Virginia Wisconsin Region 8 - Rocky Mountain
Colorado Region 10 - Northwest/Alaska
Region 2 - New York/New Jersey Region 4 - Southeast/Caribbean Region 6 - Southwest Montana Alaska
New York Alabama Arkansas North Dakota Idaho
New Jersey Florida Louisiana South Dakota Oregon
Georgia New Mexico Utah Washington
Kentucky Oklahoma Wyoming
Mississippi Texas
North Carolina
Puerto Rico
South Carolina
Tennessee
U.S. Virgin Islands

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Ethics Must Define the Reverse Mortgage Industry

by John LaRose
When headlines out of Capitol news: Am I taking a stand against unscrupulous business
Hill in 2007 touted passage of an ethics pracces? Am I willing to sacrifice profits for principle? Am I
overhaul bill, I have to admit I was turning out the predatory and welcoming the principled?
unimpressed. Before it even came up for a If not, consider our landscape from this view:
vote, Congress was hailing the work as “a • Reverse mortgages soared from 7,800 in 2001 to 107,500
landmark ruling … historic, momentous.” in 2007.
Ulmately, the bill passed the House, 435 • The 308,000 Americans who have taken out reverse
to 11; the Senate, 83 to 14. Barely had the mortgages since 1990 represent a mere 1 percent of the
President’s signature been affixed to the senior home market.
legislaon than there came reports of members of Congress • Every day for the next 18-20 years, more than 8,000 of
who had found ways to skirt the bill’s intent regarding travel the esmated 76 million Baby Boomers will turn 62 and
expenses. become eligible for a reverse mortgage.
• Older adults now hold $4.3 trillion in home equity;
Well in advance of the iniave, Jeff Rundles, former by 2030, when the youngest Baby Boomers rere, it’s
editor for ColoradoBiz, said, “Legislang ethics is like esmated the total in home equity held by Americans 62
capturing air in your fist.” I couldn’t agree more. and older will top $37 trillion.
Yet, Rundles’ take on codes of ethics runs somewhat But look carefully for what else is on the horizon:
counter to mine: he says, “the ethical don’t need them and • 172 U.S. lending operaons (and counng) have
the unethical won’t heed them.” On that, I disagree. imploded in the sub-prime bust—filing bankruptcy,
ceasing or liming operaons, or being acquired in a fire
A code of ethics is a window into the soul of a company. sale.
It says: we value partnerships, but not at the cost of our • 100,000-plus mortgage workers are jobless, according to
values. It says: our integrity is not for sale. the U.S. Bureau of Labor Stascs.
So what does Capitol Hill’s ethics bill have to do with us? It follows that at least some out-of-work sub-prime
Plenty, if we don’t want to risk having our industry’s ethics mortgage brokers—some of the same people who preyed on
legislated. at-risk borrowers—are now seeking a home and a paycheck
in the reverse mortgage industry. It also follows that how
What has happened in the sub-prime lending sector and with whom we do business will determine how long we
is all the warning we need. No one took seriously enough do business.
the flashing “TILT” light that all but blinded us, unl it
short-circuited. The cost? More than $300 billion to banks An FBI study found that 80 percent of all reported
and other lenders … 1.8 million distressed or displaced mortgage fraud losses come at the hands of “industry
homeowners … 20 percent of the mortgage industry insiders”—people with the knowledge and wherewithal to
workforce without jobs … and a permanent stain to the fool the experts themselves. Not you? Not in your house?
industry. How can you be sure? Industry insiders turned the sub-
prime home mortgage industry on its head. It can happen
Could something similar happen to the reverse mortgage anywhere: In 1999 I witnessed the fih-largest bank failure
sector? It not only could happen, but it will happen if we in FDIC history, brought about by fraudulent mortgage
don’t do what it takes to protect and preserve our industry pracces of the bank’s chairman, CEO and CFO.
now. Each of us needs to ask ourselves—as if children were
listening and our answers were broadcast on the evening
»
THEREVERSE review
Simply agreeing in theory that ethics maer isn’t Perhaps the landscape has changed enough since then,
enough. It maers what ethics look like in pracce. Experts as to elicit some noise this me around. I encourage you
cite common prevenve measures as among the best to make a lot of noise throughout your companies and the
weapons against nefarious praconers and ill-goen gains: industry on behalf of ethics, and to make certain integrity
staying abreast of fraudulent pracces, educang employees, has a voice—the voice of a leader.
implemenng technological safeguards, and keeping the
door closed to “un” professionals. No less important, say About John LaRose: John LaRose has worked relessly for
those same experts, is having a company code of ethics. more than 20 years to promote the obligaon and need for
ethics in the mortgage industry. Recognized throughout the
Therein lies the opportunity for you to stand out as an reverse mortgage industry as a niche-markeng specialist,
industry leader—not because a trade associaon issues he is also frequently called upon for his advice and counsel.
a call for ethical standards … not because a commiee is To learn more about how Celink formalized its Code of Ethics,
charged with naming your ethics for you … not because visit www.celink.com and click on “Code of Ethics,” then
you’re compelled by compeve pressures to accede to “Read the history of our code of ethics,” A (true) tale of two
professional upgrades … and not because it’s the “in” thing cies.
to do. Such movaons are no different than saying you’re
commied to losing weight because the neighbors think it’s
a good idea. “Individually and collecvely, we must make
integrity as much an aracon for like-minded
How can you set yourself apart as an industry leader? clients and investors, as it is a repellent to those
By making ethics as visible throughout and beyond your
instuon as is your company logo. By being first in line to
who do not share similar values.”
formalize your code of ethics and mandate it as inviolate
corporate policy. By exacng high standards of insiders and
outsiders alike. And by sounding the clarion at the first threat
to the values your code represents. Why? Because the more,
the sooner, and the louder we make clear what the “right
thing” is, what we will tolerate and what we will not—as
an industry, as industry leaders, as professionals, and as
individuals—the beer and longer we can serve one another,
our investors, and our borrowers.
Formalizing a code of ethics and publicly comming to

the values it represents is a crical first step. Because saying
we’re ethical isn’t enough; we must be willing to put our
ethics front and center so everyone knows who we are and
how we do business. Each of us must live our code of ethics
day-in and day-out. And we must leave no doubt about how
much we value … values.
You neither need permission nor an act of Congress …

not a commiee or an associate’s (or associaon’s) approval.
You only need an ongoing commitment from within to
always do the right thing at the right me for the right
reason. Individually and collecvely, we must make integrity
as much an aracon for like-minded clients and investors,
as it is a repellent to those who do not share similar values.
Some years ago, I spoke on the topic of ethics at an

industry conference of sub-prime lenders. When I concluded,
I was met with silence.

Commentary by First American eAppraiseIT
REVERSE
MORTGAGES
A GROWTH OPPORTUNITY WORTH INVESTIGATING
Over the last 20 years, 345,000 reverse mortgages have been originated. Last year, originations hit a
new high: $20 billion. As the US population ages, the market has responded with new and innovative
products and services geared towards keeping seniors in their homes for longer periods of time.
National lenders in need of market diversification have migrated to reverse mortgages in an attempt to
make up for lost business in other markets.
Recently Michael Fosser, senior vice president of First American eAppraiseIT, offered his perspective on
this market and the opportunities and challenges that it presents to lenders.
Why are so many lenders including reverse mortgages in their product mix?
Today many market segments continue to be depressed and markets like sub prime and Alt-A are almost
nonexistent. Reverse mortgages tend to be more “need driven” and less tied to market conditions. In the
US today, more than 38 million eligible reverse mortgage customers own their homes outright. That’s $4
trillion in untapped equity. This offers a great opportunity for lenders to grow their portfolio of business in
a market that is less sensitive to fluctuations in the real estate market.
Are some appraisers more qualified than others to service this market?
Over 90% of today’s reverse mortgage originations are insured by FHA. Not every appraiser or appraisal
management company is qualified to complete these assignments. At eAppraiseIT we have a nationwide
network of more than 8,000 appraisers who are FHA certified – one of the largest panels of FHA appraisers
available in the industry today. To ensure a successful reverse mortgage offering, lenders need to work with
an appraisal management company that can provide national coverage and still maintain reasonable turn
times. In our case, that is five to seven days.
What challenges does a lender face servicing this market?

AARP recently conducted a survey of reverse mortgage customers and one of its findings was that their
properties frequently need repairs. This of course can complicate the underwriting process and salability
of a loan. To reduce lender concern, eAppraiseIT has created a new product specifically geared for the
reverse mortgage market called “Value View”. It helps lenders assess the condition and value of a property
while the loan is in the lender’s portfolio. This low cost inspection report includes a current photo of the
subject property, an automated valuation using two comprehensive AVM’s, and an inspection report that
answers questions regarding a property’s condition, marketability, and neighborhood. Value View is a great
peace of mind option for any lender interested in originating reverse mortgage loans.
Contact
Michael Fosser
800.281.6200
www.firstam.com
THEREVERSE review
Building the Reverse Mortgage Sales Strategy from the Ground Up

by Monte Rose
What are the crical requirements maker, and how do I connect and influence them?
of a successful RM sales strategy?
3. How do I differenate and elevate myself amidst the
The act of successfully “selling” cluer and noise of the current compeve landscape?
reverse mortgages is actually a How do I create a personal brand, establish a strong
minute segment of a comprehensive, presence, and create customer (and/or advisor)
carefully orchestrated process. engagement that propels my business with a strong
Taking the applicaon (or more to referral engine component. What skill sets (and learnings)
the point, funding a loan) represents are necessary to establish this?
the proverbial “p of the iceberg.”
4. What systems, tools, and learning strategies do I need
Beneath this event lies a series of interconnected events, the
to install in my sales pracce that will: (a) integrate the
results of which essenally determine the success (i.e., the
soluons to the above quesons, (2) will guarantee my
effecveness and efficiency) of the sales effort.
successful adaptaon to marketplace and environmental
A comprehensive sales strategy depends on the changes (e.g., shiing demographics and regulatory
successful integraon of two dimensions: insight and condions affecng product and distribuon strategies),
acon. A producer may or may not consciously arculate and (3) leverage my me and effort? How do I create
characteriscs of the respecve components (much less sustainable momentum and stamina?
the dynamic relaonships) of these two dimensions.
In simple terms, what mind set and strategy do I use to
Nevertheless, one’s sales “acvies” are based on key
“Get to the Kitchen Table,” how do I successfully present
assumpons on how the market operates, and how one
and close at the Kitchen Table, and what do I need to do
“executes” based on this insight.
aerwards to engage the client in order to create a strong
How does the idea of “integrang insight and acon” apply referral base?
in managing and growing the sales team?
The answers to these quesons necessitate a clear
A comprehensive sales strategy must be able to provide understanding of four basic areas (strengths, segmentaon,
clear and praccal answers to the following groups of skills, strategy) that affect sales producvity. This is shown in
quesons. Success hinges both on the quality of insight and the following illustraon:
the applicaon of these ideas in real me:
1. What do I do best? What are my strengths, i.e., beyond
the skills and knowledge (competencies which are
teachable), what are my talents (non-teachable), and
what are my areas of “non-strengths” that have to
be augmented or managed that create obstacles and
resistance points along my sales cycle? How do I leverage
my unique talent blueprint in an opmal way that is
profitable, compeve, and sustainable? Is my “porolio”
of sales acvies opmally calibrated to reflect my
“signature strengths?”
2. What is my niche? What are the segments (in the
customer and advisor markets) appropriate to my unique Some producers aain relave success by focusing on
customer value proposion? How do I locate the decision the acon dimension alone. Through the process of trial

and error, they manage to create a workable “strategy” What is the importance of a “system” that has a built-in
based on a few key tools and “taccs” used in their previous feedback loop?
sales jobs, or a judicious use of street sales savvy combined The objecve of a “system” is the ability to see cause-
with markeng common sense. Some producers are gied and-effect relaonships between acons, insight, and
with the stamina to “put in the miles” and through sheer results. It allows us to efficiently replicate (and reinforce) the
discipline and hard work are able to create a viable business. behaviors that yield the results we want. Sales is one big
Some originators have discovered a logical niche by default, “experiment.” One has to idenfy and measure the behaviors
either through their previous careers (and accompanying that contribute to the producer’s boom line, and how they
social network) or by efficient harvesng of high quality can be sustained, changed, or amplified. If the manager
leads supplied by their organizaon. knows how to coach at this level, movaon, stamina, and
producvity improves. The biggest leverage is the front-line
Sales skills development and applicaon, implemented in
manager’s coaching prowess. It’s one of the most important
“the same old way,” will yield “same old” results. In order to
variables in the success equaon.
improve one’s outcome, one has to personally improve one’s
insight (about one’s self and the market) and skilled acon, “Sales success depends on correct focus. Correct
preferably both, in a dynamic way. Business will improve only
if we personally improve our game. We can improve the way
focus depends in turn on successfully aligning
we think. We can improve the way we act. Or we can choose insight with the axis of skillful acon and strategy
to do both. If these two are carefully and systemacally implementaon.”
coordinated, it stands to reason that our chances of success
will improve exponenally. The praccal knowledge of the vercal dimension, i.e.,
the “strengths lens” interacng with the “market lens”
To get results we have not goen before, we need to:
is something that is virtually unknown in our industry. At
Change the way we think about acon, and change the way our consulng organizaon we have dissected and applied
we act about thinking. cung edge research in these two disparate areas. The end
view is to be able to shed light on how to link sales talent
How important is insight in achieving success in the field? with the appropriate market segmentaon knowledge.
Isn’t it enough to have the right effort and energy day in, The idea of niche strategy is not new. What is new is that
day out, to get in front of our prospects? we are at a stage when we can actually apply science to
Insight should influence the kind of skills one should the queson of “Who will succeed and where?” Most
focus on, and how they are to be applied. Conversely, the importantly, we can train the manager to consistently coach
effects of sales acons and implementaon strategies will the “how.”
necessarily affect our understanding of the market and how This is where I think the sales profession needs to
to connect with the customer more effecvely (assuming of direct its creave energies, if it expects to adapt to the
course, that we have ways of monitoring and tracking our changing compeve environment. The axis of insight
efforts). primarily dictates the quality of effecveness, or “doing the
Sales success depends on correct focus. Correct focus right things.” The axis of acon primarily relates to level of
depends in turn on successfully aligning insight with the efficiency, or “doing things right.” The more compeve the
axis of skillful acon and strategy implementaon. Finally, market becomes, the more one needs to personally have a
this “integraon” has to be sustained by a system (i.e., an method that systemacally manages these two polaries in a
infrastructure) that maximizes efficiency (such as a CRM tool, synergisc fashion.
me management methods, and performance dashboards Maslow once said, “to a hammer, everything looks like
that give useful feedback and informaon about the efficacy a nail.” Some companies react to tougher condions by
of sales methods used). It is not enough to say “sales are hammering harder, hammering more, or both. Others adapt
down,” but instead ask a series of “whys,” (the famous Five by buying more hammers. Unfortunately, the game has
Why Method pracced by Japanese efficiency experts) with changed. These taccs will no longer work.
the end view of hing the fundamental cause of less-than-
desired performance. Merging insight and acon (i.e., “aligning the crosshairs”)
allows effecve and efficient effort in the least amount
of me. To excel in this game, you must unite theory and
pracce.
»
THEREVERSE review
What is strengths-based learning, and how does that help

performance?
The foundaon of sales strategy is self-awareness and self-
knowledge. Research from the behavioral sciences and the
neurobiology of performance indicate that peak performance
is ed to the relaonship of how an individual’s unique talent
configuraon is applied to everyday tasks. The closer (and
more frequently) one applies one’s “signature strengths” to the
acvies of the sales cycle, the higher producvity becomes.
The corollary is that the greatest areas of li in sales producvity
is not to be found in constantly “improving” one’s weak areas,
but in leveraging one’s unique talents. The 80/20 rule of thumb
applies: the greatest li comes from capitalizing on one’s
strengths 80% of the me, while spending 20% of one’s me and
energy creang workarounds and compensaon strategies on
“weaknesses.” Unfortunately, many in the field sll believe that
“fixing weaknesses” is the most producve use of one’s me,
despite overwhelming research evidence to the contrary.
Two pragmac soluons are required for a strong foundaon
in this area: (a) proper assessment, and (b) skillful, strengths-
based producvity coaching. The field of talent assessment
has a long history, though in the last 10 years, researchers in
the field of Posive Psychology have created instruments with
robust psychometrics and praccal applicaon (i.e., idenfying
work-related “themes” strongly correlated with high successful
performance and achievement). Strengths-based coaching
ulizes a salesperson’s “talent map” as the starng point for
producvity enhancement. The key objecve is one of praccal
skill building based on what could be termed “meta-learning on
steroids” – i.e., learning about “learning to excel,” based on a
deep fluency of the strengths language and systemac efforts
to focus one’s talents on those acvies that yield the greatest
return. (One of the sales manager’s most important tasks as a
“strength-based” partner is to concurrently facilitate strategic
partnerships/structures to bolster the sales staff ’s areas of
challenge - i.e., the “boom drawer strengths”).
In my experience, skillful and in-depth strength-based
training and coaching is a key foundaon to a successful sales
strategy for two reasons:
(a) It creates a highly engaged sales staff, which translates
not only to personal sales producvity, but also yields a high
level of customer engagement in the long run. Human Sigma,
which is a concept/tool rapidly being adapted by cung
edge performance-oriented organizaons, in fact measures
the potency of the salesperson-engagement-to-customer-
engagement linkage as a key driver of business profitability.
The latest findings from neuroscience research is telling us that
employee engagement is achieved primarily through “managing

from strengths,” i.e., structuring a logiscal, psychological,

and social environment where both manager and sales
staff converge on strategies that incorporate the concepts
of strengths fluency and movaon. Successful sales teams
flourishing within posive organizaonal cultures have
always accomplished this. However it is only in the last 5-10
years that methodologies for tagging and replicang these
successful approaches have been published and taught as
part of the coaching lexicon.
(b) Behavioral change efforts are more effecve and
sustainable when they take into account the “wired-in”
talent profile of the salesperson. Strengths-based coaching,
mentoring and training energizes the individual, builds
performance stamina in a non-coercive way, enhances
efficiency, decreases turnover rates, and increases staff
retenon. In today’s highly compeve talent marketplace,
this is a key strategic advantage. Not only does this result
in high performance, it also creates an employment brand
that aracts highly talented people into the organizaon.
Thus one creates a fully self-propelled posive dynamic that
starts from effecve selecon, and comes full circle with
connued sales excellence and customer engagement as
effects.
Effecve strengths management is the underpinning of
effecve sales strategy. It is the key to focusing movaon.
It is the framework for developing the agility, sensivity, and
stamina required for succeeding in the mature market.
How important is it to understand market segmentaon in distribuon of seniors as a funcon of: (a) where they are
the mature market? in the aging process, and (b) the various biophysical and
psychosocial determinants of needs and wants.
There are two major subdivisions in this area: (a) direct
to consumer (“D2C”), and the business-to-business (“B2B”, Suffice it to say that there are certain consumer
or referral) market. The old “62 and a pulse” understanding segments we have discovered that: (1) respond to specific
of the mature market is not only obsolete, it’s also promoonal and posioning strategies, (2) have disnct
completely useless as far as formulang markeng strategy. media and channel preferences, and (3) have specific
Unfortunately, most players are sll quite in the dark about recepveness/resistance to the reverse mortgage offering.
the psychographics of aging. The effecveness of one’s path to the kitchen table, how
one manages the conversaon at the kitchen table, all
D2C. Tradional market segmentaon typically covers depends on one’s understanding of the various “mind-set”
geographic, demographic (e.g., income, ethnicity, etc.), classificaons of the respecve mature market segments.
psychographic (e.g., atudinal, values, and lifestyles)
dimensions of understanding consumer preferences and There are several gerontologically based market
buying behaviors. These kinds of segmentaon applicaons segmentaon approaches we ulize in training sales staff
are very prevalent in tangible consumer products, and in order to help them understand the senior client psyche
certain types of financial products such as credit cards. In our (the emoonal and cognive components of the “buying
industry, however, market intelligence has not yet reached decision”). The advantage of gerontological segmentaon is
a level where there has been a systemac invesgaon that it incorporates the biological, social, and psychological
of buying preferences within the senior populaon. Most dimensions of aging. It creates useful “mind maps” of
large organizaons segment based on geo-demographic how we can serve the senior populaon based on what
variables such as age and income, and fail systemacally they need and want. Perhaps most importantly, it yields
(quantavely/qualitavely) to assess the heterogeneous insight on how they are likely to process informaon
»
THEREVERSE review
in terms of form and content. It takes into account the What is the link between strengths-based performance
natural processes/dimensions of aging, alongside crical coaching and market segmentaon knowledge?
life events that necessitate adjustments and dislocaons in
Effecve strengths assessment and profiling gives a good
lifestyles and financial posion. Knowledge of mature market
indicaon of the segments one can be reasonably successful
segmentaon equips the salesperson with beer insight so
at. In addion, the talent profile will give good insight on
that he/she can ancipate where and how to connect with
what parcular skills are easy to learn and apply. The talent
the client. Understanding the client and quality of customer
profile will give a clue as to the appropriate markets (D2C vs.
service goes hand in hand.
B2B) that are a natural fit. There are certain ways to reach
In training our clients, we teach a gerontological specific segments (e.g., channel/media vs. seminars, vs.
segmentaon lens to focus on customer variaon. Age is networking for example) that are inherently easy for some,
not a final differenator of need and/or want. More oen and painstakingly difficult for others.
it is where one falls on the declining biological/psychosocial
The key is to coach individuals to their strengths in
“energy” scale that determines recepvity to financial
terms of Geng to the Kitchen Table skills. Certain strength
products and soluons. Effecve promoon and educaon
profiles naturally predispose individuals to
also requires the formulaon of specific
buyer personas (i.e., based on these
“Eff ec ve strengths parcular markeng methods, which means
previously idenfied market segments) to assessment and profiling that they will consistently be resistant
and/or blocked in some paths. Certain cases
understand the direct-to-consumer market gives a good indicaon of -- movaonal issues, call reluctance, and
dynamics. the segments one can be demoralizaon (all contributory to poor
B2B. Many successful originators successfully reasonably successful at.” performance) -- are caused by managers
build their business through the financial/ demanding producers to consistently use
legal professional advisor market. However, there are also their “boom drawer strengths” to grow the business.
other advisor influences besides these two. They include
For example, forcing individuals with very low “Woo”
community influencers, family members, and social work/
theme to constantly “fish” in cocktail networking events can
health providers. An enre strategy can be built on effecve
be a painful exercise. If this person had a high analycal and
networking and relaonship building with these populaons.
deliberave talent, he/she could have been more effecvely
Just as in the D2C segmentaons, B2B approaches need
coached to explore the B2B terrain, because the expression
to systemacally idenfy the “movaonal maps” of the
of analycal and deliberave sensibility is more valued in
various segments within this sector.
this market. In general, people who have more themes in
However, not everyone has the temperament or the cognive and impacng categories are generally more
capabilies to fully ulize this market portal. They require natural B2B players, compared to those with high relaonal
a different talent set, a different level of competencies and talents (e.g., Empathy, Connectedness), which tend to be
product knowledge, and, in many cases, a different level of more effecve in the D2C arena.
business approach to be successful. B2B markeng needs
Some producers are more flexible, and can dial down
to be tailored based on the unique talents and competency
or dial up their energy levels quite easily because of certain
profiles of the sales staff, in much the same way that D2C
clusters of strengths that allow such mobility. Others need
campaigns are orchestrated.
to sck to a certain kind of customer to be effecve. For
Understanding the key segments of this market in terms these kinds of producers, oscillang between different sales
of: (a) their primary senior targets, (b) their own posioning personas can be very draining.
and promoonal strategies, and (c) their understanding of
About Monte Rose: Monte Rose has helped hundreds of
equity conversion as soluons to their mature market clients,
seniors obtain a reverse mortgage during the past 17 years.
whether they are in the non-profit or financial advisory
He is an accomplished speaker and widely quoted industry
role, and their understanding of the various gerontological
expert, appearing in financial publicaons and naonally
market segments themselves, will affect how they are to be
syndicated media. He was head of naonal retail sales for
approached.
Financial Freedom Senior Funding Corporaon. Monte is a
Cerfied Senior Advisor and a Cerfied Strengths Coach with
Gallup University. For more informaon, call 800-516-0545
or email info@monterose.biz.

At Lender Lead Solutions we know
that one size doesn’t fit all.
Products for every client;
Wholesale for every lender
A traditional, government-insured Reverse Mortgage.
For clients who want the comfort of a fixed rate.
Lower closing costs and eligibility starting at age 60.
Clients can make the most of their higher-valued homes.
To contact Lender Lead Solutions

call 888.775.3631 or visit our website at
www.lenderleadsolutions.com
This is for mortgage professional use only, not for distribution to the general public.
THEREVERSE review
Are You Sending the Right Marketing Message?

As Elder Care Needs Increase, Families Search for Soluons
by Valerie VanBooven
As our populaon ages, elder care Although we see increases in male caregivers all the
needs increase, and therefore cash me, the fact remains, that when it comes to long-term care
flow needs increase. The three simply for our family members and our spouses, today women carry
go hand-in-hand-in-hand. According the weight.
to a recent joint Cornell and Purdue
University study, supported by the Daughters, daughters-in-law, wives, sisters and nieces
Naonal Instute on Aging; aging oen accept the role of caregiver for aging adults in the
mothers are nearly four mes more family. Across the U.S. there are women commonly referred
likely to expect a daughter to assume to as “the sandwich generaon” who are playing dual roles
the role of their caregiver rather than a in their families. They are oen mothers themselves, while
son if they become ill or disabled. caring for their own aging parents at the same me. The
level of stress and frustraon can be overwhelming. Careers
These mothers also are much more likely to choose are being put on hold, and promoons passed up, in order
a child to whom they feel emoonally close and who has to accommodate the busy schedules of their children, and
values similar to their own, report Karl Pillemer, Professor their parents. Even so, there is sll not enough me for these
of Human Development at Cornell, and Purdue sociologist women to meet everyone’s needs. A financial burden results
Jill Suitor, in the journal, “The Gerontologist”. (The as well.
Gerontologist 46:439-448 (2006) © 2006 The Gerontological
Society of America Making Choices: A Within-Family Study Women in America also tend to marry men who are
of Caregiver Selecon Karl Pillemer, PhD, and J. Jill Suitor, older than they are. Therefore, they oen end up caring for
PhD ) a chronically ill spouse in later years. When this happens, it
is somemes the case that all of the rerement funding and
The Markeng Message assets are used to pay for the long-term care needs of the
“ill” spouse, leaving nothing in savings to care for the “well”
The point with regard to Reverse Mortgages (and the spouse later in life.
markeng of your Reverse Mortgage services) is that in
order to send the right message, you have to understand It is esmated that one out of two women will need
your audience. We, as an industry, are not just speaking to long-term care at some point in their lives. One out of three
the 62+ homeowner. We are markeng to- and educang- men will also require long-term care. So why do more
thousands and thousands of adult children. Although it’s women need services? A woman’s life expectancy is sll
much more difficult (ok impossible) to purchase as list of longer than the average male.
“adult children of aging parents”, our atudes, our sales
pitch, and our overall message needs to convey credibility So there is your audience- seniors, adult children of
and trust. aging parents, and women.
Your Audience
Long-term care is a family issue, but it is more oen a

“It is esmated that one out of two women will
woman’s issue. Throughout history women have been the need long-term care at some point in their lives.
caregivers in our lives. As we have seen, women also live One out of three men will also require long-term
longer than men on average. From beginning to end, women care...As we have seen, women also live longer
oen care for family members young and old. Now as our
populaon begins to age, it is even more important that we than men on average.”
understand what lies before us.

Generang Success
Do you have the right markeng message? Is your

message conveyed using the right media? Do you even have
a markeng plan?
The most successful Reverse Mortgage originators

understand full well that family involvement is a big deal, [Reverse Mortgage Direct Mail Specialist]
an important consideraon, and not something they try to
avoid. As elder care needs increase, families are looking for
soluons. You may have that soluon. If your community
90% of our Customers Reorder...
trusts you and believes that you are a credible professional,
the business will fall into your lap with very lile effort.
Establishing that level of credibility and trust takes me. Start
a new markeng plan KNOWING who your true audience is, Not a customer?? #ALLTODISCUSSOURMARKETING
and move forward from there. PROGRAMSHOWWECANINCREASEYOURMONTHLYVOLUMEAND
IMPROVEYOUR2/)(AVEAMAILPROGRAMALREADY,ETUSSAVE
About Valerie VanBooven: Valerie VanBooven RN BSN is the YOUTIMEANDMONEY7EHAVESOLUTIONSTOYOUR2EVERSE
-ORTGAGE-ARKETINGNEEDS
Naonal Markeng Director for Next Generaon Financial
Services, a Division of 1st Mariner Bank. She is a professional ;-ENTIONTHISADFORFREEMAILERSWITHYOURlRSTORDER=
speaker and the author of the books “Aging Answers” (2003)
and “The Senior Soluon” (2007). Her websites are www.
ngfs.net and www.seniorserviceselling.com . Valerie can be
reached at valerie@nextgenfinser.com Reverse Mortgage Direct Mail Specialist
6722 Vista del Mar, Suite A, San Diego, CA 92037
TOLLFREE sEFAX sEMAILTRAAM AOLCOM
www.smart - - marketing.com
...exclusive, targeted, motivated

THEREVERSE review
Wall Street Prefers LIBOR HECM’s

Will they be kind to your clients?
by Jerry Wagner
Since the incepon of the Home

Equity Conversion Mortgage (HECM) Table 1
program in 1989, the tradional loan LIBOR HECM CMT HECM
was based on Constant Maturity Short-term Index 2.874% 1.67%
Treasury (CMT) rates as published every Investor Margin 1.222% 1.75%
Monday by the FED. The Note Rate was
based on the one-year CMT rate plus Inial Note Rate 4.096% 3.42%
an investor margin. The Expected Rate
is used for finding how much money is 10-Year Index 4.340% 3.67%
available and in calculang Service Fee Set-Asides (SFSA) and Investor Margin 1.222% 1.75%
payment plans. The Expected Rate was based on the ten-
Expected Rate 5.562% 5.42%
year CMT rate plus the same investor margin.
LTV Lookup 5.500% 5.500%
In October of 2007, HUD authorized HECM’s based on LTV Factor 0.715 0.715
the London Interbank Offered Rate (LIBOR). The Note Rate Max Claim Amount 362,790 362,790
is based on one-month LIBOR as published every Monday
Principal Limit 259,395 259,395
in the Wall Street Journal, plus an investor margin. The
Expected Rate is based on the ten-year LIBOR Swap Rate, as Loan Fee -7,256 -7,256
published every Monday by the FED, plus the same investor Upfront MIP -7,256 -7,256
margin. For background, see our first arcle in this series at 3rd-Party Costs -2,211 -2,211
The Reverse Review Website. Available Aer Costs 242,672 242,672
What’s the Difference? SFSA -5,603 -5,682
Available Benefits 237,070 236,990
Table 1 compares the LIBOR and CMT HECM as shown on a
What might we expect?
seller/servicers website for the week of April 22. Note that
this company is playing the LTV lookup game – Expected We are in strange mes – rates are low and the spread
Rates are rounded to the nearest eighth for LTV lookups between short-term LIBOR and CMT rates is high. Historically
subject to a 5.50% lookup floor. The LIBOR margin here is the the one-month LIBOR has been only 0.13% higher than the
highest that will sll allow the Expected Rate to round down one-year CMT rate. If this spread comes back in the future,
to 5.50% (nice folks!). the borrower will be much beer off in the LIBOR HECM. The
chart below shows the history of the two Note Rate indexes.
The LIBOR HECM gives an extra $80 in available benefits
because its higher Expected Rate gives a lower SFSA. But its
inial Note Rate is 0.676% higher. If this spread holds, this
73-year old borrower will owe an extra $26,454 in ten years
– all for an extra $80 up front!
“Wall Street has temporarily backed off from

invesng in reverse mortgages. Luckily for the
reverse mortgage industry, Fannie Mae, the
tradional investor, is sll buying in a big way.”

But the historical average spread in the Expected Rate If you believe that historical yield spreads will reassert
indexes has been 0.58% (LIBOR higher than CMT). This themselves in the next few years, your client will be beer
means that in the future, when rates go up a bit and the off in a LIBOR HECM if their inial benefits are equivalent to
annoying 5.50% HUD lookup floor has no effect, LIBOR those from a CMT HECM. The LIBOR HECM will need a 0.50%
HECM’s must have a margin that averages 0.58% less than or so lower margin to match the benefits of a CMT HECM,
the margin on CMT HECM’s in order to give similar benefits. and if the future Short Spread is less than 0.50% (history is
The chart below shows the history of the two Expected Rate 0.13%), the LIBOR HECM will have materially lower future
ten-year indexes. You can see how consistent the spread is loan balances.
between the LIBOR Swap Rate and the ten-year CMT.
“We are in strange mes - rates are low and
the spread between short-term LIBOR and CMT
rates is high.”
Hopefully the “American Condion” will be a short-lived
phenomenon.
About Jerry Wagner: Jerry Wagner is President and Ashok

Shinde is CTO of Ibis soware based in San Francisco. Ibis
has been the Standard of the reverse mortgage industry
since 1995. Wagner graduated from Harvard Business
School and has a Ph.D. in Economics from Harvard. But
What products should you offer? he’s sll a fun guy and can be reached at 800-566-5077 or
wagner@ourtoolbox.com. To learn about Ibis soware, see
Wall Street has temporarily backed off from invesng in www.reversemortgagehomepage.com)
reverse mortgages. Luckily for the reverse mortgage industry,
Fannie Mae, the tradional investor, is sll buying in a big
way. But we believe that Fannie prefers CMT HECM’s. When
Wall Street rehires their trading desks, LIBOR HECM could
well move to the forefront.
It all depends on the spreads between the ten-year

indexes and your percepon of the future spread between
the two Note Rate indexes (“Short Spread”). We can
prey well predict that the ten-year spread will average
0.58% -- the wild card is the spread on the two Note Rate
indexes. In the chart below you can see the material effect
the sub-prime and rate spread melt-down has had on the Like what you have read?
Short Spread. The Long Spread has stayed fairly consistent Share your thoughts with the editor!
averaging 0.58%. The Short Spread has gone haywire!
email us at editors@reversereview.com

The Blueprint for Making Your
Company “Brand New”
According to a recent survey by Reverse Market
by Stephen Kinney Insight, there are 1667 acve reverse mortgage
lenders in the USA today. Fiy-five percent, or 926
of those lenders, are new to the business. Currently,
these new lenders account for about 16% of first-
quarter 2008 producon. With so many new lenders
entering the business, differenang yourself and
your company from others in the industry is going to
become more challenging and more important.
One of the best ways to do this is to establish a strong gather the informaon you need and assign tasks to the
brand, one that sets you apart from the compeon and members of the team or seek out other resources.
creates a percepon in the marketplace that you are
different, beer, and someone a consumer should consider Take the me and do the research to understand your
doing business with. target audience’s age, gender, income, educaon level,
locaon and emoonal state. What movates them to
Branding is important and can have tremendous value acon? What turns them off? What gets their aenon?
to an individual or company. Look at Donald Trump; his What are their hot buons? What do they love, hate, fear?
branding has become a business unto itself. Lending his Use a spreadsheet to set up customer profiles and create a
name to mortgage companies, board games, even neckes, plan to target them.
creates revenues for “The Donald”. With each new venture,
he further establishes the value of his brand. Finally, evaluate the results and ask how your conclusions
fit your goals and what value your new brand can bring to
For reverse mortgage sellers a strong brand name helping you reach those goals.
and promise can create confidence, familiarity and, most
importantly, reduce the percepon of risk in the public’s eye. Quesoning
Done well, a strong brand may even allow you to command
a premium price while making it difficult for competors to Creang a brand is more than just designing a logo,
gain a foothold in your marketplace. creang a slogan, or deciding on some colors. You want your
brand to create a posive mental imprint in the public’s
“Take the me and do the research to understand mind, an imprint that is reflected in everything you do.
your target audience’s age, gender, income,
Like most successful markeng efforts, building a brand
educaon level, locaon and emoonal state.” starts with asking a lot of quesons.
Creang a brand identy is a collaborave, me-
The first of these quesons revolve around the 4 P’s,
consuming process. You want to start with a creave team,
purpose, personality, promise and percepon of difference.
one that represents everyone in your organizaon who will
be affected by the branding plan you create. If you can afford Let’s look at these and lile more detail.
it, you may want to seek out some professional help as well.
What Is the Purpose of My Brand?
The branding process can be broken down into a What do you want your brand to do for you? What idea,
four part process Listening, Quesoning, Creang, and emoon, thought, and result do you hope to accomplish
Delivering. Let’s take a look at each of these. when someone sees your name, logo or byline? Your brand
purpose should be clear, concise, praccal and measurable.
Listening
What Personality Do I Want My Brand to Convey?
Begin by assessing your premise and the desired You want your brand to be reflecve of your company’s
conclusion of the branding process. Invesgate your personality, or at least the personality you want to convey.
current brand and the assets and image it brings to What is the emoonal response you want customers to
your organizaon. Start by listening to your employees, have when they come in contact with you or your company?
customers, and competors. Assemble focus groups of When you think of Donald Trump, chances are you think
employees and customers. Learn from your team and your of money and boldness. Geico uses humor to portray
clients the percepons (brand image) that your brand has a personality of a company easy to deal with. Financial
in the marketplace, the posion it has established, and the Freedom and Lender Lead Soluons use James Garner and
promises it has made, kept, and broken. Brainstorm and Robert Wagner and create a customer friendly personality
strategize with your team on how to move your brand to the for their companies. What personality do you want your
market presence you want to establish. brand to convey?
Outline the core concerns of your target audience and What Is My Brand Promise?
how to posion or reposion the brand to develop new Your brand promise is the idea that you want the
clients. Ask how you can differenate yourself from your marketplace to take away with them when they see or
competors. Start from scratch or use your current brand hear your brand. A well executed brand promise can have a
presence as a starng point. Determine the best way to dramac impact on your business.
»
THEREVERSE review
A brand promise should…. Creang

• maer to customers Create concepts for developing a brand identy and
• be unique or differenate you or your company brand message. Review what you learned in the quesoning
• be believable process and work collaboravely with your team to capture
• be aainable a brand promise and presence that it is consistent, clear, and
can be promoted by the whole company.
The brand promise helps you posion yourself in the
minds of your prospecve customers and helps you create a Develop the brand message, which should include
posive reputaon in the marketplace. collaboraon sessions with your team and customers if
possible. Plan at least two rounds of revisions to the talking
What Is the Percepon I Want My Brand to Convey to the
points, tagline, and sales pitch. You may want to update your
Public?
exisng logo and slogan to align with your new image.
Percepon of difference is one of the most important
things a brand can do for you. This difference can be real Choose a Brand Name
or perceived. Early in my career I had to be dragged kicking
and screaming to the understanding that “percepon is While your name is certainly not everything, it is an
reality.” Your Percepon is oen related to how the public important piece to building a lasng brand.
perceives how you deliver on your brand promise. You may
want to create the percepon you are the most experienced, Great brand names:
or the fastest. While all or none of this may be true, if your • Are emoonal
branding creates that percepon in the public’s mind it will • Are memorable
have succeeded. Of course delivering on the brand promise • Have personality
(at least most of the me) is the best way to insure that you • Tell a story and communicate
will maintain the proper percepon of difference over me. Should a name be literal and descripve, or obscure and
emoonal? Both can have impact. Obscure and emoonal
Tradition Title Agency

Serving New York State with
Knowledge, Experience and Trust
We Help You Grow Your Business

Providing Reverse Mortgage Services for Over 12 Years
CALL OUR TEAM FOR MORE INFORMATION AT (631)328-4410

WWW.TRADITIONTA.COM
AN APPROVED VENDOR WITH THE LEADING REVERSE MORTGAGE LENDERS

can lead to very disncve brands, but literal and descripve Create a Logo
can speed up the process of communicang your message
to your audience. When you have come up with a name or The right logo makes a great first impression. A logo
slogan, research it. Can you secure a domain name that is is the visual image of your company that will be used in a
consistent with your brand name? Also, check the internet variety of applicaons. When you are considering a design,
and the trademark office to see if anyone else is using it. start with simple. Many of the most effecve logos are
one or two colors. For a start-up, this can save you a lot on
“Percepon of difference is one of the most prinng and markeng expenses.
important things a brand can do for you.”
It is important to test how your logo photo copies and
Try to be original. Generic names like Senior Mortgage, works in a digital environment, fax, website, leerhead, etc.
Reverse Mortgage Lending, or Senior Lending may just make Sample other venues that you may grow into, like posters,
you spend more and work harder at building a brand. They print adversing, or promoonal items. Can it work as well
will likely be the same or to similar to other companies in the on a small or large scale?
marketplace, and will make it harder to differenate your
Whether your logo is full-color or one color, make sure
company from these competors. As names get harder to
you leave customers with the best possible impression
come by, many modern companies create names that are
through the use of high quality business cards, leerhead
a combinaon of words (i.e. Verizon, Costco etc.) to insure
and envelopes. The good news is that in this age of computer
they are unique.
graphics and low cost printers, it shouldn’t cost a fortune.
Being descripve - as opposed to being generic – can be a
good thing for names. Given a limited budget, it can actually Delivering
be a great way to go. Try to be original so that your name
Brand markeng is communicaon that differenates you
stands out, so that it means something, so you can own it,
from competors and increases awareness of your brand
and so it will be much harder to copy.
promise.
Avoid names that are hard to spell or pronounce. Ask
Brand markeng sets the stage for adversing, direct
yourself, how will the market receive the name? Will the
markeng and other communicaon by posioning
market get it? Will it jive with your strategic posioning of
your product in the minds of potenal customers. Direct
the brand? Are there negave connotaons or associaons
markeng or product markeng then hones in on customers
with the name?
and gives them an opportunity to buy with confidence,
Perfect brand names are hard to come by and there’s as they are aware of the brand promise your branding
no fool-proof method for tesng names, so don’t get too campaign has imparted to them.
bogged down. Under pressure to come up with a descripve
Integrated Markeng Communicaons (IMC) is the
name for my company, one that I could get a reasonable
process that aligns communicaons to build posive and
domain name for, I gave up and decided to use my own
lasng relaonships with customers and others. It is a
name. It’s easy enough to pronounce, but the spelling is
customer-centric approach to markeng and branding that
unusual. However, if you Google Stephen Kinney you will see
stresses communicang to consumers in order to speak
that I am first or second on the list. Come up with a few ideas
with one voice through mulple forms of media. In other
and then test a lile, talk to your colleagues, customers,
words, it’s how you present your company or adversing
friends and family, listen to people you respect, trust your
and prevent it from having mulple, conflicng messages. A
gut feelings, and make a choice.
good IMC plan balances a company’s responsibility to create
While the brand name is important, few brand names awareness with its need to generate results.
can stand on their own. Great brands become part of the
Make a List of all Your Touch Points
public consciousness as a symbol of your story, differenate
your company in your marketplace, and trigger a memory, Every me you touch a customer or prospect, you should
emoon, or posive percepon. The brand name and how see your brand coming through. This should include your
your branding campaign is executed are essenal to building workplace, promoonal acvies, correspondence, and
brand awareness. even how your phone is answered. Remember a brand is the
summaon of your company’s promise; infuse your brand
»
THEREVERSE review
in as many contact areas as you can. Be sure to include each

of these touch points in your IMC plan so that your branding
speaks with one voice.
Create a Demand for your Brand
Your product’s performance, your customer service,

follow-through, and the quality of your adversing,
markeng, and communicaon add up to the brand
experience. Posive experiences create new and repeat Finally, a robust, interactive
business. Your branding can make the consumer’s choice online resource exclusively
easier and more comfortable. Customers will know you, seek
you out, refer you to friends, and remain loyal. The power
for Reverse Mortgage Loan
of a well executed brand can make your fortune! A poorly Officers!
executed plan will yield no benefits and may actually hurt
business (remember “New Coke”).
Monitor your Results

Join NARMLO and dramatically impact
Evaluate how your new brand is working. Convene your reverse mortgage business.
anonymous surveys and focus groups to evaluate your
percepon in the market place. Are you geng more
calls? Are your markeng efforts becoming more effecve? Get resources and information geared
Is your business increasing? Are you delivering on your towards reverse mortgage Loan Officers
brand promise at all levels of your organizaon? How has
the public’s recognion and percepon of your company
changed.
NARMLO Reverse Mortgage Today
Monthly Teleseminars and Webinars
Conclusion NARMLO Blog
Discussion Forum
Whether you are seeking to reestablish or repurpose
your exisng brand, or start a new one, creang and building Marketing Tools
a brand is a collaborave, me-consuming, and ongoing Lender/Lead/Service Resources
process. It requires research, creavity, dedicaon and Educational Materials for your seniors
salesmanship. It requires a branding plan that permeates
the culture of your company and is reflected at every touch
point you have with your customer. The right branding can
NARMLO.org is the place to find answers to
permanently change the fortunes of your company, reduce all of your questions
customer acquision costs, and allow you to successfully
compete without consistently being the low cost provider. NARMLO.org offers an interactive
discussion forum where you can exchange
About Stephen Kinney: Stephen Kinney is a ideas and express constructive opinions with
26 year veteran of the mortgage industry reverse mortgage Loan Officers throughout
and CEO of Stephen Kinney Associates, the world
Inc., a company that specializes in the
providing training and consulng services
to company’s seeking to excel in the Reverse
Mortgage Industry. Stephen can be reached
on the web at www.stephenkinney.com or
by calling 973-842-0081. www.narmlo.org

Reverse Market Outlook

by John Lunde
In a world full of investors, you have undoubtedly heard Risks

the disclaimer, “past performance is no guarantee of future
results”. Of course, you probably also noced this typically 1) Home Value Declines
follows a large chart and table trumpeng past performance In many ways, the proprietary products which have been
stascs. You may wonder why the seeming contradicon, introduced in our industry to date have filled the ‘jumbo’
but I’ll venture a guess that in looking at an uncertain and product niche above the federal lending limits. With a
unknowable future, the past is oen our best foundaon for substanally lower LTV curve in place in most proprietary
guiding future expectaons. products than HECM, borrowers typically don’t see
addional cash unl home values are 150-200% or more of
In that vein, I’d like to ask a simple queson about our the lending limits.
industry. What can past performance tell us about the Exisng Loan Limits
future of our industry? In parcular, I’d like to focus your
Percent of HECM Unit Volume
aenon on two important topics that will play a major
role in shaping the near term success of originators and by Naonal 2005 2006 2007 2008 YTD
extension, the growing group of supporng vendors. Value <= Lending Limit 58% 61% 71% 75%
We’ve all heard about how the number of companies Value <= 120% Lending Limit 75% 78% 86% 88%
selling reverse mortgages has expanded rapidly in recent
years. Even if you haven’t seen the figures, you’ve Value <= 150% Lending Limit 88% 90% 95% 96%
undoubtedly felt it first hand in increased compeon for
customers. So let me put some numbers around this for you:
California
Value <= Lending Limit 28% 31% 39% 43%
Value <= 120% Lending Limit 51% 54% 62% 68%
There is evidence from the table that declining home

values against mostly stable lending limits has incrementally
contributed to a shi in volume toward HECM, although
The graph above tells the tale of our market, illustrang the much clearer factor behind this has been an illiquid
how unit volume growth has outpaced acve lender secondary market. Even in the higher value market of
growth in some years and vice-versa in others. Last year California, the trend has been significant and sustained as
the growth in the number of lenders was 40% higher than home values fall from the peaks seen in 2005/06.
volume growth, the highest gap in recent years, triggering a The larger implicaon of this shi is more striking – that
perceived shrinking of the opportunity among lenders and HECM is taking up a larger share of the potenal transacon
leading to declines in markeng and sales conversion rates. volume of exisng ‘jumbo’ focused proprietary products,
The challenges have clearly grown for originators, so what even if the secondary market were operang at full capacity.
opportunies and risks exist today? For the foreseeable future, HECM will connue to dominate
the industry unless and unl a convenonal conforming
product is created to compete against HECM at the lower
home value segments.
»
THEREVERSE review
2) Ancipated Higher Loan Limits Opportunies

Everyone is hoping for higher loan limits on the HECM,
but what would the actual impact of such a change be? The Where there is risk, there is also opportunity, and two of
tables below show the impact on the previous table for both the most immediate opportunies you’re likely to find today
$417,000 and $550,000 naonal loan limits. revolve around the two risks highlighted above. Increased
lending limits will almost certainly lead to a mini boom
Single Naonal $417K Loan Limit of refinance business for those ready to take advantage.
Percent of HECM Unit Volume Whether you focus on retaining your previous customers or
Naonal 2005 2006 2007 2008 YTD farming other lenders’ porolios, this opportunity isn’t likely
Value <= Lending Limit 85% 81% 87% 90% to knock twice. The HECM expected rate floor, limited home
price appreciaon and other factors are combining to ensure
that future refinance opportunies are significantly more
modest than the present wave.
Second, as borrowers with home values previously above
California
the lending limits are able to access more cash, a significant
Value <= Lending Limit 63% 54% 59% 64% number of transacons will have the numbers work where
Value <= 120% Lending Limit 79% 72% 78% 81% they previously were too lile to payoff exisng obligaons
Value <= 150% Lending Limit 91% 72% 92% 94% and/or meet the liquidity needs of the borrower. Reviewing
old leads and re-running the numbers for each using the new
Single Naonal $550K Loan Limit loan limits and current interest rates is a prime way to garner
new business while keeping costs associated with lead
Percent of HECM Unit Volume
generaon down.
Naonal 2005 2006 2007 2008 YTD
Value <= Lending Limit 94% 92% 96% 97% Lastly, product innovaon remains a large opportunity
although likely not an immediate opportunity for most
market parcipants. Whether through a HECM competor,
Value <= 150% Lending Limit 99% 99% 99% 100% bundling, or re-invigorated jumbo pricing, the connued
lack of penetraon in the vast senior marketplace remains a
California crucial indicator of product gaps in our industry. The outsize
Value <= Lending Limit 85% 80% 86% 88% profitability of the early jumbo products points the way
toward large rewards for successful innovators, although the
risks and costs of failure can be daunng.
In closing, as each of us confront these risks and
These tables make it crystal clear that increased loan opportunies every day, it’s crucial that we also keep in
limits will have a larger impact on HECM market share mind the overall perspecve of the industry beyond the
than any home price decline and potenally more than the immediate landscape. Each day our growing industry is
current secondary market issues. While it is not clear when helping more and more customers fulfill their financial and
legislaon may pass or what the final form of loan limits lifestyle objecves. This history of performance should be
and originaon fee changes might be, originators should intensely sasfying to all of us, no maer what our future
expect and prepare for connued HECM dominance in this holds. If there’s one thing that’s certain, it’s that everything
landscape. changes and today’s compeve challenges will give way to
tomorrow’s rewards for successful innovators.
Where in the past we’ve seen proprietary products
make up the lion’s share of profits at many companies, About John Lunde: John Lunde is President and founder
the combinaon of factors liming the proprietary jumbo of Reverse Market Insight, the premier source for market
opportunity is a major factor affecng business planning intelligence and analycs services in the reverse mortgage
around the industry. In a capped HECM originaon industry. RMI clients include mulple top ten reverse
fee world, the industry runs a significant risk in losing mortgage lenders and servicers, as well as some of the
profitability on a macro level without a realisc proprietary largest financial services firms in the world. Find out more at
product outlet. www.rminsight.net or call 949-429-0452.

Understanding Reverse Mortgage Loan Servicing Concepts

by David J. Cesario
One of the longest relaonships interest. The lender will typically pay a fixed fee to the
that exists between a borrower and servicer for their services. This monthly revenue stream
lender is the relaonship established does not exist for reverse mortgage loans as no incoming
through the servicing acvies of their monthly payment is required. The queson then arises how
mortgage loan. Since the reverse to collect for (or pay) the servicing expenses incurred?
mortgage loan has a variety of unique
features, the servicing aspects are The soluon was to charge the borrowers a monthly
somewhat different with respect to servicing fee as part of the ongoing expense of a reverse
how the loan is managed aer closing. mortgage loan. This monthly servicing fee is typically added
But something else that makes servicing of reverse mortgage to the outstanding loan balance each month that the loan
loans different is the effect servicing has on the qualificaon connues in force.
ability of the borrower. Therefore, it is very important to
understand, and differenate servicing aspects of reverse According to HUD guidelines, lenders are not required to
mortgage loans compared to servicing of forward mortgage charge servicing fees on a reverse mortgage loan. Instead,
loans. HUD recognizes that a lender may charge a higher interest
rate, or build the cost of servicing into the rate, instead of
Since most new reverse mortgage borrowers will have charging a monthly servicing fee. This typically would be
had experienced servicing of forward mortgages, it is disadvantageous to borrowers who then would be incurring
important to be able to explain the different funcons and higher interest rates over the life of the loan. Therefore,
expense components to your reverse mortgage borrowers. most FHA reverse mortgage lenders have chosen to charge
Servicing expense is not necessarily a concept discussed a monthly servicing fee. This has the effect of lowering the
with most forward mortgage borrowers, but it is absolutely a overall borrower expense while sll providing servicers with
concept dealt with for reverse mortgage borrowers. a source of revenue to pay for their services.
As with any mortgage loan, there is an expense incurred According to HUD Handbook 4235.1, Rev. 1, Secon 1-12,
by the lender for the servicing of that mortgage loan; and reverse mortgage servicing has the following features:
a reverse mortgage is no excepon to this rule. Reverse SERVICING. The lender is permied to charge the
mortgage servicing has many similar funcons as forward borrower a servicing fee if this cost has not already been
mortgage servicing including monthly statements mailed priced into the borrower’s mortgage interest rate.
to borrowers, the maintenance of a customer service call
center, and handling payoff requests. But unlike forward A. If the lender chooses to assess a servicing fee, the
mortgage servicing, reverse mortgage servicers may be fee is established at closing as a monthly figure and the
making outgoing monthly disbursements (payouts) to amount necessary to pay this fee throughout the life of
borrowers instead of collecng incoming payments. They the loan is calculated and set aside from the principal
may also be dealing with borrower requested changes to limit at closing (see Paragraph 5-7B. for calculaons).
the payout methodology selected, which can be changed as
B. The servicing fee that may be charged on fixed rate or
many mes as the borrower desires, aer the loan is funded.
annually adjustable loans may not exceed thirty dollars
($30.00) per month. The servicing fee that may be
The biggest difference in the servicing of a reverse
charged on monthly adjustable loans is uncapped.
mortgage loan versus that of a forward mortgage is how
the cost or expense for servicing acvies is paid for. In C. The lender adds this fee to the borrower’s outstanding
a forward mortgage, servicing expense is collected (or balance monthly, and cannot assess any other fees to
paid) from the incoming monthly payment of principal and cover the costs of servicing.
»
THEREVERSE review
So there appear to be straighorward guidelines on how

servicing expense can be recaptured by the lender, with
certain program limitaons to protect the borrowers.
Something that is unique to reverse mortgage loans is

the concept referenced in subsecon A of Secon 1-12; the
concept of a servicing set aside. The reference to secon 5-7B
of the Handbook describes where the descripon, calculaon
and methodology for the set aside can be found.
It is important to note that there are specific limits in

place on fixed rate HECM’s and annually adjusng HECM’s,
while there is no limitaon on the monthly adjusng HECM’s. 5)&*/%6453:45"/%"3%4*/$&
Market forces currently have the monthly adjusng HECM’s
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servicing fees is ranging up to $35.00 per month. Since the
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level of the fee established at the lenders discreon, you
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may want to make sure that your wholesale lenders offer you
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mulple levels of servicing fees to offer your borrowers.
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Fannie Mae HomeKeeper loans and most Proprietary and
Jumbo reverse mortgage loans also have monthly servicing *ěĢĬ3.0
expense. The monthly servicing fee limit on the HomeKeeper -PBOPSJHJOBUJPONPEVMFTJODMVEF$3.
is a maximum of $30.00 per month and Proprietary and 2VJDL2VPUF 1SPQPTBM "QQMJDBUJPO
Jumbo products individually determine what monthly 6OEFSXSJUJOH %PDVNFOUT $MPTJOH 1JQFMJOF
servicing expense is to be charged. 3FQPSUT BOE$PTU5FNQMBUFT1MVT#SPLFS
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set aside calculaon, influences the amount of available CFTUPSFE QSJOUFE BOEFNBJMFE
funds a borrower will be able to access along with amount of
revenues available to the lender. Having the flexibility to find *ěĢĬ2ĮĢĜĤ2ĮĨĭĞ
the right combinaon should be one of your primary concerns #JMJOHVBMDPOTVNFSDBMDVMBUPST
for both the borrower and your company. BMSFBEZJOVTFBU
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During the next part of this two part series, we will discuss rXXXXFMMTSNDPNr
how the servicing set aside is calculated, we will debunk BOENBOZPUIFSXFCTJUFT
erroneous explanaons of what the set aside truly is and we
will cover how to explain the set aside to reverse mortgage *CJTBMTPQSPWJEFT
borrowers.
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About David J. Cesario: David J. Cesario is a naonal speaker "DPNQMFUFDPVOTFMJOHQBDLBHFGPS
and educator on Reverse Mortgage Lending. He serves as the )6%"QQSPWFESFWFSTFDPVOTFMPST
Execuve Vice President of 1st Reverse Financial Services, LLC, 'PSNPSFJOGPSNBUJPO WJTJU
a naonal wholesale reverse mortgage lender, located at 410
Quail Ridge Drive in Westmont, Illinois, 60559. The company’s XXX3FWFSTF.PSUHBHF)PNF1BHFDPN
website is www.1stReverse.com where informaon can be
found about 1st Reverse’s wholesale lending programs and 0SDBMM

opons for lenders interested in offering reverse mortgage
loans.

Directory “Forward Thinking in Reverse”
Jerry Wagner OnTheLevel

David Cesario Ibis Capital, LLC 2982 Ora Avo Terrace
1st Reverse Financial Services, LLC 2101 Pacific Avenue Vista, CA 92084
410 Quail Ridge Drive PH 701 (800) 909 - 1110
Westmont, Illinois 60559 San Francisco, CA 94115 onthelevel@mac.com
(877) 574 - 1000 (800) 566 - 5077
info@1streverse.com reversemortgagehomepage.com
info@ibisrmo.com
Reverse Market Insight, Inc.

Lender Lead Soluons Aliso Viejo, CA
America’s Recommended Mailers, Inc. 3 Hunngton Quadrangle (949) 429 - 0452
1680 S. Hwy 121, Bldg. B Suite 303N rminsight.net
Lewisville, TX 75067 Melville, NY 11747 info@rminsight.net
(800) 992 - 2722 (800) 562 - 6755
armleads.com lenderleadsoluons.com
Lisa Schreiber
10801 Thornmint Rd Reverse Mortgage Soluons, Inc.

Suite 250 LSK Consultants, LLC 2727 Spring Creek Drive
San Diego, CA 92127 39821 Foxglove Court Spring, TX 77373
(877) 229 - 7799 Lovesville, VA 20180 (888) 918-1110
appraiserlo.com (540) 822-9710 rmsnav.com
informaon@appraiserlo.com lskconsultants.com
lisa@lskconsultants.com
Monte Rose
Smart Markeng
6722 Vista del Mar
Suite A
17100 Gillee Ave San Diego, CA 92037
John LaRose Irvine, CA 92614 (888) 811 0208
Celink (800) 516 - 0545 smart--markeng.com
Reverse Mortgage Servicer monterose.biz traam@aol.com
3900 Capital City Blvd info@monterose.biz
Lansing, MI 48906 Naonal Associaon of Reverse Mortgage
www.celink.com
john@celink.com
Tradion Title Agency
Loan Officers 1991 Union Boulevard
22 Polly Drummond Hill Rd. Suite C
Newark, DE 19711 Bay Shore, NY 11706
(877) 2NARMLO (877) 262 - 7656 (631) 328-4410
FirstAmerican/eAppraiseIT narmlo.org tradionta.com
5 Cherry Hill Dr Valerie VanBooven info@tradionta.com
Suite 200
Danvers, MA 01923
eappraiseit.com
(800) 281-6200 Next Generaon Financial Services
Reverse Mortgage Naon
3301 Boston Street
Balmore, MD 21224
(888) 973 - 8377
ngfs.net

The Last
THEREVERSE Word
review
Looking at the Reverse World from a “Forward” Thinker

by Lisa Schreiber
I’ve been in the “forward” mortgage family (many cooks in the kitchen) and like our forward world, is
industry for over 22 years. From my start in highly regulated and becoming more so each day. If you are gun
post-closing all the way through retail and shy about things like suitability and further scruny regarding your
wholesale sales to sales management and originaon pracces, I am thinking this world is not for you.
EVP of American Brokers Conduit, I thought
of myself as one of many knowledgeable What I do see is opportunity for those that are willing to be
people in our industry. educated. Per my conference speakers, only 2% of the eligible
populaon has been penetrated. I am not sure what the number
Since starng my new venture as a should be, as many will never need a reverse mortgage, but when
consultant, I have relied on my experience and past industry I think of my own family members or those of my friends, I can see
partnerships and colleagues to build my business. Truth be told, I a real value to many. If we just think of the higher taxed areas of
knew of reverse mortgages and like many didn’t think posively of the US where the elderly are living longer than ever before, I can
the product as my percepon was that they negavely impacted clearly see how the ability to tap the equity in your home to help
the consumer. Of course what I have found out through educaon you through your later years can be a huge benefit. In the forward
is, there is a great place for this type of lending for many in our world without income to qualify for the payments, these same
communies. clients have been underserved. Another example of the major
differences between forward and reverse worlds is the issue for
Educaon is a primary goal for me in any thing I undertake. I servicers in the non-payment of taxes and insurance. Think about
learn from asking lots of quesons and listening to the answers. As it, typically we have an escrow payment included in our mortgage
a consultant I found I had opportunity to be valuable to clients that payment that goes towards taxes and insurance, even if we waive
had either reverse aspiraons or reverse plaorms. So how did I the escrow (or impound) we understand it is our responsibility. A
get started? reverse scenario is more like when we pay off our mortgage and
we are now on our own, so many forget that this is now their
First I went to one of my old colleagues that I admire for her responsibility. I was happy to hear that servicers are now offering a
sense of integrity and knowledge. I asked her to give me a Reverse hold back opon to pay taxes and insurance for their borrowers.
Mortgage 101 crash course. She gave me all the industry data and
taught me about the different way you had to think about a reverse In the forward world I also advocate partnerships to develop
mortgage. She also opened my eyes to the risks and benefits from referrals and talk about expanding your reach by using the internet.
the borrower and lender aspects. It was a terrific presentaon and In the reverse world the internet is not the primary tool to market
I learned a lot! to, unless of course you are talking to the children of the seniors
you are looking to educate. My favorite thing I learned is the places
Next, I started to get industry publicaons so I could keep up that make the most sense to hold markeng and educaonal
with the changes and issues that confronted the reverse world. seminars, Bob Evans and Sizzler restaurants as an example and
Finally, I bought a cket to the MBA Reverse Mortgage Conference make sure it is in me for the early bird special!
in San Diego last month. I found out later that there was a NRMLA
conference in Philadelphia that same week, which would have This is not meant in any way to make fun of or denigrate the
been handy informaon as I live in Northern Virginia, but all part of importance of this product or its clients! I am just really fascinated
the learning curve! by the way my brain started thinking when I learned more about
the reverse world. As a “forward thinker” I am glad I took the
The MBA Reverse conference was a good one as it looked at opportunity to understand the possibilies of helping those that
reverse mortgages as a newer enty for most, which it was for me need it the most.
and was geared to educate from that perspecve. Through the
conference I learned the industry stascs, although each speaker About Lisa Schreiber: Lisa Schreiber is currently a mortgage
had a different number associated with the current available consultant and speaker with LSK Consultants, LLC. Lisa is a 22 year
equity, from 2.5-4 trillion, understandable as home valuaons are mortgage industry veteran, formerly execuve vice president with
an issue for any type of mortgage these days! American Brokers Conduit and regional vice president with Bank
of America. Her experse resides in building the bridge between
So what were the main things I learned about the reverse corporate goals and successful field implementaon. She can be
world? Besides all the things you already hear; reverse is really reached by email lisa@lskconsultants.com or by phone 540-822-
a new business and not a product as its sales cycle is protracted 9710.
due to the fact that you are selling to not only the senior but their

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stability of a financial giant.
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leader. With $41 billion in market capitalization* and a AA-rating, KBC’s strength gives LLS the ability to fund our
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*As of March 17, 2008. Lender Lead Solutions is a division of World Alliance Financial Corp., a member of the KBC Group. ©2008 World Alliance Financial Corp.

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The Reverse Review May 2008

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May 2008

Ethics Must Deﬁne the Reverse

Reverse Market Outlook

Wall Street Prefers LIBOR

ALSO IN THIS ISSUE

11 Ethics Must Define

6 Ask the Underwriter

Editor Aman Makkar

Copy & Design Editor Harpreet Makkar

Production Manager Jason Westbrook

Sales Manager Gina Smiar

Printer The Ovid Bell Press, Inc.

Subscriptions and Editorial Content

4 May 2008 reversereview.com

Note From the Editor

Thank you, and we look forward to hearing from you soon!

May 2008 reversereview.com 5

Ask the Underwriter

Q: Recently one of my loan ﬁles was

A: The Secondary Market connues to become more

6 May 2008 reversereview.com

most cases, that addional informaon would be of beneﬁt

Q: Is it permissible to take a HECM applicaon prior to

The originaon of a HECM loan is a two-step process M

however, no services resulng in costs to be paid for by FFoundation

Please take a moment and provide us your feedback

Have a question for the underwriter?

Private Label Reverse Private Label Loan

May 2008 reversereview.com 7

Reverse Mortgage Industry Snapshot

Top 10 Rankings by Region

Lender Distribuon by YTD Growth Rate

Growth Rate Lenders YTD MIC Last YTD

8 May 2008 reversereview.com

24 Month Penetraon and Unit Volume

MIC Units Penetration %

May 2008 reversereview.com 9

Getting to the Kitchen Table

17100 Gillette Ave., Irvine, CA 92614

Ethics Must Define the Reverse Mortgage Industry

Formalizing a code of ethics and publicly comming to

You neither need permission nor an act of Congress …

Some years ago, I spoke on the topic of ethics at an

12 May 2008 reversereview.com

What challenges does a lender face servicing this market?

Building the Reverse Mortgage Sales Strategy from the Ground Up

14 May 2008 reversereview.com

What is strengths-based learning, and how does that help

16 May 2008 reversereview.com

from strengths,” i.e., structuring a logiscal, psychological,

18 May 2008 reversereview.com

A traditional, government-insured Reverse Mortgage.

For clients who want the comfort of a ﬁxed rate.

Lower closing costs and eligibility starting at age 60.

Clients can make the most of their higher-valued homes.

To contact Lender Lead Solutions

Are You Sending the Right Marketing Message?

Long-term care is a family issue, but it is more oen a

20 May 2008 reversereview.com

Do you have the right markeng message? Is your

The most successful Reverse Mortgage originators

...exclusive, targeted, motivated

May 2008 reversereview.com 21

Wall Street Prefers LIBOR HECM’s

Formalizing a code of ethics and publicly comming to

So there appear to be straighorward guidelines on how