August 2008

THE

REVERSE
“Forward Thinking in Reverse”
review

Recognizing LOME Risks in Reverse Mortgage Origination

Atare E. Agbamu
PAGE Who knew accumulated assets could actually be a bad thing? For seniors with reverse
mortgages, this may prevent them from gaining access to government funding for
16 healthcare. Read this article to understand the possible risks for your clients and how you
can properly educate them in order to avoid this loss.
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CONTENTS

10 Jump In, The 21 The Foundations 26 Are You Listening

Water is Fine! of Effective Sales to Me?
Janis Arendsen Strategy Sam Collins
Monte Rose

16 Recognizing 23 Selling the

LOME Risks in Numbers
Reverse Mortgage John Lunde

Origination
Atare E. Agbamu

ESSENTIALS
5 Note From the Editor 6 Ask the Underwriter
8 Industry Snapshot 29 Directory
30 The Last Word Top 5 Ways to Pay for Elder Care Services

August 2008 3
 THE

REVERSE review

Co-Editors Aman Makkar & Erica English

Copy Editor Harpreet Makkar

Production Manager Jason Westbrook

Contributors
Ralph Rosynek
John Lunde
Janis Arendsen
Atare Agbamu
Monte Rose
Sam Collins
Valerie VanBooven

Advertising Information
Rates, specifications, and deadline information available.
phone : 858-217-5332
email : advertising@reversereview.com

Subscriptions and Editorial Content

phone : 858-217-5332
email : information@reversereview.com
website : www.reversereview.com

THE
REVERSEreview
10801 Thornmint Rd
Suite 250
San Diego, CA 92127

© 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. Reproductions or distribution of any materials
obtained in the publication without written permission is expressly prohibited. The views, claims and opinions
expressed in article and advertisement herein are not necessarily those of The Reverse Review, its employees,
agents or directors. This publication 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 to ensure accuracy in the content
of the information presented herein, The Reverse Review, LLC is not responsible for any errors, misprints, or
misinformation. Any legal information contained herein is not to be construed as legal advice and is provided for
entertainment or educational purposes only.
Postmaster : Please send address changes to The Reverse Review, 10801 Thornmint, Ste 250, San Diego, CA
92127

4 reversereview.com
 Note From the Editor
Have you ever been disappointed in someone’s attitude, maybe a waiter or
waitress, an associate, friend or family member? In the past few months I
feel like everywhere I’ve gone, I’ve received sub-standard customer service.
(I use the term “customer service” loosely in reference to communication
with clients, associates, business partners, friends, or family.) Given the
feeling of disappointment, I started to research the philosophy and tactics
behind successful communication and would like to share with you a little
of what I’ve learned.

The 7%-38%-55% Rule: A landmark study published by UCLA professor

Albert Mehrabian, one of America’s leading communications experts, identified how we
communicate and documented the validity of “actions speak louder than words”. The results
were mind-boggling! When speaking to one another, our message is interpreted like this:

-7 percent of what is heard are the words (verbal)

-38 percent of what is heard is voice tone (vocal)
-55 percent of what is heard is body language (visual)

On a daily basis, everyone who works around me hears about the importance of customer
service. We critique conversations our reps have with clients, paying close attention to their
tone of voice, choice of words, and whether or not they have a smile on their face while
speaking, because this passes through as well! There is always more than one way to express a
message. It’s important to remember that it’s not what we say, rather how we say it.

When I think of customer service, there’s one company that stands out in my mind. ZAPPOS!
You may or may not have heard of Zappos, but they are an Internet shoe company. They have
THE BEST customer service I’ve ever experienced and in my mind are the epitome of spectacular
customer service.

We’re all in business to make money, but also to provide a service to our clients. Even if we’re
not on the front lines speaking with clients, how we speak with one another is reflected through
our organization. We all must strive to provide the best customer service our clients have ever
received or what I like to call “Zappos-like customer service”.

Aman Makkar
Editor

August 2008 5
 Ask the Underwriter
Ralph Rosynek
Time to review the mailbag and inbox. We thank you
for your support of the Ask the Underwriter column and
look forward to your future questions.
Q
If a Borrower currently has a reverse mortgage, but
is not vested as a life estate, could they now change
the vesting to a life estate? I do believe to re-convey
a deed while having a reverse may not be permitted,
but does that pertain to conveying into a life estate? Will this
create a re-fi situation due to the fact that ownership of the
property would actually be changing?
A
(In “Layman’s Terms”) vesting/property changes in
many cases do not precipitate a refinance. If you
consult the Mortgage and/or Deed of Trust as well as
the servicing information provided by the Lender’s
servicing agent, you will find in most cases that, as with many
“forward” vesting and property issues, changes to the real
estate collateral vesting may result in acceleration of the note
without the prior permission of the Lender. The key operative
words are “without the prior permission of the Lender”.
The true answer to your question must be determined by
the Lender servicer. In an effort to assist your Borrower(s) be
aware that privacy issues will have an impact as to the amount
of assistance you can provide. I would first suggest that the
Borrower consult with an attorney to discuss the nature of any
changes in vesting. To facilitate this conversation you may wish
to direct the Borrower which documents from their closing
package would be best to provide at the time of this meeting.
Additionally, providing appropriate servicing center contact
information will allow for the direct contact by the Borrower
and or their representative.
Caution is offered to Originators. Our innate ability to “want
to help” is sometimes a very difficult behavior to control.
Borrowers should never be guided to make important changes
to their property ownership without the benefit of legal
representation. You are an originator, not an attorney.
Q My Borrowers live in several homes around the
country. Is it the home they spend most of their time
in that determines their principal residence?
A
Principal residence means the dwelling where
the Borrower maintains his or her permanent
place of abode, and typically spends the majority
of the calendar year. A person may have only one
principal residence at any one time. In most cases, at least
6 reversereview.com
one Borrower must occupy, establish, and use the property
as Borrower’s principal residence after the execution of the
Security Instrument. In most cases the Borrower shall continue
to occupy the property as Borrower’s principal residence for the
term of the Security Instrument. In most cases the Borrower’s
failure to maintain subject property as principal residence will be
considered a maturity event under the terms and conditions set
forth in the Security Instrument and could result in a demand for
repayment of the reverse mortgage.
There is no limit on the number of other financed properties
a Borrower may own as long as the subject property is the
Borrower’s principal residence.
In the case where an eligible property is a one to four family
dwelling units, a multi dwelling unit, one unit must be the
Borrower’s principal residence.
Occupancy verification is one of the major issues Underwriter’s
are concerned with daily. Do not be surprised in some cases if
you are requested to provide additional back-up documentation
to verify occupancy, if the “major” Borrower identification
documentation does not clearly provide evidence of the
Borrower primary residence address.
Additionally, do not confuse HECM primary residence guidelines
with other proprietary reverse mortgage products currently
offered in the market. Non-FHA insured programs may provide
variations of primary residence definition including the
permissibility of second home financing.
Q
I just received a completed application package from
one of my Borrowers via the mail. Upon further
inspection I noted that the documents are all signed,
but some of the dates are different. What should I
do?
A
In considering senior behavior, more than likely
the senior read and/or reviewed the documents at
different times. Also likely, would be the possibility
that the forms which were confusing for your
Borrower were reviewed or shown to a trusted advisor prior
to signing. That being said, the best fix for this problem is to
inquire with the Borrower as to the reason for the various
dates. Commit that explanation to an original written
“Processors Certification” to be included in the file at the time
of submission to underwriting.
Q
My recent underwriting submission for my Borrower
was pended due to lack of a medical doctor letter
to attest competency. I already provided the POA
document for review. Why is this needed?
Typically this would be one of the following:
• Social Security Authorization Form
• State issued identification card

A
My suspicion is that your certificate of counseling
lacked evidence of the Borrower being counseled
and/or the application was completed by the
Attorney-In-Fact. The doctor’s letter is required to
verify in fact that both the Borrower was competent at the time
the POA document was executed and/or the Borrower is not
competent at the present time and unable to undertake the
actions and responsibilities of the reverse mortgage transaction.
• Valid Driver’s License
• Valid Passport
• Certified Copy of the Birth Certificate
Other reasonable reliable sources of age verification may be
accepted upon the approval of the Underwriter. If the Borrower
is a permanent resident alien, the file must contain evidence of
lawful permanent residency.

Q
One of my Borrowers is a non-permanent resident
alien. Am I able to continue the application process?
A note about our subject matter expert:
Mr. Rosynek has been involved in mortgage
lending for over 30 years with the last 5+
years exclusively providing reverse mortgage

A
A non-permanent resident alien is eligible for financing lending solutions. To contact Mr. Rosynek or
under the same terms and conditions offered to U.S. to learn more about 1st Reverse Financial
citizens and permanent resident aliens. Borrowers with Services, please visit www.1streverse.com or
diplomatic immunity are not eligible. Permanent/ call 877-574-1000.
non-permanent resident aliens with an Alien Registration Card
(“Green Card”) who are at least 62 years of age at the time of
closing are eligible for a HECM Reverse Mortgage Loan. In the
case of multiple Borrowers, all Borrowers must be at least 62
years of age at the time of closing. Verification that the Borrower
meets the age requirement by obtaining a reliable source of age
verification must be in file.

August 2008 7
 Reverse Mortgage Industry Snapshot
As Of June/July 2008
Statistics 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 14,769 19.88% 24,014 628 122.7% 24.933% 14.2%
2 -1 Pacific/Hawaii 11,830 -11.88% 25,612 587 56.53% 19.971% -16.05%
3 - Mid-Atlantic 7,227 14.21% 11,956 286 101.41% 12.201% 8.8%
4 - Midwest 5,937 -0.44% 11,434 372 59.66% 10.023% -5.15%
5 2 Southwest 4,975 27.79% 8,073 229 89.26% 8.399% 21.74%
6 -1 New York/New Jersey 4,310 -6.83% 8,322 234 95.0% 7.276% -11.24%
7 1 Northwest/Alaska 3,421 18.54% 5,790 219 90.43% 5.775% 12.92%
8 -2 New England 3,223 -18.63% 6,963 237 53.9% 5.441% -22.48%
9 - Rocky Mountain 2,049 26.09% 3,296 141 62.07% 3.459% 20.12%
10 - Great Plains 1,494 6.49% 2,827 128 96.92% 2.522% 1.44%
Industry Totals 59,235 4.97% 108,287 2,172 85.96%

10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates.
Also includes active lenders and growth

Lender Distribution by YTD Growth Rate

Growth Rate Lenders YTD MIC Last YTD

-100% 227 1,793
-99% to -1% 450 26,732 42,773
0 to 100% 293 12,569 9,260
101% to 200% 83 4,276 1,808
201% to 300% 29 738 209
301% to 400% 19 538 116
over 400% 67 5,625 471
New Lenders 1,231 8,757

Lender distribution graph and table, showing number of lenders growing at various growth rates YTD vs. prior
YTD, including volume attributable to each group of lenders.
Client Notices

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 information along with a thorough description 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

8 reversereview.com
 24 Month Penetration and Unit Volume

12000 0.016

0.014

0.012

Penetration
10000
0.01
Units

0.008

0.006
8000

0.004

0.002

6000 0
2006-7 2006-11 2007-3 2007-7 2007-11 2008-3

MIC Units Penetration %

2 year trend graph of monthly HECM unit volume and industry penetration against 62+ homeowner households nationally.
Appendix
1) All statistics based on retail originations from HUD’s Monthly HECM MIC reports
2) Loans are in unit volume, based on HUD reported mortgage insurance certificate issuance
3) Lenders are aggregated using HUD’s lender identification numbers and unique lender names, along with feedback from
reporting lenders
HUD Regions and Corresponding States/Territories

Region 1 - New England Region 3 - Mid-Atlantic Region 5 - Midwest Region 7 - Great Plains Region 9 - Pacific/Hawaii
Connecticut Delaware Illinois Iowa Arizona
Maine District of Columbia Indiana Kansas California
Massachusetts 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

August 2008 9
 Jump In, The Water is Fine!
Janis Arendsen

Have you been sticking your nose up

at the manufactured home borrower?
Like it or not, with the increasing
popularity of the Reverse Mortgage
loan product for the mature borrower,
loan officers and processors are dealing
with more and more manufactured
homes in their portfolios. It makes
sense when one realizes that seniors
have chosen to congregate in the
manufactured home park setting as a
retirement oasis, offering the amenities
of security, recreation and a sense of
community. The concentration of an
active senior population in a close-knit
living atmosphere naturally lends itself
well to word-of-mouth advertising for
the Reverse Mortgage industry. And
now with the recent passage of H.R.
3221 , the housing stimulus bill signed
into law on by President Bush, you can
count on the numbers of manufactured Fortunately, in addition to all the other more-loudly
home loans increasing. trumpeted issues in the bill, less well known is the fact
that the passage of H.R. 3221 has now eliminated the
Why? Thousands and thousands of manufactured manufactured home condo discrimination. The inclusion
homeowners have been disenfranchised from the FHA- of manufactured housing as a component of the bill was
insured loan process by a fluke in the statute and manner largely due to the grassroots efforts of manufactured home
in which their community was legally constructed. If residents themselves who actively cajoled their legislators
the description on land and title documents state a with letter-writing campaigns and petitions, pleas to AARP,
manufactured home is in a condominium manufactured or they even joined lobbying groups to show their support,
home community, these borrowers have been ostracized virtually demanding that they be able to receive the benefits
from the Reverse Mortgage opportunity. By organizing of a Reverse Mortgage. In many cases, these seniors are
the park development under the condominium aegis, already Reverse Mortgage devotees since they had friends
regulators interpreted that a resident’s ownership was in neighboring manufactured home communities with
confined to airspace only when residents protested that they acceptable designations for FHA insurance: Planned Unit
clearly owned their individual deeded plots. The narrow Developments (PUDS) and Subdivisions. Knowing that this is
legal interpretation of a manufactured home situated in a unique case where demand for the product precedes the
communities classified as condos ironically excluded some opportunity for access, I don’t think I exaggerate when I say
of the highest quality senior developments. These parks “Katy, bar the doors!”
often boast of vibrant recreational facilities, in some cases
golf courses and a strong management or homeowner’s The point is if you haven’t dipped your feet in the
association with an overseeing architectural committee. manufactured home Reverse Mortgage pool of loans, you
Because of the commanding oversight presence, the price should think about sticking your toes in sooner rather
of admission to such a development in turn creates a strong than later. The good news is you have some time to
pride of ownership; expectation of upkeep and a more school yourself on the unique properties of manufactured
robust sales market keeps appraisal values localized and home loans and to tighten the logistics within your
current. processing department. According to Daniel Mooney

10 reversereview.com
(Underwriter HECM Coordinator Processing & Underwriting Successful Companies
Division Santa Ana Homeownership Center, Federal Housing
Administration) “while the new statute allows for FHA to Rely On
promulgate regulatory changes and policy revisions that
will enable us to insure loans secured by manufactured ReverseVision
homes located in condominiums, said new policies have not
been enacted/promulgated. I would anticipate a period of
several months (as in six to nine) before FHA is actually able
to institute policies and procedures relevant to the issue at
hand”. Knowing you have a window of time before all the
gears are running, you can acclimate yourself to the water
conditions. In my book, this is the best time to get your feet
wet and set up some in house policies. One of the reasons
many brokers and processors bemoan the manufactured
home loan is that it comes with its own set of obstacles.
Lack of proper information and a disorganized processing
strategy often creates dissention between the borrower
and the lender and the lender comes out the loser, looking
unprofessional and unknowledgeable. If you follow a few
ground rules and recognize that the community camaraderie
can provide the service –oriented loan officer with a
wealth of referral leads, it may be worth the extra time to
troubleshoot some of the idiosyncrasies of the manufactured

“
home.

The point is if you haven’t dipped

your feet in the manufactured home
Reverse Mortgage pool of loans,

”
you should think about sticking your
toes in sooner rather than later.
When you go to research a piece of real estate, you
can usually access it by address, assessor’s parcel number,
legal description or all of the above. However, even if a
Complete integration from origination to
manufactured home sits on a piece of realty and shares
processing, underwriting, closing, and
the features of the real property, it is still distinguished by
shipping.
its HUD label (an affixed HUD Seal (tag/label) located on
the outside of the home. Many people ask, if the home
Highly scalable - for small entities to enter-
is on real property and is being assessed as real property,
prises with correspondents and branches.
then why would a HUD tag be of continuing importance?
Even when a manufactured home is converted to real
Sales oriented graphical interface that
property, it doesn’t remove the fact that the home is still
integrates directly with Microsoft Word and
a manufactured home. The provenance of any HUD home
Outlook.
and its factory design and engineering requirements are
traceable through the individual HUD label. For appraisal Direct export to Celink, RMS, Fannie Mae,
and lending purposes, code should follow code so appraisers UBS, Goldman Sachs, ReverseDocuments
and engineers certifying a home for a manufactured home and others.
loan need to specifically identify the HUD numbers in their
reports. Additionally, building departments utilize the HUD
label as the format for the permit process because it allows
the home to preempt the local building codes. If for any ReverseVision Inc.
3310 Pollock Place • Raleigh, NC 27607
reason the labels are missing, appraisers will often reject www.reversevision.com
the property and refuse to proceed until documentation is
»
(919) 834 0070 • info@reversevision.com

August 2008 11
provided, building departments will refuse to issue certain
and in some states a manufactured home may not be re-sold
if missing a label and an engineer should not proceed with a
HUD foundation without being able to prove that the home
itself is in fact a HUD home.
Certain criteria are absolutes to follow for an FHA-insured
loan on a manufactured home loan. These are:
1. The manufactured must be a HUD home, which means
it must be manufactured after June 15, 1976. If there
are metal plates at the rear of the home that begin
with a three Alpha letters like CAL, ARZ, ORE, that’s
usually a good sign. If the HUD label is missing, usually
a label verification letter from the Institute for Building
Technology and Safety (IBTS) www.ibts.com Which will
give the provenance of the home will suffice.
2. The manufactured home must be classified and taxed as
real estate. A long-term lease may also be acceptable
in certain instances. States vary on how the real
estate classification is accomplished so this is another
important aspect to understand.
3. The axles and tongues must be removed from the
chassis.
4. The manufactured home must have an adequate
perimeter enclosure with appropriate ventilation.
5. Must have a floor area of not less than 400 square feet
6. Built and remains on a permanent chassis.
7. The finished grade elevation beneath the manufactured
home shall be at or above the 100-year return frequency
flood elevation.
8. The home must sit on a permanent foundation and
must have a professional engineer certify that the
foundation meets the PERMANENT FOUNDATION GUIDE
TO MANUFACTURED HOMES (PFGMH) HUD-7584, dated
September 1996.
If the loan officer or processor has never previously
expedited a manufactured home transaction, this last
requirement can upset the whole apple cart. By not
anticipating this, the 11th hour underwriting condition will
give a processor fits trying to find a qualified engineer that
understands manufactured housing. Potentially there is
an even worse scenario. Occasionally the engineer makes
the determination that the foundation will not meet the
HUD guidelines and a repair or retrofit will be required.
If the loan officer or borrower is unprepared for this
possibility, angst and ill will often occur between he/she
and the borrower. “Why didn’t anyone tell me? They’re
supposed to be the experts!” is a recurring outcry. For the
manufactured home processing newbie, don’t be fooled by
the appraisal report, which nine times out of ten stipulates
that the home is on a permanent foundation. Unfortunately,
the appraiser often makes a determination about
»
August 2008 13
“permanence” strictly on the basis that the tires and axles
have been removed or some other vague set of standards,
not on the basis of the foundation attachment.
The reason for the engineering certification requirement
is to establish a national standard of uniformity amidst
inconsistent state installation standards. While manufactured
homes enjoy the benefit of the HUD standardized
preemptive structural, plumbing, and electrical standards
that need to be met before leaving the factory, installation
standards vary from county to county, state to state. So the
home can be designed for stringent seismic, wind and roof
load expectations, but the home may be set up just like the
old trailers of yester year, depending on area designation.
Foundation systems are typically subject for review by the
local code authorities and are often tailored to the site, soil,
wind, flood, seismic and snow conditions of the individual
county or state. Additionally, manufactured homes are
unique in that they are the only type of residential dwelling
that can be classified as either person (chattel) or real
property. In some states, the type of foundation supporting
the manufactured home determines the distinction between
personal and real property. Since the individual jurisdictional
requirements vary significantly, the Engineer Certification
Letter helps to provide an oversight standard. This is
generally an underwriting requirement for all FHA insured
loans, which also include Reverse Mortgages.
for the retrofit contractor that may satisfy the engineer’s
requirements. However, even though proprietary systems
almost always carry engineering approvals, approvals vary
state by state and some building departments may not
approve their design concepts. Therefore finding the right
combination of an engineer and contracting team that
understands the FHA lending process, the building permit
process and the available proprietary retrofit systems AND
that can work within the timeline of your loan lock timeline
can be a bit of a balancing act.
There’s no time like the present to take a plunge! The
manufactured housing industry may just be the next great
niche market.
About Janis Arendsen: Janis Arendsen is owner of On
The Level, a contracting company specializing in the
inspection, servicing and retrofitting of manufactured
housing foundations and works in conjunction with Pacific
Consulting Engineers that provides engineer’s certifications
on foundations. Refer to www.onthelevelcontractors.com
for more information.

If an existing home is already on a foundation, an

engineer can provide a certification attesting to the fact that
the home meets the guidelines. If it does not meet the HUD
guidelines, there are a variety of proprietary or approved
engineered foundation systems that can be retrofitted in
combination with the existing structural components. As
in any industry, one size does not fit all in the engineering
landscape and engineers that specialize in the manufactured
home industry and the HUD inspection specifications are a

“
rare breed. Because there are a vast array of proprietary
products that have been introduced into the national

There’s no time like the present to

take a plunge! The manufactured

”
housing industry may just be the
next great niche market.
marketplace, an engineer’s knowledge about these patented
systems is also an additional benefit since these have all
been pre-engineered and stamped delineating all of the
system specifications.

This also means if the foundation does not meet the

FHA-insured criteria for a permanent foundation, the
engineer does not need to re-invent the wheel with a repair
recommendation---there are a plethora of products available

14 reversereview.com
 REVERSEVISION

ReverseVision
ReverseVision Suite is the leading reverse mortgage
origination solution for mid to large sized organizations.
It covers all aspects of the origination process from
prospect to closing and shipping.

Graphs Workflow End-to-end

POS to Com
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swit anies
shipping

chin
Rev g
erse to
expe Vi
Ease of use Proprietary
loans rien sion
imm c
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incr te
Connectioins ea
prod se in th
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Automatic
update
Mobile Enterprise
solutions
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z Complete integration from origination to processing, underwriting, closing, and shipping.

z
ReverseVision Suite

Highly scalable - for small entities to enterprises with correspondents and branches.
z Sales oriented graphical interface that integrates directly with Microsoft Word and Outlook.
z Direct export to Celink, RMS, Fannie Mae, UBS, Goldman Sachs, and others.
z Business process driven workflow for best practices in the reverse mortgage industry.

Over the past 12 months more than 100 companies with over 2000 users
switched to ReverseVision.

www.reversevision.com z (919) 834 0070 z info@reversevision.com

ReverseVision Inc. z 3310 Pollock Place z Raleigh, NC 27607-7006
RecognizingLOME risks in
reverse mortgage
origination
Atare E. Agbamu

Brenda McBride of Lake Hekmo, Minnesota got what she

wanted: a government-insured reverse mortgage with a
fixed interest rate at 6.125 percent.

At closing, the 72-year-old grandmother of six and

mother of three was ecstatic. She hugged her beaming
loan officer, Sherry Mojah, three times. The experience
reaffirmed Mojah’s decision to quit her CPA firm to serve
seniors via reverse mortgages five years ago.

So happy was McBride with her reverse-mortgage cash,

her loan officer, the process, and her lender, Tru-Reverse
Financial, Inc. (TRF), that she took the unusual step of
writing a fan letter to the Big Man in Washington, thanking
the government for authorizing fixed-rate HECMs and
praising the outstanding ethics, customer service, and
professionalism of the folks at TRF.

The full text of her letter is posted on TRF’s Web site for
maximum marketing impact. The hard copy is included in
the company’s marketing kit.

August 2008
»
17
The scrupulous former CPA, Mojah, was upfront with all
disclosures. Nothing was held back. Nothing was glossed
over. And nothing was misrepresented. McBride knew that
the fixed-rate option is available to customers who want a
lump-sum payout. Her oldest daughter, Carolyn Kumbata, a
lawyer and forensic accountant, was a part of the process
from start to finish. Even she was impressed by Mojah’s
thoroughness.
Because she wanted lots of tax-free cash to fix her
kitchen and bathrooms and take her winsome grandchildren
on a Caribbean cruise, McBride took her net principal limit of
$100,000.
“
Reverse mortgage lenders like fully-funded lump-sums
because Wall Street investors pay
more for them. Investors love them This is the essence of LOME
because they don’t carry future
funding obligations and costs such risks: Unsuspecting reverse-
as the term, tenure, modified term,
and modified tenure options. The
mortgage borrowers could
pile up cash in an account
McBride deal was a win-win for all –
borrower, lender, and investor, or so
it seemed. and deny themselves
After the repairs and the
significant health benefits.
Caribbean vacation, McBride gifted
$5,000 each to her grandchildren toward their college
education. She deposited another $5,000 in her savings/
checking account. And she prudently locked the remaining
$20,000 in a bank CD at 6.75 percent for three years.
Six months into her reverse mortgage loan and three
months following the Caribbean boat trip, her grandchildren
and her children began noticing the symptoms. At first they
meant nothing, just the normal signs of aging.
Normally a spirited woman with a ready smile, Brenda
McBride became listless and withdrawn. She forgot things,
places, and names. She would stare into space for hours,
talking with invisible companions. She repeatedly mixed up
her children’s and grandchildren’s names.
Then, the test results came in. They confirmed her
children’s worst fears: McBride had Alzheimer’s and some
dementia.
Her children held a family meeting to decide how to
manage their mother’s illness. It would be a long-drawn
degenerative situation. It would mean home care attendants,
assisted living, or nursing home. It would come down to
tests, more tests, lots of medication, doctors, nurses, and
medical bills. The costs could be prohibitive and destructive
18 reversereview.com
to her and to her family’s finances. The children wisely
concluded that their mother would have to go on Medicaid.
They applied for Medicaid, but her application was
denied. The reasons: countable assets of $24, 500 (the CD
and cash in her savings/checking account) and “transfer of
assets” issues (gifting $5,000 each to her grandchildren). The
children were stunned beyond words. They were furious.
The other two, Glenn McBride and Susan Poko, blamed the
reverse mortgage lender and her loan officer for not telling
their mother about loss of Medicaid eligibility (LOME) risks
inherent in reverse mortgage transactions. They threatened
to sue the reverse mortgage lender for incomplete
disclosure.
But their oldest sibling, Carolyn
Kumbata, who was part of the
reverse mortgage process, told them
to relax. She knew the Medicaid
denial for their mother stemmed
not from incomplete disclosure,
”
incompetence, or fraud but from the
limited understanding of the FHA-
approved HECM counselors and the
reverse mortgage professionals at
Tru-Reverse Financial. And she told
her siblings so.
LOME Risks
The Brenda McBride vignette illustrates seven truths that
every reverse mortgage origination professional should be
mindful of:
• Medicaid Eligibility is a very valuable benefit for most
seniors (in the event of serious long-term illness, it could
be worth millions of dollars in medical benefits);
• Loss of Medicaid Eligibility (LOME) for public healthcare
benefits is a risk for seniors taking reverse mortgages
without broad consultation involving elder-law and
financial-planning advice;
• The types of payout option loan officers advise
borrowers to take can increase LOME risks;
• Reverse mortgage origination professionals need
to understand how reverse mortgages and public
healthcare benefits interact;
• Failure to grasp and to plan for LOME risks could engulf
reverse mortgage lenders in lender liability litigation;
• Medicaid Eligibility and Medicaid estate recovery issues
should be part of any curriculum for training reverse
mortgage origination professionals;
• The value of public health benefits is so important
to most seniors’ well-being that reverse mortgage
originators would be required to screen for LOME risks
someday.
 A definition is in order here. So what are LOME risks
in reverse mortgage origination? LOME risks are the risk of
reverse-mortgage borrowers losing Medicaid Eligibility by
accumulating assets over regulatory limits, and the risk of
reverse-mortgage lenders attracting widespread customer
displeasure and potential lawsuits.
This definition begs a critical question: What is wrong with
reverse mortgage borrowers accumulating assets? Answer:
They may need Medicaid down the road and accumulated
assets could make them ineligible for its valuable medical
benefits.
Medicaid 101
Medicaid is a federal-state healthcare program for the
poor. To qualify an applicant must show monetary evidence
of poverty. Although the program varies from state to state,
federal “means-test” guidelines can help us understand it.
For 2007, an individual with assets (cash in the bank and
other liquid resources) of $2,000 (or $3,000 for a couple) a
month is eligible. Above those numbers, the individual (or
couple) is disqualified.
Because of the jumble of conflicting federal and state
rules, what is income, asset, or resource is anybody’s guess.
Generally, a person’s home is not counted as a resource.
For our purpose, reverse-mortgage cash is considered loan
proceed; therefore, it is a non-countable asset. However, if
it accumulates in a bank account above the $2,000/$3,000
guidelines, it becomes a countable asset, making the
borrower ineligible for Medicaid benefits.
This is the essence of LOME risks: Unsuspecting reverse-
mortgage borrowers could pile up cash in an account and
deny themselves significant health benefits. They would
turn around and hold the clueless reverse-mortgage lender
liable for ill-advising them. The life-planning ramifications of
reverse mortgage funds are such that originators’ existing
competencies are inadequate to the task of shielding
seniors and themselves from LOME risks.
Of course, in defense, originators may argue that they
are not in the business of dispensing government-insured
healthcare advice. It is like a doctor saying he is not a drug
maker; therefore, he is not responsible for the negative
side effects of the medication he prescribes. If the doctor
discloses and explains the drug’s side effects to the patient
before the patient starts taking the medicine, the doctor
could be less exposed legally. Not disclosing and not
explaining could land the doctor in trouble because it is his
job to know the benefits and the dangers of the medicines
he prescribes to patients. Similarly, the types of reverse
mortgage payout options we recommend to our senior
August 2008
borrowers could have consequences, positive or negative as
with Brenda McBride.
Underwriting any loan is about managing risks. Reverse
mortgages are no exception. LOME risks for seniors and
reverse mortgage lenders are real. They must first be
understood; then managed.
Mitigating LOME Risks
Now that we have some understanding of LOME risks in
reverse mortgage origination, let us look at some ways to
limit or eliminate it. The following ideas could help:
• Become aware of LOME risks through education*;
• Keep the goal of enhancing seniors’ lives in mind at
all times; it will help you think outside the box and
recognize hazards like LOME risks;
• Know that all reverse mortgage payout options except
the line of credit option carry significant LOME risks
because they could lead to risky accumulation of
countable assets;
• Build multi-disciplinary lending teams made up of
reverse mortgage specialists, elder-law attorneys, and
financial planners; alternatively, cultivate elder-law
attorneys and financial planners within your markets that
you can consult for the benefit of your borrowers;
• Know Medicaid’s Eligibility and Estate Recovery rules;
• Know the “transfer of assets” implications of gifting
reverse mortgage cash;
• Know your state-specific Medicaid rules as well as the
federal rules;
• Cultivate knowledgeable contacts within your state’s
Medicaid bureaucracy, and pick their brains often on
changes to the rules;
• Develop Reverse Mortgages and Medicaid 101 Seminars
to educate seniors in your market; healthcare is a critical
value; they will pay attention to what you have to say;
better still, coordinate it with an official of your city or
state Medicaid office;
• Bone up on the Deficit Reduction Act of 2005**;
• Because a senior’s long-term healthcare needs
are unpredictable, they should know the adverse
consequences of accumulating resources;
• Although it is outside the scope of this article, knowing
something about SSI (Supplemental Security Income)
program rules could enhance your understanding of
Medicaid.
Gosselin’s caution
One of the nation’s leading resources in understanding
and mitigating LOME risks is Massachusetts’s elder-law
attorney and reverse mortgage expert, John T. Gosselin.
»
19
During a conversation for my column last year, he shared this
caution, and I believe reverse-mortgage originators ignore it
at their peril:
“To lose the benefit for people who are receiving the
benefit [and for those who will receive it] would probably
be catastrophic. They could put themselves in situations
where their medical debt could consume the value of their
house. If they have no other means of paying for their
medical debt, they could be forced into bankruptcy for their
medical debt.”
Most of us were attracted to reverse mortgages because
they offer the twin blessings of doing good while doing
well in an emerging and growing segment of the mortgage-
lending industry. As our industry evolves into a pillar of
retirement finance for our seniors, we must be on guard to
ensure that we do no harm, unintentionally or otherwise.
We must avoid Brenda McBride situations.
About Atare Agbamu: Atare Agbamu
is the author of Think Reverse! (The
Mortgage Press, coming this fall) and
more than 100 articles on reverse
mortgages. A reverse-mortgage
specialist in Minnesota and an adviser to
institutions across the country, he writes
the Forward on Reverse column in The
REVERSE MORTGAGE
LEADS
10%
OFF YOUR
FIRST ORDER
*CALL FOR DETAILS
800-992-2722 www. ArmLeads.com
20 reversereview.com
Mortgage Press, since 2002. Atare can be reached by email
at atare@thinkreverse.com
Resources
*A two-part article wrote for NRMLA’s Reverse Mortgage
Advisor in 2007 (“Understanding the Linkage Between
Reverse Mortgages, Medicaid, and SSI”) and a four-part piece
for my column, Forward on Reverse, in The Mortgage Press
(“Traps for the Wary: Reverse Mortgages and Healthcare
Benefits …,” Sept.-Dec., 2007) are good places to begin your
LOME education.
**My 2005 conversation (“DRA 2005: Medicaid Rule Change
and Reverse Mortgages”) with Stephen Moses, one of the
nation’s leading authorities on long-term care reform and
a huge fan of reverse mortgages, in Appendix 1 of my book
Think Reverse! (The Mortgage Press, 2008) is a good place to
start.
***NRMLA’s Guide to Medicaid and National Aging Services
Network is a valuable resource that members can download
for $20 at www.nrmlaonline.org
Copyright © 2008, Atare E. Agbamu, CRMS All Rights Reserved.
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 The Foundations of Effective
Sales Strategy
Sales productivity rests on the ability to balance two
key dimensions: (a) personal strategic planning, and (b)
time and energy management. The first area is all about
the understanding (awareness) of one’s key strengths and
leveraging these on the proper market segment. Managing
consistent execution of these critical strategic steps is the
second part of the equation. The effective marriage of insight
and action maximizes the chance for success. You can’t have
one without the other.
Most people typically falter not because they don’t know
what to do - it’s because they (or their managers) do not
have a systematic way to consistently monitor the cause and
effect relationship between daily behavior, sales activities
and measurable results. The absence of a “system” means
inevitably: (a) the dynamics of “motivation” is left to chance
and, more importantly, (b) a learning strategy and process is
not in place to ensure replicability of successful behaviors.
In essence, low productivity can be traced not only to
the deficiencies in strategy, or energy, i.e. execution, but also
because there is no systematic linkage between these two
critical dimensions.
A comprehensive system prevents leaks of energy, ideas,
motivation -- or all of the above. Brian Tracy talks about the
inherent difficulties of the selling profession:
“The cardinal rule of selling is that everything counts...
Everything that affects your thinking throughout the day has
an impact on your personality and performance. Whether
you read an inspirational book in the morning or the
newspaper, whether you listen to the radio in your car or to a
learning audiocassette, whether you eat a salad at lunch or a
hamburger, everything counts. Everything adds up and either
helps you or hurts you.”
August 2008
Monte Rose
How do you create a system so everything adds up
positively?
Even small, ordinary actions, when done consistently
over time, can yield extraordinary results. It is imperative
to develop a system to transform marketing and sales ideas
to sustainable, consistent and measurable activity. The
latter is critical: too much of a good thing can be expensive,
counterproductive or both. For example, failure to carefully
quantify results to time and resources dedicated to
promotional activity will be difficult to correct, especially in a
tough market environment.
The productivity triangle, Skill Building, Personal
Branding and Outreach, is the key to establishing effective
strategy. There are many activities in each silo/area. The key
is to know your own strengths well, i.e. your specific learning
and motivational styles, so that you can apply them to those
activities that “fit” your talent profile and make a positive
impact on your business.
For example, if you have the “Learner” or “Input”
theme (obtained from the Gallup StrengthsFinder Profile
Assessment) as one of your Top Five strengths, you
could easily immerse yourself in researching competitive
information, becoming an expert in Senior health issues,
Gerontology, or Creative Aging trends. Another example of a
“Skill” strategy is to be proficient in your company or lender’s
system, which then allows you to monitor the progress of
your application in the pipeline. Mastery of basic loan issues
(e.g., appraisals, title reports, product features etc.) are all
part of the skill set component of the productivity triangle.
Familiarity with basic tools such as free property valuation
website (e.g. zillow.com and it’s competitors), or learning
how to apply Web 2.0 tactics for creating a community base
are some concrete examples of strategic leverage.
»
21
Brand Management This is how the “productivity triangle” serves
as the foundation of a personal sales strategy. All three
Brand-building activities need to flow organically
are inter-related, and the “mix” will depend on your
from the “market persona” you should be cultivating. This,
specific experience/immersion in the reverse mortgage
in turn, depends on an awareness of your key markets (your field, market conditions, and your business approach. In
“brand community”) and the story/role you can effectively helping producers, one has to generate a discrete list of
own. You need to develop a variety of “elevator speeches”
implementable actions from each silo, and coach around
(aka your audio logo) that are appropriate for your different
how to utilize each person’s unique talents and learning
market sub-segments and prospecting situations. The idea is
style to maximize traction and sustainability. The latter
not to compete with other producers but to own your niche
is key: consistent, thoughtful action is always better that
and be known for your unique strengths and capabilities.
inconsistent, frantic bursts of activity. Under difficult market
Again, the most effective brand-building strategies must flow
conditions, this specific ability for self-regulation, focused
from an awareness of your talent profile. This ensures energy
discipline, and endurance can be a prime differentiator
conservation and sustainability -- because you consistently
between success and failure.
navigate and connect on the basis of your authentic sweet
spot. The more energy and motivation you have, the more About Monte Rose: Monte Rose has
likely you will be able to engage in effective branding actions helped hundreds of seniors obtain a
over time. reverse mortgage during the past 17
years. He is an accomplished speaker and
Tapping the Market
widely quoted industry expert, appearing
Extending one’s reach is probably the most critical in financial publications and nationally
component in today’s market condition. Why? Because syndicated media. He was head of national
of the “noise level” created by the current economic retail sales for Financial Freedom Senior
environment, one can argue that most potential customers Funding Corporation. Monte is a Certified
are not as motivated in exploring Reverse solutions for their Senior Advisor and a Certified Strengths Coach with Gallup
financial needs. Therefore, prospecting as a foundational University. For more information, call 800-516-0545 or email
activity can be even more difficult. info@monterose.biz.
Prospecting is 80% motivation and 20% skill.
Closing the sale is 80% skill and 20% motivation. There are HUD Foundation Specialists
many “Kitchen Table masters” whose business is limited
by prospecting reluctance or ineffective prospecting
approaches. They simply don’t get to enough prospects.
More often than not, however, the limitation is the level
of motivation and energy that is focused on prospecting,
M
Manufactured
actured Hou
Housing
sing
rather than the lack of technique that becomes a
hindrance to sales productivity. The first step in fixing this Troubleshooters
Trouble
problem is understanding what kind of call-reluctance
profile the salesperson has. The awareness of one’s call
reluctance issues enables the producer to apply effective FFoundation
“countermeasures” and thus release the motivational energy Inspections, Upgrades
required for sustained prospecting. & Repairs
Once the prospecting “brake” is released, certain
tactical steps can then be more productively implemented.
As an example, systematically creating a list of Senior Engineer
E
communities, Faith-based communities, Home Health Care Certificatio
C ons
companies, Final Expense Professionals, Home Medical
Supply companies, senior publications, debt counselors, and
other aging-related professionals - and sticking to a schedule
of contacting and consistent follow-up - is one tactic for
effective business development.

The two other parts of your “portfolio”, Skills and

Brand, affect your outreach and prospecting activities. Skill
builds the “content” of your value proposition, while effective
personal brand management builds the “perception” of your
value in your market.

22 reversereview.com
 Selling
the
Numbers
After a one month break, this article continues a
multi-part series about the most important measures
of reverse mortgage success. Each article will walk
through a specific area of the business, focusing on the
key risks and opportunities to growing your reverse
mortgage business.
For years, the most important tool in the reverse
mortgage originator’s tool kit has been the product
comparison worksheet of your point of sale software.
Historically, this has been provided by wholesale lenders
as a complimentary benefit of the broker/correspondent
relationship, but we’ve recently seen a number of new
vendors offering these tools as part of lead management or
customer relationship management (CRM) software at a fee
to the originator.
“
This new activity raises a few interesting questions.
First, why should you consider paying for software that you
currently receive for free from your lender? Second, what
should you look for in evaluating these tools? Another
question you might be asking by this point is why I’m writing
about software when I’m in the market intelligence and
numbers business?
Independent Future
As the reverse mortgage business has expanded over
the past few years, the number of companies originating
loans has grown sufficiently to attract vendors providing
specialized tools for the industry. As an originator, it’s
important to consider what this means for you and the
success of your business.
For any company originating reverse mortgages today,
you have a variety of lender calculators available to you that
price a lender’s products and usually provide associated
consumer disclosures as well. The new breed of vendor
August 2008
John Lunde
calculators include this functionality, but also include more
sophisticated lead tracking and follow-up tools to help
automate simple sales activities and guide sales staff toward
more productive activities.
Aside from the increased functionality (which we’ll
talk about in a second), the first and most obvious benefit
to using a vendor calculator is that you achieve flexibility
to switch lenders or use multiple lenders without changing
the calculator tool your sales force is comfortable using, or
worse, having to use multiple calculator tools. This benefit
cannot be over-stated as we see lenders dramatically re-
pricing product LTVs and moving to a more fluid pricing
environment where originators may receive very different
economics on a loan from competing lenders in the space
of weeks. Originators can’t afford to limit their consumer
appeal by locking themselves into a single lender’s (latest)
LTV curves, nor compromise their own margins by being
unable to capture the best price for their loans.
Identify the key steps in your sales
process and make sure the software
you’re considering captures critical
”
information in a way that educates
the sales rep and manager.
The second benefit is an extension of the first and is
generally not widely available yet, although many signs point
to it developing in the near future. While today’s vendor
tools typically export a loan submission file to a lender’s
LOS, tomorrow’s tools will offer side-by-side comparisons
of multiple lender offerings within a single platform, then
track those loans through to funding and sale. At this
»
point, brokers and correspondents will be able to offer their
23
customers multiple loan options based on current LTV and
economic variables, ensuring continuity for the sales staff,
benefit to the customer and value for the originator.
Evolving Capabilities
Once you’ve set your course as an independent
originator, a big decision still remains in choosing which
vendor software to use. This article isn’t solely about
vendor software selection (which would take a much longer
space to adequately cover) but we can hit the high points
relatively quickly.
There are at least two major areas for functional
improvements in reverse mortgage CRM systems:
automating repetitive processes and encouraging or
reminding users of desired activities. Automation is
relatively straight-forward. For example, if you decide as
a company that it will help your conversion rates to send
a birthday card to all active leads each year, this is easily
automated through your CRM if you’ve captured birth
date in your lead information and either integrated a mail
fulfillment vendor or assigned someone in your company
to run a quick extract periodically to mail or send to a
vendor. There are plenty of similar examples that will make
everyone’s life easier by letting computers do the repetition
(it’s what they’re best at!) and your people do the thinking.
The subject of reminders is a bit more involved since it
24 reversereview.com
necessarily requires your sales reps to perform some action.
Typically these steps involve judgment that only a human
can provide, but just as often in the sales process you have
simply decided that the human touch is more suitable to
sales success. Taking the birthday card example above, you
might have decided that it was more likely to lead to a sale
if your rep called the active leads on their birthdays. Simply
cue up a reminder, let them check a box after they call and
you’re all set.
The examples above are basic, but hopefully illustrative
of the power of expanded functionality in CRM software as
opposed to more elementary product pricing calculators
historically used in the reverse world.
Raw Material For Management
So why am I writing about software? The basic reason
is that the data you create and store in software tools like
your product calculator and more importantly, your CRM
tool, forms the foundation for management decision-making
information. The raw material your data represents can
tell you which of your sales reps are struggling, and even
give you clues as to why. The data will never be the whole
story simply because it would be mind-numbing to track
everything that actually happens in the sales process, but
it’s a very important piece of the story - particularly so when
you’ve predefined the important sales activities you expect
from your reps. So how do you make best use of your
systems for management?
 First, identify the key steps in your sales process and
make sure the software you’re considering captures critical
information in a way that educates the sales rep and
manager. A good example is tracking a particular sales
rep’s lead to application conversion ratio: a great statistic
to capture but you might think about whether the system
you’re considering understands the difference between
transferred leads that converted due to another sales rep’s
efforts and ‘dead’ leads that haven’t converted at all. I’m
not suggesting that there’s a particular right answer to
this typical, confusing situation (that has the benefit of
happening all the time in the real world), just that you
should be thinking about what your company’s answer to
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independent servicers, as well as some of
the largest financial services firms in the
world. Find out more at www.rminsight.net or call 949-281-
6470.

August 2008 25
 Are You Listening to Me?
Sam Collins

My wife often asks me, “Did you hear what I said?” I always say, “Of course.”
Admittedly, I am not always the best listener and she knows it. So, I’d like to share
with you how important it is to be a good listener and how with just a little more
attention, you too can become a better listener and a better senior advisor.

Working with seniors requires you to be a good listener. This skill is difficult for
most of us, and is something we take for granted. Hardly would we ever ask ourselves
“are we good listeners”. However, when it comes to building relationships and
working with seniors you must learn to become a good listener.

In reverse mortgage communications, listening is a skill you must not only perfect,
but you are expected to be the best listener possible for your senior prospects.
Being a good listener is a skill that will help you solve more problems for your senior
prospects and help you avoid conflicts or misunderstandings in your relationship
building process.

When you are in the home of a senior, remember their home is their castle. It is
the place where they have raised their children, had many good times of which they
have fond memories and attachments. When you listen to your senior, you must be

26 reversereview.com
perceptive in order to build your rapport and relationship,
which in turn builds the trust of your senior client.
It doesn’t take a rocket scientist to call a senior, take the
application, and then leave. However, if you failed to listen
and communicate with your senior perceptively, you become
nothing more than an order taker. Your goal is to leave them
with a lasting impression of yourself and have them think of
you as the person who listened and had empathy for their
particular situation. Your perceptive listening will set you
apart from all others.
In today’s fast paced world, listening is seldom easy.
Sometimes we must be selective in our listening, just to
survive the day. We often erect survival barriers, including
that of others talking. So when we are placed in a setting
where we are counted on to listen, often we fail the listening
test. However, once we understand the barriers and how to
deal them, we can become better listeners for others and
also understand while others fail to listen to us.
Have you ever been in a situation where you were in a
conversation, only to say something to the other person and
have them look at you like you were a little crazy?...... What
happened?...... Most likely you were not listening, rather
you were thinking about what you wanted to say or what
you wanted to do. Yes, we have all failed the perceptive
listening test.
We know in order to become better listeners, we must
overcome the barriers. Here are the five most important
barriers that affect our listening:
#1 Preconceived notions. Yes, we all have them, and often
express them to others without even knowing. Many of
these preconceived notions are only that, notions. These
notions can be biased and allow us to block out other
messages that allow new opinions and information to seep
into our minds. Often we think we know what people are
going to say, so we simply don’t listen. We do this a lot with
our spouses, because we think we’ve heard it all before. In
meetings we simply don’t listen because we think the person
doesn’t know what they are talking about or we simply don’t
like them. When we have preconceived notions, we deprive
ourselves of the opportunity to learn a world of knowledge.
What can you do about preconceived notions? Simple,
all we have to do is to remind ourselves to have an open
mind and let new thoughts and ideas filter in.
#2 Our second barrier is haste. Often we do not allow
ourselves enough time to invest in getting in touch with our
senior prospects. We are often in a hurry because we have
too many things to do and so little time to get them all done.
August 2008
Time is our most valuable asset. When we take time to listen
to, we are projecting that we really care, because we are
sharing our most valuable asset. Giving up your time to listen
to your senior clients shows you value their relationship and
puts you into a special category.
#3 Barrier three is the agenda barrier. This barrier is
when we feel what we have to say to our listener is more
important than what they have to say to us. Many of us are
self-involved and care little about what others have to say.
Don’t blame yourself; our society has caused these changes.
However, once you are aware of this trend, you can position
yourself to change. Put your own problems and concerns
on the shelf when you enter your senior’s home, and
concentrate on internalizing what you can do to help them,
by listening perceptively about their agenda, not yours.
#4 Stress is the fourth common barrier in listening. The
world we live in today is full of stress. Each of us has our
own set of problems. The last thing we want is to settle
down and listen to the problems of others. We must learn to
control our stress and allow ourselves to become involved in
productive dialog with our senior clients. Often your visit to
the senior is the light of their day. They need to unload their
stress and they need you to listen.
#5 Barrier 5 is the speed of our brain. Did you know that we
listen at the speed of about 500-600 words per minute, but
only speak at the speed of 150-200 words per minute? This
speed of listening lessens our ability to listen perceptively,
because the speed of our mind is going faster. Yes, your
brain has time to think of other things, rather than listen.
We must force our brains to slow down to listen enough to
hear each word our senior prospects are saying.
To become an effective listener here are some techniques
you can use:
First; clear your mind of all negative thoughts.
Drop preconceived notions and listen openly.
Secondly; start listening with a fresh thought or a
fresh choice of words. Allow yourself to tune into
what the person is saying. When you listen, you
then can add fresh thoughts and open the line of
communications with your senior clients.
Third; concentrate on what is being said. I really
mean it, concentrate. Pretending to listen to
someone is worse than not listening at all. Start
today, concentrate and really do it. When you
concentrate on what is being said, you will put
yourself in a position many of your competitors
will envy. Yes, you will be the one who captures
your business and some of theirs.
»
27
 Fourth; look for the meaning behind what is being
said. If listening to two borrowers discussing their
financial situation, you should be looking for clues
that will determine their true need or financial
pain. When you look for the meaning behind the
words, you are now empowered to become a true
and trusted advisor to your senior clients.
Fifth; do not interrupt. Interrupting is a cardinal
sin and most often may not be forgiven.
Interrupting is considered by seniors to be rude
and disrespectful. Neither of these is good for
you, since most times, you only have one chance
to make an impression. You must work hard and
be conscious of the temptation to interrupt. This
is one of the most difficult techniques to perfect.
Why, because we want to make our opinions
known, rather than listen perceptively to what our
senior client wants to say. You can do it, but you
must work hard to perfect the technique, not to
interrupt.
Sixth; become a good questioner. You must be
prepared to ask questions to get to the bottom of
what it is that will help your clients. If you don’t
know the questions to ask, take time before your
next appointment to have them written down, and
don’t forget to ask them. You may even say, “That
sounds interesting, can you tell me more?” When
you ask questions it shows you are genuinely
interested in the other person. Remember; don’t
forget to listen to the answers to your questions.
Seventh; write the answers down or file the points
of a discussion into your memory bank. Keep
these available for yourself when you reach the
processing portion of the reverse mortgage is
taking place. I want to be able to refer to small
things I learned during our visit and use these to
build my trusting relationship even further.
Eighth; make sure our clients have our undivided
attention. We must block out anything that might
distract us from listening attentively. For example,
I never take my cell phone into an appointment. I
know if the cell phone rings, it will not only distract
me but my senior client. I also ask my senior client
to refrain from phone calls, and stress that the
information we discuss is very important to their
future and I do not want them to miss anything
vital to their situation. Most agree and respect
you even more. This also elevates your status and
value.
28
Ninth; use facial expressions and body movements
that project positive thoughts into the minds of
your senior clients. A smile or look of affirmation
that you understand is important. A blank look
or smile at the wrong time indicates you are not
listening. A good listener can say more than
words, just through the use of improper facial
expressions and body movements. I recall the
story of a friend who sat by the side of an ill friend
all night. The friend never said a word, but his ill
friend said he felt the most comfort and secure
because his friend was just there.
Tenth; do not over react to highly emotional
words. Effective listeners respond after
contemplation and react in a positive non-
emotional manner. Good listeners avoid being
trapped by emotional tones and innuendoes.
Listening to the entire story will allow you to reach
a common ground and react positively.
Good listening skills are something you must have
in order to be effective in your communications. Good
listening is learned and requires you to be willing to break
through the barrier and use effective techniques. Being a
good listener is easier said than done. I have to work on my
perceptive listening on a daily basis, and admittedly, I am
getting better, but I am still working hard to take my listening
to the next level.
I have a challenge for you. On your next appointment,
take five minutes to read this article again. Challenge
yourself to become the best possible listener. Now, imagine
what you would expect from someone who is listening to
you to solve your particular situation or problem. When you
hear through the ears of the other person you will elevate
your listening and be able to offer the best possible service
for your senior clients and this will position you to become
the best senior advisor in your marketplace and bring you
enormous satisfaction of a job well done.
About Sam Collins: Sam Collins is
the President of Sam Collins Reverse
Marketing, LLC and Founder of REMALO,
the Reverse Mortgage Association for Loan
Officers. REMALO is a web based National
sales, marketing, training, and full service
center, created exclusively for Reverse
Mortgage Loan Officers, Correspondents,
Branch Managers, and key executives, and
brokers. www.remalo.org
reversereview.com
 Directory

1st Reverse Financial Services, LLC Monte Rose OnTheLevel

410 Quail Ridge Drive 17100 Gillette Ave 2982 Ora Avo Terrace
Westmont, Illinois 60559 Irvine, CA 92614 Vista, CA 92084
(877) 574 - 1000 (800) 516 - 0545 (800) 909 - 1110
info@1streverse.com monterose.biz onthelevel@mac.com
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America’s Recommended Mailers, Inc. Reverse Mortgage Association for Loan John Lunde
1680 S. Hwy 121, Bldg. B Officers Reverse Market Insight, Inc.
Lewisville, TX 75067 22 Polly Drummond Hill Rd. Aliso Viejo, CA
(800) 992 - 2722 Newark, DE 19711 (949) 429 - 0452
armleads.com (877) 2NARMLO (877) 262 - 7656 rminsight.net
remalo.org info@rminsight.net

10801 Thornmint Rd
Suite 250
San Diego, CA 92127
(877) 229 - 7799
appraiserloft.com
information@appraiserloft.com
Celink
Reverse Mortgage Servicer
3900 Capital City Blvd
Lansing, MI 48906
www.celink.com
Reverse Vision
3310 Pollock Place
Valerie VanBooven Raleigh, NC 27607
Next Generation Financial Services (919) 834 - 0070
Reverse Mortgage Nation reversevision.com
3301 Boston Street info@reversevision.com
Baltimore, MD 21224
(888) 973 - 8377
ngfs.net Atare E. Agbamu
Think Reverse!
www.thinkreverse.com
atare@thinkreverse.com

August 2008 29
 The Last Word
Top 5 Ways to Pay for Elder Care Services
Valerie VanBooven
This month’s focus for most contributors will probably be
related to HR 3221 and the issues surrounding this poorly written
bill. Everyone seems to have an opinion and everyone has their
own interpretation of the 300 page compilation of contradictions.
My only opinion is that until I see the mortgagee letters, it is
business as usual. Therefore, my focus this month is on marketing
and education that should go hand-in-hand with Reverse
Mortgages. For those of you who haven’t studied the senior
market in-depth and aren’t aware of the many concerns seniors
have- here are their top fears:
1. Running out of money.
2. Losing their ability to maintain their independence and choice.
The need for long-term care can make both of these fears
become reality. The more we educate ourselves, the more we
educate our prospects, leads and referral sources about solutions
to problems. One of the biggest elephants in the room when it
comes to long-term care is MONEY. That’s where you come in…
Here are the top 5 ways to pay for elder care services. The
more you share your depth of knowledge on these issues, the
more credibility and trust you establish in your community. Use
this information as a handout, flyer, leave-behind, or added value
service.
Privately paying for long-term care means paying for care out of
your own income, investments, savings and assets.
Long-term care insurance will pay for in-home care, assisted living,
and nursing home care. This is the most appropriate and needed
form of insurance protection available to us today. Long-term care
insurance should be termed “lifestyle” insurance (it’s NOT nursing
home insurance!). If your vision of your later years includes sitting
at home in your own recliner, with your own remote control,
watching your own TV….well, you should be planning for that
future with long-term care insurance.
Reverse mortgages (Home Equity Conversion Mortgages) have
become one of the most popular and accepted way of paying for
many different expenses, including the cost of long-term care.
Reverse mortgages are designed to keep seniors at home longer.
A reverse mortgage can pay for in-home care, home repair, home
modification, and any other need a senior may have.
Government assistance should be a last resort when considering
how to pay for long-term care. This type of assistance refers to
relying on the Medicaid system. Medicaid will pay for long-term
care for seniors who cannot afford to pay for care themselves.
Keep in mind that Medicaid is an under-funded and over-burdened
system, therefore Medicaid resources are limited. This means that
in many areas Medicaid beds in nursing homes are difficult to find.
30 reversereview.com
Families may end up driving long distances to visit their loved ones.
Traditionally, Medicaid resources for in-home care are extremely
limited, which means most seniors who apply for Medicaid end
up in a nursing home type setting. The Deficit Reduction Act 2005
makes qualifying for Medicaid even more difficult for most families.
Planning ahead is really the only viable option for families today.
VA Aid and Attendance Pension Benefit: The Veterans
Administration has established a pension program whereby your
purchase of personal care and attendant home services may be
paid for through your acquired pension. If you are a Veteran or
the surviving spouse of a Veteran who has served at least 90
days or more on active duty with one day beginning or ending
during a period of war, and you are in need of assistance at HOME
due to your disabilities, you may be eligible for VA’s non-service
connected disability pension. www.veterans-express.org
Medicare and Other Health Insurances: Medicare is a federal
health insurance program for people 65 and older, certain people
with disabilities, and ESRD (End Stage Renal Disease). It pays for
much of your health care, but not all of it. There are some costs
you will have to pay yourself. (www.medicare.gov)
There are other kinds of health insurance that may help pay the
costs that Medicare does not. Medicare Supplements (Medi-gap
Policies) and Long-Term Care Insurance will pick up some of the
costs that Medicare will not pay for.
Medicare was implemented in 1965. How many times has
Medicare been over-hauled since 1965? NEVER. It was not
designed to pay for care related to diseases or conditions such
as Alzheimer’s disease, Parkinson’s, or MS. The average life
expectancy was much lower in 1965 because medical technology
was not as advanced. Medicare was designed for SHORT-TERM
acute care, and short-term rehabilitative stays in a rehab or
long-term care facility. Although Medicare Part D was added in
2004/2005 to help with the costs of prescription drugs, Medicare
still does not pay for long-term care.
About Valerie VanBooven: Valerie
VanBooven RN BSN is a professional speaker
and the author of “The Senior Solution:
A Family Guide to Keeping Senior Home
for Life!” She educates consumers and
professionals about the issues surrounding
long-term care. She also serves as the
national marketing director for Next
Generation Financial Services, a Division of
1st Mariner Bank. Valerie VanBooven can be
reached via email at valerie@theltcexpert.com.
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