THE

REVERSE
review
Recognizing LOME Risks in Reverse Mortgage Originaton
“Forward Thinking in Reverse”
PAGE
16
Atare E. Agbamu
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
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.
August 2008
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August 2008
3
CONTENTS
ESSENTI ALS
10 Jump In, The
Water is Fine!
Janis Arendsen
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
16Recognizing
LOME Risks in
Reverse Mortgage
Originaton
Atare E. Agbamu
21The Foundatons
of Effectve Sales
Strategy
Monte Rose
23Selling the
Numbers
John Lunde
26 Are You Listening
to Me?
Sam Collins
4
reversereview.com
Co-Edit ors Aman Makkar & Erica English
THE
REVERSE
review
Product ion Manager Jason Westbrook
© 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. Reproductons or distributon of any materials
obtained in the publicaton without writen permission is expressly prohibited. The views, claims and opinions
expressed in artcle and advertsement herein are not necessarily those of The Reverse Review, its employees,
agents or directors. This publicaton 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 informaton presented herein, The Reverse Review, LLC is not responsible for any errors, misprints, or
misinformaton. Any legal informaton contained herein is not to be construed as legal advice and is provided for
entertainment or educatonal purposes only.
Postmaster : Please send address changes to The Reverse Review, 10801 Thornmint, Ste 250, San Diego, CA
92127
10801 Thornmint Rd
Suite 250
San Diego, CA 92127
Subscript ions and Edit orial Cont ent
phone : 858-217-5332
email : informaton@reversereview.com
website : www.reversereview.com
Advert ising I nformat ion
Rates, specificatons, and deadline informaton available.
phone : 858-217-5332
email : advertsing@reversereview.com
THE
REVERSEreview
Cont ribut ors
Ralph Rosynek
John Lunde
Janis Arendsen
Atare Agbamu
Monte Rose
Sam Collins
Valerie VanBooven
Copy Edit or Harpreet Makkar
August 2008
5
Note From the Editor
Have you ever been disappointed in someone’s at tude, 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 communicaton
with clients, associates, business partners, friends, or family.) Given the
feeling of disappointment, I started to research the philosophy and tactcs
behind successful communicaton and would like to share with you a litle
of what I’ve learned.
The 7%-38%-55% Rule: A landmark study published by UCLA professor
Albert Mehrabian, one of America’s leading communicatons experts, identfied how we
communicate and documented the validity of “actons 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 critque conversatons our reps have with clients, paying close atenton 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 organizaton. 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
6
reversereview.com
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 questons.
If a Borrower currently has a reverse mortgage, but
is not vested as a life estate, could they now change
the vestng to a life estate? I do believe to re-convey
a deed while having a reverse may not be permited,
but does that pertain to conveying into a life estate? Will this
create a re-fi situaton due to the fact that ownership of the
property would actually be changing?
(In “Layman’s Terms”) vestng/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 informaton provided by the Lender’s
servicing agent, you will find in most cases that, as with many
“forward” vestng and property issues, changes to the real
estate collateral vestng may result in acceleraton of the note
without the prior permission of the Lender. The key operatve
words are “without the prior permission of the Lender”.
The true answer to your queston 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 atorney to discuss the nature of any
changes in vestng. To facilitate this conversaton you may wish
to direct the Borrower which documents from their closing
package would be best to provide at the tme of this meetng.
Additonally, providing appropriate servicing center contact
informaton will allow for the direct contact by the Borrower
and or their representatve.
Cauton is offered to Originators. Our innate ability to “want
to help” is sometmes a very diffi cult behavior to control.
Borrowers should never be guided to make important changes
to their property ownership without the benefit of legal
representaton. You are an originator, not an atorney.
My Borrowers live in several homes around the
country. Is it the home they spend most of their tme
in that determines their principal residence?
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 tme. In most cases, at least
one Borrower must occupy, establish, and use the property
as Borrower’s principal residence afer the executon of the
Security Instrument. In most cases the Borrower shall contnue
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 conditons 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 propertes
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 mult dwelling unit, one unit must be the
Borrower’s principal residence.
Occupancy verificaton 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 additonal back-up documentaton
to verify occupancy, if the “major” Borrower identficaton
documentaton does not clearly provide evidence of the
Borrower primary residence address.
Additonally, do not confuse HECM primary residence guidelines
with other proprietary reverse mortgage products currently
offered in the market. Non-FHA insured programs may provide
variatons of primary residence definiton including the
permissibility of second home financing.
I just received a completed applicaton package from
one of my Borrowers via the mail. Upon further
inspecton I noted that the documents are all signed,
but some of the dates are different. What should I
do?
In considering senior behavior, more than likely
the senior read and/or reviewed the documents at
different tmes. 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 explanaton to an original writen
“Processors Certficaton” to be included in the file at the tme
of submission to underwritng.
Ask the Underwriter
Ralph Rosynek
Q
A
Q
A
Q
A
August 2008
7
My recent underwritng submission for my Borrower
was pended due to lack of a medical doctor leter
to atest competency. I already provided the POA
document for review. Why is this needed?
My suspicion is that your certficate of counseling
lacked evidence of the Borrower being counseled
and/or the applicaton was completed by the
Atorney-In-Fact. The doctor’s leter is required to
verify in fact that both the Borrower was competent at the tme
the POA document was executed and/or the Borrower is not
competent at the present tme and unable to undertake the
actons and responsibilites of the reverse mortgage transacton.
One of my Borrowers is a non-permanent resident
alien. Am I able to contnue the applicaton process?
A non-permanent resident alien is eligible for financing
under the same terms and conditons offered to U.S.
citzens and permanent resident aliens. Borrowers with
diplomatc immunity are not eligible. Permanent/
non-permanent resident aliens with an Alien Registraton Card
(“Green Card”) who are at least 62 years of age at the tme of
closing are eligible for a HECM Reverse Mortgage Loan. In the
case of multple Borrowers, all Borrowers must be at least 62
years of age at the tme of closing. Verificaton that the Borrower
meets the age requirement by obtaining a reliable source of age
verificaton must be in file.
Typically this would be one of the following:
Social Security Authorizaton Form •
State issued identficaton card •
Valid Driver’s License •
Valid Passport •
Certfied Copy of the Birth Certficate •
Other reasonable reliable sources of age verificaton 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.
A note about our subject mater expert:
Mr. Rosynek has been involved in mortgage
lending for over 30 years with the last 5+
years exclusively providing reverse mortgage
lending solutons. To contact Mr. Rosynek or
to learn more about 1st Reverse Financial
Services, please visit www.1streverse.com or
call 877-574-1000.
Q
A
Q
A
8
reversereview.com
Reverse Mortgage Industry Snapshot
As Of June/ July 2008
10 Regions, ranked by HECM unit volume YTD. Including rank change from prior YTD, as well as growth rates.
Also includes actve lenders and growth
Lender distributon graph and table, showing number of lenders growing at various growth rates YTD vs. prior
YTD, including volume atributable to each group of lenders.
Client Notces
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 informaton along with a thorough descripton 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
Rank Chg 2008YTD 2008
1 1 14,769 628
2 -1 11,830 587
3 - 7,227 286
4 - 5,937 372
5 2 4,975 229
6 -1 4,310 234
7 1 3,421 219
8 -2 3,223 237
9 - 2,049 141
10 - 1,494 128
59,235 2,172 Industry Totals 4.97% 108,287 85.96%
Great Plains 6.49% 2,827 96.92% 2.522% 1.44%
Rocky Mountain 26.09% 3,296 62.07% 3.459% 20.12%
New England -18.63% 6,963 53.9% 5.441% -22.48%
Northwest/Alaska 18.54% 5,790 90.43% 5.775% 12.92%
New York/New Jersey -6.83% 8,322 95.0% 7.276% -11.24%
Southwest 27.79% 8,073 89.26% 8.399% 21.74%
Midwest -0.44% 11,434 59.66% 10.023% -5.15%
Mid-Atlantic 14.21% 11,956 101.41% 12.201% 8.8%
Pacific/Hawaii -11.88% 25,612 56.53% 19.971% -16.05%
Southeast/Caribbean 19.88% 24,014 122.7% 24.933% 14.2%
Endorsements Active Lenders Region Share
Region YTDChg% 2007TOT Chg% 2008YTD Chg%
New Lenders 1,231 8,757
301% to 400% 19 538 116
over 400% 67 5,625 471
101% to 200% 83 4,276 1,808
201% to 300% 29 738 209
-99% to -1% 450 26,732 42,773
0 to 100% 293 12,569 9,260
Growth Rate Lenders YTD MIC Last YTD
-100% 227 1,793
Lender Distributon by YTD Growth Rate
Statstcs Provided by Reverse Market Insight
Top 10 Rankings by Region
August 2008
9
2 year trend graph of monthly HECM unit volume and industry penetraton against 62+ homeowner households natonally.
Appendix
1) All statstcs based on retail originatons from HUD’s Monthly HECM MIC reports
2) Loans are in unit volume, based on HUD reported mortgage insurance certficate issuance
3) Lenders are aggregated using HUD’s lender identficaton numbers and unique lender names, along with feedback from
reportng lenders
HUD Regions and Corresponding States/Territories
Region 1 - New England
Connectcut
Maine
Massachusets
New Hampshire
Rhode Island
Vermont
Region 2 - New York/New Jersey
New York
New Jersey
Region 3 - Mid-Atlantc
Delaware
District of Columbia
Maryland
Pennsylvania
Virginia
West Virginia
Region 4 - Southeast/Caribbean
Alabama
Florida
Georgia
Kentucky
Mississippi
North Carolina
Puerto Rico
South Carolina
Tennessee
U.S. Virgin Islands
Region 5 - Midwest
Illinois
Indiana
Michigan
Minnesota
Ohio
Wisconsin
Region 6 - Southwest
Arkansas
Louisiana
New Mexico
Oklahoma
Texas
Region 7 - Great Plains
Iowa
Kansas
Missouri
Nebraska
Region 8 - Rocky Mountain
Colorado
Montana
North Dakota
South Dakota
Utah
Wyoming
Region 9 - Pacific/Hawaii
Arizona
California
Federated States of Micronesia
Hawaii
Nevada
Region 10 - Northwest/Alaska
Alaska
Idaho
Oregon
Washington
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
6000
8000
10000
12000
2006-7 2006-11 2007-3 2007-7 2007-11 2008-3
P
e
n
e
t
r
a
t
i
o
n
U
n
i
t
s
MIC Units Penetration %
24 Month Penetraton and Unit Volume
10
reversereview.com
Jump In, Te Water is Fine!
Janis Arendsen
Have you been stcking 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 offi cers and processors are dealing
with more and more manufactured
homes in their portolios. It makes
sense when one realizes that seniors
have chosen to congregate in the
manufactured home park set ng as a
retrement oasis, offering the amenites
of security, recreaton and a sense of
community. The concentraton of an
actve senior populaton in a close-knit
living atmosphere naturally lends itself
well to word-of-mouth advertsing for
the Reverse Mortgage industry. And
now with the recent passage of H.R.
3221 , the housing stmulus bill signed
into law on by President Bush, you can
count on the numbers of manufactured
home loans increasing.
Why? Thousands and thousands of manufactured
homeowners have been disenfranchised from the FHA-
insured loan process by a fluke in the statute and manner
in which their community was legally constructed. If
the descripton on land and ttle documents state a
manufactured home is in a condominium manufactured
home community, these borrowers have been ostracized
from the Reverse Mortgage opportunity. By organizing
the park development under the condominium aegis,
regulators interpreted that a resident’s ownership was
confined to airspace only when residents protested that they
clearly owned their individual deeded plots. The narrow
legal interpretaton of a manufactured home situated in
communites classified as condos ironically excluded some
of the highest quality senior developments. These parks
ofen boast of vibrant recreatonal facilites, in some cases
golf courses and a strong management or homeowner’s
associaton with an overseeing architectural commitee.
Because of the commanding oversight presence, the price
of admission to such a development in turn creates a strong
pride of ownership; expectaton of upkeep and a more
robust sales market keeps appraisal values localized and
current.
Fortunately, in additon to all the other more-loudly
trumpeted issues in the bill, less well known is the fact
that the passage of H.R. 3221 has now eliminated the
manufactured home condo discriminaton. The inclusion
of manufactured housing as a component of the bill was
largely due to the grassroots efforts of manufactured home
residents themselves who actvely cajoled their legislators
with leter-writng campaigns and pettons, pleas to AARP,
or they even joined lobbying groups to show their support,
virtually demanding that they be able to receive the benefits
of a Reverse Mortgage. In many cases, these seniors are
already Reverse Mortgage devotees since they had friends
in neighboring manufactured home communites with
acceptable designatons for FHA insurance: Planned Unit
Developments (PUDS) and Subdivisions. Knowing that this is
a unique case where demand for the product precedes the
opportunity for access, I don’t think I exaggerate when I say
“Katy, bar the doors!”
The point is if you haven’t dipped your feet in the
manufactured home Reverse Mortgage pool of loans, you
should think about stcking your toes in sooner rather
than later. The good news is you have some tme to
school yourself on the unique propertes of manufactured
home loans and to tghten the logistcs within your
processing department. According to Daniel Mooney
August 2008
11
(Underwriter HECM Coordinator Processing & Underwritng
Division Santa Ana Homeownership Center, Federal Housing
Administraton) “while the new statute allows for FHA to
promulgate regulatory changes and policy revisions that
will enable us to insure loans secured by manufactured
homes located in condominiums, said new policies have not
been enacted/promulgated. I would antcipate a period of
several months (as in six to nine) before FHA is actually able
to insttute policies and procedures relevant to the issue at
hand”. Knowing you have a window of tme before all the
gears are running, you can acclimate yourself to the water
conditons. In my book, this is the best tme 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 informaton and a disorganized processing
strategy ofen creates dissenton 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 offi cer with a
wealth of referral leads, it may be worth the extra tme to
troubleshoot some of the idiosyncrasies of the manufactured
home.
When you go to research a piece of real estate, you
can usually access it by address, assessor’s parcel number,
legal descripton or all of the above. However, even if a
manufactured home sits on a piece of realty and shares
the features of the real property, it is stll distnguished by
its HUD label (an affi xed HUD Seal (tag/label) located on
the outside of the home. Many people ask, if the home
is on real property and is being assessed as real property,
then why would a HUD tag be of contnuing importance?
Even when a manufactured home is converted to real
property, it doesn’t remove the fact that the home is stll
a manufactured home. The provenance of any HUD home
and its factory design and engineering requirements are
traceable through the individual HUD label. For appraisal
and lending purposes, code should follow code so appraisers
and engineers certfying a home for a manufactured home
loan need to specifically identfy the HUD numbers in their
reports. Additonally, building departments utlize the HUD
label as the format for the permit process because it allows
the home to preempt the local building codes. If for any
reason the labels are missing, appraisers will ofen reject
the property and refuse to proceed untl documentaton is
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»


The point is if you haven’t dipped
your feet in the manufactured home
Reverse Mortgage pool of loans,
you should think about stcking your
toes in sooner rather than later.
August 2008
13
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 foundaton 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:
The manufactured must be a HUD home, which means 1.
it must be manufactured afer June 15, 1976. If there
are metal plates at the rear of the home that begin
with a three Alpha leters like CAL, ARZ, ORE, that’s
usually a good sign. If the HUD label is missing, usually
a label verificaton leter from the Insttute for Building
Technology and Safety (IBTS) www.ibts.com Which will
give the provenance of the home will suffi ce.
The manufactured home must be classified and taxed as 2.
real estate. A long-term lease may also be acceptable
in certain instances. States vary on how the real
estate classificaton is accomplished so this is another
important aspect to understand.
The axles and tongues must be removed from the 3.
chassis.
The manufactured home must have an adequate 4.
perimeter enclosure with appropriate ventlaton.
Must have a floor area of not less than 400 square feet 5.
Built and remains on a permanent chassis. 6.
The finished grade elevaton beneath the manufactured 7.
home shall be at or above the 100-year return frequency
flood elevaton.
The home must sit on a permanent foundaton and 8.
must have a professional engineer certfy that the
foundaton meets the PERMANENT FOUNDATION GUIDE
TO MANUFACTURED HOMES (PFGMH) HUD-7584, dated
September 1996.
If the loan offi cer or processor has never previously
expedited a manufactured home transacton, this last
requirement can upset the whole apple cart. By not
antcipatng this, the 11th hour underwritng conditon will
give a processor fits trying to find a qualified engineer that
understands manufactured housing. Potentally there is
an even worse scenario. Occasionally the engineer makes
the determinaton that the foundaton will not meet the
HUD guidelines and a repair or retrofit will be required.
If the loan offi cer or borrower is unprepared for this
possibility, angst and ill will ofen 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 tmes out of ten stpulates
that the home is on a permanent foundaton. Unfortunately,
the appraiser ofen makes a determinaton about
»
14
reversereview.com

“permanence” strictly on the basis that the tres and axles
have been removed or some other vague set of standards,
not on the basis of the foundaton atachment.
The reason for the engineering certficaton requirement
is to establish a natonal standard of uniformity amidst
inconsistent state installaton standards. While manufactured
homes enjoy the benefit of the HUD standardized
preemptve structural, plumbing, and electrical standards
that need to be met before leaving the factory, installaton
standards vary from county to county, state to state. So the
home can be designed for stringent seismic, wind and roof
load expectatons, but the home may be set up just like the
old trailers of yester year, depending on area designaton.
Foundaton systems are typically subject for review by the
local code authorites and are ofen tailored to the site, soil,
wind, flood, seismic and snow conditons of the individual
county or state. Additonally, manufactured homes are
unique in that they are the only type of residental dwelling
that can be classified as either person (chatel) or real
property. In some states, the type of foundaton supportng
the manufactured home determines the distncton between
personal and real property. Since the individual jurisdictonal
requirements vary significantly, the Engineer Certficaton
Leter helps to provide an oversight standard. This is
generally an underwritng requirement for all FHA insured
loans, which also include Reverse Mortgages.
If an existng home is already on a foundaton, an
engineer can provide a certficaton atestng 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 foundaton systems that can be retrofited in
combinaton with the existng 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 inspecton specificatons are a
rare breed. Because there are a vast array of proprietary
products that have been introduced into the natonal
marketplace, an engineer’s knowledge about these patented
systems is also an additonal benefit since these have all
been pre-engineered and stamped delineatng all of the
system specificatons.
This also means if the foundaton does not meet the
FHA-insured criteria for a permanent foundaton, the
engineer does not need to re-invent the wheel with a repair
recommendaton---there are a plethora of products available
for the retrofit contractor that may satsfy 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
combinaton of an engineer and contractng team that
understands the FHA lending process, the building permit
process and the available proprietary retrofit systems AND
that can work within the tmeline of your loan lock tmeline
can be a bit of a balancing act.
There’s no tme 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 contractng company specializing in the
inspecton, servicing and retrofit ng of manufactured
housing foundatons and works in conjuncton with Pacific
Consultng Engineers that provides engineer’s certficatons
on foundatons. Refer to www.onthelevelcontractors.com
for more informaton.

There’s no tme like the present to
take a plunge! The manufactured
housing industry may just be the
next great niche market.
Rever seVi si on
REVERSEVISION
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Over the past 12 months more than 100 companies with over 2000 users
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ReverseVision Inc. z 3310 Pollock Place z Raleigh, NC 27607-7006
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August 2008
17
»
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 ecstatc. She hugged her beaming
loan offi cer, Sherry Mojah, three tmes. The experience
reaffi rmed 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 offi cer, the process, and her lender, Tru-Reverse
Financial, Inc. (TRF), that she took the unusual step of
writng a fan leter 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 leter is posted on TRF’s Web site for
maximum marketng impact. The hard copy is included in
the company’s marketng kit.
Recognizing
LOME risks in
reverse mortgage
origination
Atare E. Agbamu
18
reversereview.com
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 opton 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
because they don’t carry future
funding obligatons and costs such
as the term, tenure, modified term,
and modified tenure optons. The
McBride deal was a win-win for all –
borrower, lender, and investor, or so
it seemed.
Afer the repairs and the
Caribbean vacaton, McBride gifed
$5,000 each to her grandchildren toward their college
educaton. 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 notcing 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
dementa.
Her children held a family meetng to decide how to
manage their mother’s illness. It would be a long-drawn
degeneratve situaton. It would mean home care atendants,
assisted living, or nursing home. It would come down to
tests, more tests, lots of medicaton, doctors, nurses, and
medical bills. The costs could be prohibitve and destructve
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 applicaton was
denied. The reasons: countable assets of $24, 500 (the CD
and cash in her savings/checking account) and “transfer of
assets” issues (gifing $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 offi cer for not telling
their mother about loss of Medicaid eligibility (LOME) risks
inherent in reverse mortgage transactons. 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 vignete illustrates seven truths that
every reverse mortgage originaton 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 consultaton involving elder-law and
financial-planning advice;
The types of payout opton loan offi cers advise •
borrowers to take can increase LOME risks;
Reverse mortgage originaton 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 litgaton;
Medicaid Eligibility and Medicaid estate recovery issues •
should be part of any curriculum for training reverse
mortgage originaton 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.


This is the essence of LOME
risks: Unsuspectng reverse-
mortgage borrowers could
pile up cash in an account
and deny themselves
significant health benefits.
August 2008
19
A definiton is in order here. So what are LOME risks
in reverse mortgage originaton? LOME risks are the risk of
reverse-mortgage borrowers losing Medicaid Eligibility by
accumulatng assets over regulatory limits, and the risk of
reverse-mortgage lenders atractng widespread customer
displeasure and potental lawsuits.
This definiton begs a critcal queston: What is wrong with
reverse mortgage borrowers accumulatng 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 conflictng 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: Unsuspectng 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 ramificatons of
reverse mortgage funds are such that originators’ existng
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 negatve
side effects of the medicaton he prescribes. If the doctor
discloses and explains the drug’s side effects to the patent
before the patent 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 patents. Similarly, the types of reverse
mortgage payout optons we recommend to our senior
borrowers could have consequences, positve or negatve as
with Brenda McBride.

Underwritng any loan is about managing risks. Reverse
mortgages are no excepton. LOME risks for seniors and
reverse mortgage lenders are real. They must first be
understood; then managed.
Mitgatng LOME Risks
Now that we have some understanding of LOME risks in
reverse mortgage originaton, let us look at some ways to
limit or eliminate it. The following ideas could help:
Become aware of LOME risks through educaton*; •
Keep the goal of enhancing seniors’ lives in mind at •
all tmes; it will help you think outside the box and
recognize hazards like LOME risks;
Know that all reverse mortgage payout optons • except
the line of credit opton carry significant LOME risks
because they could lead to risky accumulaton of
countable assets;
Build mult-disciplinary lending teams made up of •
reverse mortgage specialists, elder-law atorneys, and
financial planners; alternatvely, cultvate elder-law
atorneys 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” implicatons of gifing •
reverse mortgage cash;
Know your state-specific Medicaid rules as well as the •
federal rules;
Cultvate knowledgeable contacts within your state’s •
Medicaid bureaucracy, and pick their brains ofen on
changes to the rules;
Develop Reverse Mortgages and Medicaid 101 Seminars •
to educate seniors in your market; healthcare is a critcal
value; they will pay atenton to what you have to say;
beter stll, coordinate it with an offi cial of your city or
state Medicaid offi ce;
Bone up on the Deficit Reducton Act of 2005**; •
Because a senior’s long-term healthcare needs •
are unpredictable, they should know the adverse
consequences of accumulatng resources;
Although it is outside the scope of this artcle, knowing •
something about SSI (Supplemental Security Income)
program rules could enhance your understanding of
Medicaid.
Gosselin’s cauton
One of the naton’s leading resources in understanding
and mitgatng LOME risks is Massachusets’s elder-law
atorney and reverse mortgage expert, John T. Gosselin.
»
20
reversereview.com
During a conversaton for my column last year, he shared this
cauton, 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 situatons
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 atracted 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
retrement finance for our seniors, we must be on guard to
ensure that we do no harm, unintentonally or otherwise.
We must avoid Brenda McBride situatons.
About Atare Agbamu: Atare Agbamu
is the author of Think Reverse! (The
Mortgage Press, coming this fall) and
more than 100 artcles on reverse
mortgages. A reverse-mortgage
specialist in Minnesota and an adviser to
insttutons across the country, he writes
the Forward on Reverse column in The
Mortgage Press, since 2002. Atare can be reached by email
at atare@thinkreverse.com
Resources
*A two-part artcle 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 educaton.
**My 2005 conversaton (“DRA 2005: Medicaid Rule Change
and Reverse Mortgages”) with Stephen Moses, one of the
naton’s leading authorites 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 Natonal 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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August 2008
21
Te Foundations of Effective
Sales Strategy
Sales productvity rests on the ability to balance two
key dimensions: (a) personal strategic planning, and (b)
tme 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 executon of these critcal strategic steps is the
second part of the equaton. The effectve marriage of insight
and acton 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 systematc way to consistently monitor the cause and
effect relatonship between daily behavior, sales actvites
and measurable results. The absence of a “system” means
inevitably: (a) the dynamics of “motvaton” is lef to chance
and, more importantly, (b) a learning strategy and process is
not in place to ensure replicability of successful behaviors.
In essence, low productvity can be traced not only to
the deficiencies in strategy, or energy, i.e. executon, but also
because there is no systematc linkage between these two
critcal dimensions.
A comprehensive system prevents leaks of energy, ideas,
motvaton -- or all of the above. Brian Tracy talks about the
inherent diffi cultes 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 inspiratonal book in the morning or the
newspaper, whether you listen to the radio in your car or to a
learning audiocassete, whether you eat a salad at lunch or a
hamburger, everything counts. Everything adds up and either
helps you or hurts you.”
How do you create a system so everything adds up
positvely?
Even small, ordinary actons, when done consistently
over tme, can yield extraordinary results. It is imperatve
to develop a system to transform marketng and sales ideas
to sustainable, consistent and measurable actvity. The
later is critcal: too much of a good thing can be expensive,
counterproductve or both. For example, failure to carefully
quantfy results to tme and resources dedicated to
promotonal actvity will be diffi cult to correct, especially in a
tough market environment.
The productvity triangle, Skill Building, Personal
Branding and Outreach, is the key to establishing effectve
strategy. There are many actvites in each silo/area. The key
is to know your own strengths well, i.e. your specific learning
and motvatonal styles, so that you can apply them to those
actvites that “fit” your talent profile and make a positve
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 compettve
informaton, becoming an expert in Senior health issues,
Gerontology, or Creatve 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 applicaton in the pipeline. Mastery of basic loan issues
(e.g., appraisals, ttle reports, product features etc.) are all
part of the skill set component of the productvity triangle.
Familiarity with basic tools such as free property valuaton
website (e.g. zillow.com and it’s compettors), or learning
how to apply Web 2.0 tactcs for creatng a community base
are some concrete examples of strategic leverage.
Monte Rose
»
22
reversereview.com
Brand Management
Brand-building actvites need to flow organically
from the “market persona” you should be cultvatng. This,
in turn, depends on an awareness of your key markets (your
“brand community”) and the story/role you can effectvely
own. You need to develop a variety of “elevator speeches”
(aka your audio logo) that are appropriate for your different
market sub-segments and prospectng situatons. The idea is
not to compete with other producers but to own your niche
and be known for your unique strengths and capabilites.
Again, the most effectve brand-building strategies must flow
from an awareness of your talent profile. This ensures energy
conservaton and sustainability -- because you consistently
navigate and connect on the basis of your authentc sweet
spot. The more energy and motvaton you have, the more
likely you will be able to engage in effectve branding actons
over tme.
Tapping the Market
Extending one’s reach is probably the most critcal
component in today’s market conditon. Why? Because
of the “noise level” created by the current economic
environment, one can argue that most potental customers
are not as motvated in exploring Reverse solutons for their
financial needs. Therefore, prospectng as a foundatonal
actvity can be even more diffi cult.
Prospectng is 80% motvaton and 20% skill.
Closing the sale is 80% skill and 20% motvaton. There are
many “Kitchen Table masters” whose business is limited
by prospectng reluctance or ineffectve prospectng
approaches. They simply don’t get to enough prospects.
More ofen than not, however, the limitaton is the level
of motvaton and energy that is focused on prospectng,
rather than the lack of technique that becomes a
hindrance to sales productvity. The first step in fixing this
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 effectve
“countermeasures” and thus release the motvatonal energy
required for sustained prospectng.
Once the prospectng “brake” is released, certain
tactcal steps can then be more productvely implemented.
As an example, systematcally creatng a list of Senior
communites, Faith-based communites, Home Health Care
companies, Final Expense Professionals, Home Medical
Supply companies, senior publicatons, debt counselors, and
other aging-related professionals - and stcking to a schedule
of contactng and consistent follow-up - is one tactc for
effectve business development.
The two other parts of your “portolio”, Skills and
Brand, affect your outreach and prospectng actvites. Skill
builds the “content” of your value propositon, while effectve
personal brand management builds the “percepton” of your
value in your market.
This is how the “productvity triangle” serves
as the foundaton of a personal sales strategy. All three
are inter-related, and the “mix” will depend on your
specific experience/immersion in the reverse mortgage
field, market conditons, and your business approach. In
helping producers, one has to generate a discrete list of
implementable actons from each silo, and coach around
how to utlize each person’s unique talents and learning
style to maximize tracton and sustainability. The later
is key: consistent, thoughtul acton is always beter that
inconsistent, frantc bursts of actvity. Under diffi cult market
conditons, this specific ability for self-regulaton, focused
discipline, and endurance can be a prime differentator
between success and failure.
About Monte Rose: Monte Rose has
helped hundreds of seniors obtain a
reverse mortgage during the past 17
years. He is an accomplished speaker and
widely quoted industry expert, appearing
in financial publicatons and natonally
syndicated media. He was head of natonal
retail sales for Financial Freedom Senior
Funding Corporaton. Monte is a Certfied
Senior Advisor and a Certfied Strengths Coach with Gallup
University. For more informaton, call 800-516-0545 or email
info@monterose.biz.
HUD Foundation Specialists
Manufactured actured M Hou Housing sing
Troubleshooters rouble T
Foundat F ion
nspections, Upgrades I
& Repairs &
Engine E er
Certificatio ons o C
August 2008
23
Selling
the
Numbers
Afer a one month break, this artcle contnues a
mult-part series about the most important measures
of reverse mortgage success. Each artcle will walk
through a specific area of the business, focusing on the
key risks and opportunites 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 sofware.
Historically, this has been provided by wholesale lenders
as a complimentary benefit of the broker/correspondent
relatonship, but we’ve recently seen a number of new
vendors offering these tools as part of lead management or
customer relatonship management (CRM) sofware at a fee
to the originator.
This new actvity raises a few interestng questons.
First, why should you consider paying for sofware that you
currently receive for free from your lender? Second, what
should you look for in evaluatng these tools? Another
queston you might be asking by this point is why I’m writng
about sofware 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 originatng
loans has grown suffi ciently to atract 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 originatng 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
calculators include this functonality, but also include more
sophistcated lead tracking and follow-up tools to help
automate simple sales actvites and guide sales staff toward
more productve actvites.
Aside from the increased functonality (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 multple lenders without changing
the calculator tool your sales force is comfortable using, or
worse, having to use multple calculator tools. This benefit
cannot be over-stated as we see lenders dramatcally re-
pricing product LTVs and moving to a more fluid pricing
environment where originators may receive very different
economics on a loan from competng 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.
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 multple lender offerings within a single platorm, then
track those loans through to funding and sale. At this
point, brokers and correspondents will be able to offer their
John Lunde
»


Identfy the key steps in your sales
process and make sure the sofware
you’re considering captures critcal
informaton in a way that educates
the sales rep and manager.
24
reversereview.com
customers multple loan optons based on current LTV and
economic variables, ensuring contnuity for the sales staff,
benefit to the customer and value for the originator.
Evolving Capabilites
Once you’ve set your course as an independent
originator, a big decision stll remains in choosing which
vendor sofware to use. This artcle isn’t solely about
vendor sofware selecton (which would take a much longer
space to adequately cover) but we can hit the high points
relatvely quickly.
There are at least two major areas for functonal
improvements in reverse mortgage CRM systems:
automatng repettve processes and encouraging or
reminding users of desired actvites. Automaton is
relatvely straight-forward. For example, if you decide as
a company that it will help your conversion rates to send
a birthday card to all actve leads each year, this is easily
automated through your CRM if you’ve captured birth
date in your lead informaton 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 let ng computers do the repetton
(it’s what they’re best at!) and your people do the thinking.
The subject of reminders is a bit more involved since it
necessarily requires your sales reps to perform some acton.
Typically these steps involve judgment that only a human
can provide, but just as ofen 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 actve leads on their birthdays. Simply
cue up a reminder, let them check a box afer they call and
you’re all set.
The examples above are basic, but hopefully illustratve
of the power of expanded functonality in CRM sofware as
opposed to more elementary product pricing calculators
historically used in the reverse world.
Raw Material For Management
So why am I writng about sofware? The basic reason
is that the data you create and store in sofware tools like
your product calculator and more importantly, your CRM
tool, forms the foundaton for management decision-making
informaton. 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 - partcularly so when
you’ve predefined the important sales actvites you expect
from your reps. So how do you make best use of your
systems for management?
August 2008
25
First, identfy the key steps in your sales process and
make sure the sofware you’re considering captures critcal
informaton in a way that educates the sales rep and
manager. A good example is tracking a partcular sales
rep’s lead to applicaton conversion rato: a great statstc
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 suggestng that there’s a partcular right answer to
this typical, confusing situaton (that has the benefit of
happening all the tme in the real world), just that you
should be thinking about what your company’s answer to
this queston is (who gets credit) and whether your system
tracks it effectvely.
Secondly, recognize that there are many such pitalls
when it comes to evaluatng performance using data from
your CRM, LOS or any other system. A good system will
provide both the flexibility to track your processes the way
you’ve defined them as a company, but also let you use a
reverse (not forward) mortgage template as a startng point
so that it doesn’t cost you exorbitant amounts to custom fit
for your needs.
In Closing
The evoluton currently underway in sofware tools in
the reverse mortgage space is excitng to watch and holds
out the promise of an effi cient industry delivering products
to a mass market of senior customers that will depend on
these solutons going forward. While the sales functon is
certainly not the only beneficiary of new development, it is
without a doubt one of the most important as the face of the
industry to consumers.
Next month, we’ll discuss the sales metrics that prioritze
effectve sales managers’ tme in critcal areas like sales
territory sizing, set ng performance expectatons and
establishing compensaton plans with positve incentves.
Untl then, enjoy the summer!
About John Lunde: John Lunde is
President and founder of Reverse Market
Insight, the premier source for market
intelligence and analytcs services in
the reverse mortgage industry. RMI
clients include five of the top ten reverse
mortgage originators, both lender and
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.
lä| |\||\l|ï \l\\|\|| \|\|| |ll¡
Ѯe Industrv Standard is not just a slogan.
Six of the top 10 reverse mortgage originators
use Ibis Soѫware for their websites, retail
and wholesale businesses.
Ѯose lenders are using:
IěĢĬ RMO:
Loan origination modules include CRM,
Ouick Ouote, Proposal, Application,
Underwriting, Documents, Closing, Pipeline
Reports, and Cost Templates. Plus Broker
and Correspondent Management. Full state
specifc application and closing packages can
be stored, printed, and emailed.
IěĢĬ QĮĢĜĤ QĮĨĭĞ:
Bilingual consumer calculators,
alreadv in use at:
- www.rmaarp.com -
- www.wellsrm.com -
and manv other websites
Ibis also provides:
IěĢĬ RMA:
A complete counseling package for
HUD-Approved reverse counselors.
For more information, visit
www.ReverseMortgageHomePage.com
Or call (800) 566-5077
26
reversereview.com
My wife ofen asks me, “Did you hear what I said?” I always say, “Of course.”
Admitedly, 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 litle more
atenton, you too can become a beter listener and a beter senior advisor.
Working with seniors requires you to be a good listener. This skill is diffi cult 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 relatonships and
working with seniors you must learn to become a good listener.
In reverse mortgage communicatons, 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 relatonship
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 tmes of which they
have fond memories and atachments. When you listen to your senior, you must be
Are You Listening to Me?
Sam Collins
August 2008
27
perceptve in order to build your rapport and relatonship,
which in turn builds the trust of your senior client.
It doesn’t take a rocket scientst to call a senior, take the
applicaton, and then leave. However, if you failed to listen
and communicate with your senior perceptvely, you become
nothing more than an order taker. Your goal is to leave them
with a lastng impression of yourself and have them think of
you as the person who listened and had empathy for their
partcular situaton. Your perceptve listening will set you
apart from all others.
In today’s fast paced world, listening is seldom easy.
Sometmes we must be selectve in our listening, just to
survive the day. We ofen erect survival barriers, including
that of others talking. So when we are placed in a set ng
where we are counted on to listen, ofen we fail the listening
test. However, once we understand the barriers and how to
deal them, we can become beter listeners for others and
also understand while others fail to listen to us.
Have you ever been in a situaton where you were in a
conversaton, only to say something to the other person and
have them look at you like you were a litle 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 perceptve
listening test.
We know in order to become beter listeners, we must
overcome the barriers. Here are the five most important
barriers that affect our listening:
#1 Preconceived notons. Yes, we all have them, and ofen
express them to others without even knowing. Many of
these preconceived notons are only that, notons. These
notons can be biased and allow us to block out other
messages that allow new opinions and informaton to seep
into our minds. Ofen 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
meetngs 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 notons, we deprive
ourselves of the opportunity to learn a world of knowledge.
What can you do about preconceived notons? 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. Ofen we do not allow
ourselves enough tme to invest in get ng in touch with our
senior prospects. We are ofen in a hurry because we have
too many things to do and so litle tme to get them all done.
Time is our most valuable asset. When we take tme to listen
to, we are projectng that we really care, because we are
sharing our most valuable asset. Giving up your tme to listen
to your senior clients shows you value their relatonship 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 litle 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 positon
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 perceptvely 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 setle
down and listen to the problems of others. We must learn to
control our stress and allow ourselves to become involved in
productve dialog with our senior clients. Ofen 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 perceptvely,
because the speed of our mind is going faster. Yes, your
brain has tme 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 effectve listener here are some techniques
you can use:
First; clear your mind of all negatve thoughts.
Drop preconceived notons 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
communicatons 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 positon many of your compettors
will envy. Yes, you will be the one who captures
your business and some of theirs.
»
28
reversereview.com
Fourth; look for the meaning behind what is being
said. If listening to two borrowers discussing their
financial situaton, 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.
Fifh; do not interrupt. Interruptng is a cardinal
sin and most ofen may not be forgiven.
Interruptng is considered by seniors to be rude
and disrespectul. Neither of these is good for
you, since most tmes, you only have one chance
to make an impression. You must work hard and
be conscious of the temptaton to interrupt. This
is one of the most diffi cult techniques to perfect.
Why, because we want to make our opinions
known, rather than listen perceptvely 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 questoner. You must be
prepared to ask questons to get to the botom of
what it is that will help your clients. If you don’t
know the questons to ask, take tme before your
next appointment to have them writen down, and
don’t forget to ask them. You may even say, “That
sounds interestng, can you tell me more?” When
you ask questons it shows you are genuinely
interested in the other person. Remember; don’t
forget to listen to the answers to your questons.
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 porton 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 trustng relatonship even further.
Eighth; make sure our clients have our undivided
atenton. We must block out anything that might
distract us from listening atentvely. 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
informaton we discuss is very important to their
future and I do not want them to miss anything
vital to their situaton. Most agree and respect
you even more. This also elevates your status and
value.
Ninth; use facial expressions and body movements
that project positve thoughts into the minds of
your senior clients. A smile or look of affi rmaton
that you understand is important. A blank look
or smile at the wrong tme 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 emotonal
words. Effectve listeners respond afer
contemplaton and react in a positve non-
emotonal manner. Good listeners avoid being
trapped by emotonal tones and innuendoes.
Listening to the entre story will allow you to reach
a common ground and react positvely.
Good listening skills are something you must have
in order to be effectve in your communicatons. Good
listening is learned and requires you to be willing to break
through the barrier and use effectve techniques. Being a
good listener is easier said than done. I have to work on my
perceptve listening on a daily basis, and admitedly, I am
get ng beter, but I am stll 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 artcle 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 partcular situaton 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 positon you to become
the best senior advisor in your marketplace and bring you
enormous satsfacton of a job well done.
About Sam Collins: Sam Collins is
the President of Sam Collins Reverse
Marketng, LLC and Founder of REMALO,
the Reverse Mortgage Associaton for Loan
Offi cers. REMALO is a web based Natonal
sales, marketng, training, and full service
center, created exclusively for Reverse
Mortgage Loan Offi cers, Correspondents,
Branch Managers, and key executves, and
brokers. www.remalo.org
August 2008
29
1st Reverse Financial Services, LLC
410 Quail Ridge Drive
Westmont, Illinois 60559
(877) 574 - 1000
info@1streverse.com
America’s Recommended Mailers, Inc.
1680 S. Hwy 121, Bldg. B
Lewisville, TX 75067
(800) 992 - 2722
armleads.com
10801 Thornmint Rd
Suite 250
San Diego, CA 92127
(877) 229 - 7799
appraiserlof.com
informaton@appraiserlof.com
Celink
Reverse Mortgage Servicer
3900 Capital City Blvd
Lansing, MI 48906
www.celink.com
Monte Rose
17100 Gillete Ave
Irvine, CA 92614
(800) 516 - 0545
monterose.biz
info@monterose.biz
Reverse Mortgage Associaton for Loan
Offi cers
22 Polly Drummond Hill Rd.
Newark, DE 19711
(877) 2NARMLO (877) 262 - 7656
remalo.org
Valerie VanBooven
Next Generaton Financial Services
Reverse Mortgage Naton
3301 Boston Street
Baltmore, MD 21224
(888) 973 - 8377
ngfs.net
OnTheLevel
2982 Ora Avo Terrace
Vista, CA 92084
(800) 909 - 1110
onthelevel@mac.com
John Lunde
Reverse Market Insight, Inc.
Aliso Viejo, CA
(949) 429 - 0452
rminsight.net
info@rminsight.net
Reverse Vision
3310 Pollock Place
Raleigh, NC 27607
(919) 834 - 0070
reversevision.com
info@reversevision.com
Atare E. Agbamu
Think Reverse!
www.thinkreverse.com
atare@thinkreverse.com
Directory
30
reversereview.com
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 writen
bill. Everyone seems to have an opinion and everyone has their
own interpretaton of the 300 page compilaton of contradictons.
My only opinion is that untl I see the mortgagee leters, it is
business as usual. Therefore, my focus this month is on marketng
and educaton 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:
Running out of money. 1.
Losing their ability to maintain their independence and choice. 2.
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 solutons
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 informaton 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 protecton 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 sit ng
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
modificaton, 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 diffi cult to find.
Families may end up driving long distances to visit their loved ones.
Traditonally, Medicaid resources for in-home care are extremely
limited, which means most seniors who apply for Medicaid end
up in a nursing home type set ng. The Deficit Reducton Act 2005
makes qualifying for Medicaid even more diffi cult for most families.
Planning ahead is really the only viable opton for families today.
VA Aid and Atendance Pension Benefit: The Veterans
Administraton has established a pension program whereby your
purchase of personal care and atendant 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 actve duty with one day beginning or ending
during a period of war, and you are in need of assistance at HOME
due to your disabilites, 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 disabilites, 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 tmes has
Medicare been over-hauled since 1965? NEVER. It was not
designed to pay for care related to diseases or conditons 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 rehabilitatve stays in a rehab or
long-term care facility. Although Medicare Part D was added in
2004/2005 to help with the costs of prescripton drugs, Medicare
stll does not pay for long-term care.
About Valerie VanBooven: Valerie
VanBooven RN BSN is a professional speaker
and the author of “The Senior Soluton:
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
natonal marketng director for Next
Generaton Financial Services, a Division of
1st Mariner Bank. Valerie VanBooven can be
reached via email at valerie@theltcexpert.com.
The Last Word
NewOpportunitiesInReverseMortgageLending
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