For the last few days, I have received so many inquiries about the changes to the HECM fixed rate product that choosing a topic for this article required no thought on my part whatsoever - it was obvious.
Several lenders have changed their programs for the fixed rate HECM in some substantial ways. First is the "no service fee set aside" provision. This concept has always been a challenge for the reverse mortgage originator to explain (c'mon, we can admit it) and an equal challenge for our clients to grasp. Second is the reduced or eliminated origination fee. These two combined can provide a substantial increased benefit to our seniors, there is no doubt about that. I suspect that some of your prospects who were on the fence in deciding if a reverse mortgage was the right option, will see this product in a new light. The high closing costs and service fee set aside were always identified as obstacles, and these objections have now been met head on.
The questions I received were more about the best method to get the word out about these new enhancements to the program. Before I go into that, however, I want to remind our readers that we must always put the best interest of the senior client first. Be careful not to "push" this new and improved fixed rate program simply because of the increased benefit. The borrower must in most cases still take all available funds at the time of closing, so be sure you are still offering the proper advice. Perhaps the adjustable rate with the line of credit option is the better choice for a particular borrower. Let's not forget our responsibilities in our excitement over the recent improvements in the fixed rate HECM!
I made a list of professionals and organizations I wanted to contact right away. First on my list were the accountants in my referral network. In general, accountants would love to be our ally in this program since there are so many benefits to the borrower. But let's face it; they are the true number crunchers. Go back to them right away with some education on these new program features and you'll see a renewed interest on their part. Next, the financial planners I know. I accomplished this communication using 2 strategies: my website and a brief email newsletter that refers back to my website (get it?). From there, I contacted all prospects who were short funds to close under the previous calculations. For some, even a small increase in available funds can make a difference. One Reverse Mortgage Success member told me yesterday he was including this message in his advertising for his upcoming seminars (of course I asked him if I could share this terrific strategy with all of you). Are any past clients now better candidates for a HECM to HECM refinance?
Bottom line is, we have a real opportunity to go out with some positive news about the reverse mortgage program. We have been looking for a way to overcome some of the negative press, and here we have it. Why not a press release or an article in your local senior publication? Contact me at
Sue Haviland is a reverse mortgage consultant in Baltimore and the founder of Reverse Mortgage Success, a leader in the training and education for originators around the country in the rapidly growing reverse mortgage arena. Ms. Haviland has worked in the lending industry since 1981. She has been originating reverse mortgages for the last six years and still originates loans every day. She has helped hundreds of families all over the country in the last several years. Sue also shares her knowledge of this market in presentations before the Women's Council of Realtors, Mortgage Bankers Association, National Association of Professional Mortgage Women, and SRES - Senior Real Estate Specialists, Brian Sacks' Insider Seminars, as well as the public. Sue is a Certified Senior Advisor and is active in many professional organizations. Sign up for her free seven-part mini-course at
