Reverse Mortgage
VOLUME 4.3, SUMMER 2001
A D V I S O R
Half Year Report: Reverse Mortgage
Production Picking Up By Darryl Hicks
F
ueled by NRMLA’s national consumer education campaign, the
Internet, and better marketing, reverse mortgage production has
increased through the first six months of 2001 and is on pace to
http://www.reversemortgage.org
exceed the previous origination record set in 1999.
After posting lower-then-expected production numbers last year —
the Federal Housing Administration insured just 6,664 Home Equity
Conversion Mortgages (HECMs) in FY 2000, compared to 7,921 loans in
FY 1999 — roughly a dozen lenders interviewed by Reverse Mortgage Advisor
say business is once again picking up.
Between January and May 2001, Fannie Mae, Washington, DC, purchased
3,488 reverse mortgages, according to Tom Atwell, senior products manager.
HALF YEAR REPORT, continued on page 8
BORROWER PROFILE
A quarterly publication of the National Reverse Mortgage Lenders Association
Patrick Dawson
B E RW Y N , I L L I N O I S
P
atrick Dawson, 67, had always dreamed
of taking a riverboat cruise on the
Amazon River. This past December,
his dream finally came true, thanks, in part, to
Patrick Dawson
the reverse
mortgage he got in January 1997. INSIDE THIS ISSUE
Mr. Dawson retired six years ago,
at age 61, after teaching industrial Message from the President .......2
arts at Lane Technical High School
for 20 years. Before that, he was a NRMLA 2001 Annual Meeting....3
real estate appraiser and ironworker.
“I helped build bridges and high NRMLA News .............................3
rises,” he said.
Once retired, Mr. Dawson quickly Attracting Referrals from
discovered the modest $1,000-a- Financial Planners ....................4
month pension he received wasn’t
going to be easy to live on. Because Borrower Profile .........................6
he retired at an early age, Mr. Dawson
wasn’t yet receiving Social Security New NRMLA Members...............7
ROGERS, continued on page 11
A Message from the President on the Web site and generate press coverage to let
the public know that the information is available.
Our Code of Conduct and Best Practices guidelines
Obtaining the Five are designed to enhance the degree of professionalism
Essential Ingredients To exhibited by our members and give consumers the
assurance that NRMLA member lenders who are listed
Make Our Industry Grow on our Web site can be relied upon to be honest and
By Peter Bell knowledgeable people, who will treat them with
dignity and respect.
A
t a recent conference of
If we had a product that is simpler to explain, the
reverse mortgage
challenge of building broader acceptance would be
correspondents, I had
far less daunting. The next two essential ingredients,
an opportunity to lay out
a responsive regulatory environment and a supportive
five essential ingredients to
legislative environment could help us achieve our
make our reverse mortgage
simplification objectives. In the meantime, to try to
industry grow.
simplify the process, we must work at developing
They include: broader
common explanations and promoting broader under-
consumer acceptance of our
standing of the reverse mortgage process by working
Peter Bell product; a product that is sim-
with the media to generate more positive coverage.
pler to explain; a responsive
Several members are working collectively to simplify
regulatory environment; a supportive legislative envi-
the paperwork and reduce the huge number of docu-
ronment; and a knowledgeable counseling network.
ments that a client must review and sign to get a
The challenge before us then is how do we get
there — what must be done to obtain these five PRESIDENT, continued on page 9
essential ingredients?
To achieve each, it is useful to look at the situation
The National Reverse Mortgage Lenders
from the other person’s perspective, to step out of our
Association is a national trade association that
own shoes and into theirs. If you try to assess what’s provides education, advocacy, and referral ser-
needed from the opposite perspective from your own, vices to firms that are involved in the reverse
you will begin to see what needs to be done. mortgage industry.
If we were to look at broader acceptance from the
Chairman
consumer perspective, we would recognize that Jim Mahoney
FINANCIAL FREEDOM SENIOR FUNDING CORP.
prospective customers want accurate information that IRVINE, CA
is readily available, real-life illustrative examples of how
reverse mortgages are being used, guidance on how to President
Peter Bell
find a lender, assurances that the lender they might DWORBELL, INC., WASHINGTON, DC
work with is trustworthy and that there is someone to
Director of Communications
turn to for assistance in the event that a problem arises. Glenn Petherick
NRMLA has been working to address these con-
sumer concerns in several ways. Our Web site and Reverse Mortgage Advisor
consumer guides provide the largest amount of Editor:
Darryl Hicks
detailed consumer-friendly information readily avail-
able anywhere. Our press outreach and consumer
Office
education efforts bolster the information presented
1625 Massachusetts Avenue, NW, Suite 601
Washington, DC 20036-2244
A reverse mortgage is a unique loan that enables senior Tel: 202-939-1760, Fax: 202-265-4435
Web site: http://www.reversemortgage.org
homeowners (62+) to convert part of the equity in their
homes into tax-free income without having to sell the home,
Reverse Mortgage Advisor is published quarterly as an information
give up title, or take on a new monthly mortgage payment. service for NRMLA members. The subscription price is included
in membership dues.
2 Reverse Mortgage Advisor Summer 2001
NRMLA BOARD OF DIRECTORS NRMLA Picks New Orleans
Jim Mahoney
for Annual Meeting
CHAIRMAN
Financial Freedom Senior Funding Corp.
I
Irvine, CA f you want to learn how to grow your reverse mortgage
business - and have fun at the same time — consider
Roger Reynolds
VICE CHAIRMAN making the investment to attend NRMLA’s 2001 Annual
Wells Fargo Home Mortgage, Inc.
Hemet, CA Meeting, September 20-22, in New Orleans, LA.
The Annual Meeting is being held at Le Meridien
Joe Morris
VICE CHAIRMAN Hotel, located just one block from New Orleans’ famed
Financial Freedom Senior Funding Corp.
Atlanta, GA
French Quarter where you’ll find some of the finest cuisine
and live music anywhere in the country.
George Q. Conover
TREASURER
In addition to fun and relaxation, NRMLA’s Annual Meeting will
Financial Freedom Senior Funding Corp. give you the perfect opportunity to network with the brightest minds in the
Woodstock, MD
reverse mortgage business, and to educate yourself on what you can do to
Sarah Fiske Hulbert
SECRETARY
generate more loans.
Seattle Mortgage Company NRMLA has put together an informative agenda that will provide
Seattle, WA
instruction on the following topics:
–––––
Megan Akers
Spending Your Advertising/Marketing Dollars Wisely.
Bay Docs
Novato, CA Political and Regulatory Issues Impacting the Reverse
Mortgage Business;
Thomas Atwell
Fannie Mae Underwriting Roundtable: Identifying Common Challenges;
Washington, DC
Communicating Affectively With Seniors;
James Cory
Seattle Mortgage Company Attracting Referrals From Financial Planners & Elder Law Attorneys;
Seattle, WA
Cultivating Relationships With the News Media; and other issues.
Patrick J. McEnerney
Alliance Mortgage Company
Jacksonville, FL For companies that don’t originate reverse mortgages, but would like
to learn more about the fundamentals of the business, NRMLA is hosting a
Sian Owen
Canadian Home Income Plan special pre-conference workshop on September 20 that will provide basic
Toronto, Canada
instruction on originating, servicing, and marketing reverse mortgages.
Dennis Pigg, Sr. To learn more about the conference, and how to register, contact
Safeway Mortgage, Inc.
Smyrna, GA Darryl Hicks, 202-939-1784, e-mail dhicks@dworbell.com, or visit NRMLA’s
Web site at www.reversemortgage.org. RMA
Mary Ressetar
Alliance Mortgage Company
Schaumburg, IL
Kevin Silo
Hartford Life Insurance Company
Simsbury, CT NRMLA News
Robert Wyatt
West Coast Guaranty Bank, N.A. PROPOSED HECM RULE ISSUED
Sarasota, FL The U.S. Department of Housing and Urban Development (HUD), on
EX-OFFICIO June 5, issued proposed regulations, a first step in amending the federal
Jeffrey S. Taylor
Wells Fargo Home Mortgage, Inc.. Home Equity Conversion Mortgage (HECM) program to comply with legis-
Greensboro, NC lation passed by Congress late last year, that would eventually make it
easier, and less costly, for seniors to refinance existing HECMs.
Peter H. Bell
PRESIDENT
The proposed rule was developed in response to housing legislation
Dworbell, Inc. signed into law by President Clinton shortly before leaving office, and
Washington, DC
implements the consumer protection aspects of the refinancing provisions.
NRMLA NEWS, continued on page 10
Reverse Mortgage Advisor Summer 2001 3
switch their payment option to the line of credit,
Attracting Referrals which they only have to use in emergency situa-
From Financial Planners tions,” she said.
By Darryl Hicks This isn’t the first time that Calamia has attracted
referrals from financial planners. “I’ve been working
with them ever since I first entered the reverse mort-
D
uring the past two months, Alison Calamia, a gage business in 1993,” she said. “I usually get six
reverse mortgage specialist with Standard leads a year and close a handful of loans.”
Mortgage, New Orleans, LA, has been getting She has cultivated relationships with American
a lot of phone calls from financial planners. Express Financial Services, John Hancock Financial
Most recently, Calamia spoke with Services, and several other New
a financial planner whose client — an Orleans firms.
elderly woman — has seen the value Glenn Balsamo, a local financial
MORE SENIORS ARE
of her stock portfolio fall dramatically. planner with Don Scully & Associates,
The financial planner wanted to know Metairie, LA, said he’s known about
STARTING TO FEEL THE
if a reverse mortgage could help solve reverse mortgages for about eight
the woman’s financial problems. AFFECTS OF THE STOCK years now, though he’s been a
“I’ve been getting a lot of phone financial planner for 26.
calls like that lately,” said Calamia. MARKET COLLAPSE, AND “A lot of my clients are in their
More seniors are starting to feel mid-30s, but I provide information on
the affects of the stock market col- HAVE BEGUN HIRING reverse mortgages regardless, so that
lapse, and have begun hiring financial when they reach their retirement
planners to figure out how they can FINANCIAL PLANNERS TO years they’ll know the product
remain financially stable until the exists,” added Balsamo, who has
market recovers. Getting a reverse FIGURE OUT HOW THEY referred clients to Calamia on past
mortgage, according to Calamia, is occasions.
one option that financial planners are CAN REMAIN FINANCIALLY Balsamo said most of his clients
recommending. who express an interest in reverse
“The stock market is so bad that STABLE UNTIL THE mortgages are young adults with an
seniors are looking for new ways to elderly parent.
MARKET RECOVERS. “They have a needy parent who
supplement their monthly income,”
added Calamia. “In June, I spoke with may benefit from getting a reverse
GETTING A REVERSE
three financial planners with similar mortgage, so they want to find out
clients and ended up closing two more about it,” he said.
MORTGAGE, ACCORDING
loans.”
Before advising their clients that a
TO CALAMIA, IS ONE
EXPLAINING REVERSE MORTGAGES TO
reverse mortgage is right for them, FINANCIAL PLANNERS
most financial planners will first ask OPTION THAT FINANCIAL Like Calamia, Tom Scabareti,
Calamia to “run the numbers” so they marketing director at Financial
can find out how much money the PLANNERS ARE Freedom Senior Funding
senior will get. Corporation, Irvine, CA, is a strong
In cases where the borrower is RECOMMENDING. proponent of working closely with
counseled to get a reverse mortgage, financial planners, although he
Calamia advises her new customers to admits that some advisers are initial-
take the loan proceeds in the form of ly resistant.
fixed monthly payments. Once the stock market “They say ‘that’s nice’ but my typical client is
recovers, and the borrower can once again start col- much younger and would therefore not qualify for a
lecting sufficient income off their stocks, “they can reverse mortgage,” Scabareti added. “Our message
4 Reverse Mortgage Advisor Summer 2001
to them is that your 40-60 year-old clients are in a retirement frame of
mind. They’re beginning to think about their future and what options are avail-
able to provide for their financial security.” TO LEARN MORE
Scabareti clarifies to financial planners that they may have potential
clients, aged 60-70, who already are in a retirement mode, and need to find a
new source of income.
ABOUT FINANCIAL PLANNERS,
On occasions that he has had the opportunity to meet with financial plan-
ners, Scabareti explains that reverse mortgages are a useful product for both
CONSULT THE FOLLOWING
affluent and lower, middle-income people. Wealthier homeowners can use a
reverse mortgage to reduce their future estate taxes, to purchase a life insur- INDUSTRY ORGANIZATIONS:
ance policy that provides tax free money, or to pay for a grandchild’s college
education, noted Scabareti.
On the other hand, Calamia pointed out that many wealthy homeowners
who consult financial planners are not satisfied with the money available to
AMERICAN BAR
them through a reverse mortgage because they live in a home that exceeds
ASSOCIATION
the maximum loan limit established by Fannie Mae or FHA.
(www.abanet.org)
In that case, an option would be to get a “jumbo” reverse mortgage
through Financial Freedom, or one of its loan correspondents.
AMERICAN INSTITUTE OF
TYPES OF FINANCIAL PLANNERS
CERTIFIED PUBLIC
There are two types of financial planners: commission-based and/or
ACCOUNTANTS,
fee-based.
PERSONAL FINANCIAL
Many financial planners earn all, or a significant part of their compensation,
PLANNING DIVISION
from commissions generated from the sale of mutual funds, insurance, and
other financial products. Fee-based planners, on the other hand, are compen- (www.aicpa.org)
sated strictly from a fee for service, established in advance with the client.
Both Scabareti and Calamia said it doesn’t really matter which type of
financial planner a lender works with. SOCIETY OF FINANCIAL
“I don’t care how the financial planner gets paid — that’s negotiated SERVICE PROFESSIONALS
between them and the senior client,” noted Calamia. (www.financialpro.org)
CEMENTING THE RELATIONSHIP
Lenders that are interested in establishing relationships with local financial THE FINANCIAL
planners should first consult the Yellow Pages, according to Calamia. “Let PLANNING ASSOCIATION
your fingers do the walking,” she added. “Offer to come into their office and (www.fpanet.org)
provide training on reverse mortgages — most will jump at the chance.”
Michael Brown, of Carteret Mortgage Corp., Virginia Beach, VA, has
developed relationships through his membership to the local chapter of the NATIONAL ASSOCIATION
Certified Financial Planners Association. “There’s a lot of ways to reach out to OF PERSONAL
financial planners,” said Brown. “You can buy lists, do direct mail, or advertise FINANCIAL ADVISORS
in association magazines.” (www.napfa.org)
Before accepting a referral from a financial planner, Calamia makes sure
the advisor is reputable. “I make sure they’re on the up and up,” she said.
“I find out how knowledgeable they are about reverse mortgages, and I ask COLLEGE OF
what they’re advising the customer to do with their money. FINANCIAL PLANNING
Calamia also contacts the client, so that “I can make sure they understand
(www.fp.edu)
fully what they’re getting into” when they contact me about getting a reverse
mortgage. RMA
Reverse Mortgage Advisor Summer 2001 5
Hayes thought about mortgaging her home to
BORROWER PROFILE
pay for a caregiver but, in the end, chose a reverse
Katrine Denese mortgage. “I could have gotten a lot more money
JACKSONVILLE, FLORIDA using a home equity loan but the interest rate was
higher and there’s a monthly payment to make,”
K
atrine Denese, 80, suffers from paranoid she added.
schizophrenia and Parkinson’s Disease. Yet Acting as Power of Attorney for her mother,
the last thing her kids want is to have her Hayes obtained a $33,000 FHA Home Equity
placed in a nursing home. Conversion Mortgage with a line of
“My mother’s home is her security credit from Financial Freedom Senior
— she loves it there,” said Janet Hayes, USING THE PROCEEDS
Funding Corporation, Irvine, CA.
one of four children raised by Denese. FROM THE REVERSE
“What sold me on the reverse
Ms. Hayes acts as Power of Attorney M O RT G AG E , H AY E S mortgage was that even after my
for her mother. H A S H I R E D T WO mother exhausts all the money, she
Though still able to function CAREGIVERS. “ONE still can stay in her home for as long
independently at times, Ms. Denise, P E R S O N AC T UA L LY as she needs to,” added Hayes.
nonetheless, requires round-the-clock Using the proceeds from the
LIVES WITH MY MOM
care because of dementia. reverse mortgage, Hayes has hired
A N D TA K E S C A R E O F
Using money from her mother’s two caregivers. “One person actually
A L L H E R N E E D S, ”
pension and Social Security, Hayes has lives with my mom and takes care of
H AY E S S A I D.
hired caregivers to take care of her all her needs,” Hayes said. “A second
“A SECOND PERSON
mother. “They help with everything — person comes in once a week to
COMES IN ONCE A
cooking, bathing, cleaning — you relieve the other, who spends a few
name it,” she said. WEEK TO RELIEVE
hours shopping for groceries and
But that level of care requires THE OTHER, WHO
handling other errands.”
money — lots of it. Last year, it SPENDS A FEW HOURS Paying her mother’s prescription
became clear that Denese’s pension SHOPPING FOR drug bill isn’t as much a chore as it
and Social Security were no longer GROCERIES AND once was, either. “My mother’s pre-
going to be sufficient to cover the HANDLING OTHER scription drug bill runs about $330 a
caregivers’ costs. month, and that’s with free samples,”
ERRANDS.”
Hayes initially sought financial said Hayes, “so the reverse mortgage
assistance through the federal govern- helped out there.”
ment but quickly hit a dead-end. Hayes recommends the reverse mortgage to any
“I didn’t get very far with the government,” Hayes adult child who has to care for their parent but doesn’t
added. “They wanted to pick the caregiver, and pro- have the financial ability to do so.
vide coverage only for eight hours a day. My mom, “It has been a life saver for my mother,” she
however, needs care 24-7.” added. RMA
6 Reverse Mortgage Advisor Summer 2001
New Members of NRMLA
National Reverse Mortgage Lenders Association welcomes the following new members:
Ancient City Mortgage mortgages, Peoples Choice offers first-time home-
Based in St. Augustine, Fla., Ancient City buyer programs, home equity loans, fixed-rate,
Mortgage originates reverse mortgages — mostly adjustable-rate and balloon mortgages. For more
Home Equity Conversion Mortgages (HECMs) — information, contact Gery Connor, 800-249-4909,
and other government-insured loan products email peoplestm5@aol.com.
(both FHA and VA). For more information, Web site: www.peoplestrustmortgage.com.
contact John Wood, 904-826-0096,
e-mail acmjmw@bellsouth.net. RealNet Financial
Web site: www.ancientcitymortgage.com. Based 80 miles east of Dallas in Tyler, Texas,
RealNet Financial has been a full service mortgage
Carteret Mortgage Corporation banker for two years. The company added reverse
Headquartered in Centreville, Va., Carteret mortgages to its product line last year. A subsidiary
Mortgage Corporation is a national lender that of Reality Mortgage, Jackson, Miss., RealNet origi-
originates a wide array of mortgage loans includ- nates mostly HECM loans. For more information,
ing Fannie Mae, FHA, nonconforming, and more contact Brad Harvey, 903-561-6558,
recently reverse mortgages. The staff of the email bharvey@realnetfinancial.com.
Virginia Beach office, located in Virginia’s
Tidewater area, is solely dedicated to servicing all Tara Mortgage Corporation
of Carteret’s reverse mortgages. The company Based in Pensacola, Fla., Tara Mortgage
originates reverse mortgages in every state but Corporation has been originating conforming loans
Hawaii. For more information, contact Michael and U.S. Department of Agriculture Rural Housing
Brown, 757-438-3838, email loanman757@aol.com. loans, for more than eight years. Tara Mortgage
Web site: www.reversemortgageinfo.net. Corporation added reverse mortgages to its product
line 18 months ago, after receiving inquires from
McGowin-King Mortgage past clients about the product. For more
Based in Birmingham, Ala., McGowin-King information, contact Randy Odom, 850-434-0010,
Mortgage has been originating residential mort- email randy@taramortgage.com.
gages since May 1998. Reverse mortgages are a
recent addition to the services McGowin-King Third Community Mortgage
offers — the firm’s first reverse mortgage was Based in Cleveland, Ohio, Third Community
closed this past spring. McGowin-King currently Mortgage has been in the mortgage business for
offers HECM and Fannie Mae Home Keeper® more than 10 years, originating loans mostly in
loans. For more information, contact Jim King, Ohio and Florida. In addition to providing HECM
265-879-7775, email mkmtg@bellsouth.net. loans, Third Community offers first-time homebuyer
loans, government-insured first mortgages and
People’s Choice Mortgage FHA-insured 203(k) rehabilitation loans. For more
Headquartered in Erlanger, Ky., Peoples Choice information, contact C.A. Rubin, 216-518-9992,
Mortgage offers mortgages to consumers in email adamrubin@3mortgage.com.
Minnesota, Ohio, Indiana, Michigan, Wisconsin, Web site:www.mortgagefederal.com.
Kentucky and Colorado. In addition to reverse
Reverse Mortgage Advisor Summer 2001 7
HALF YEAR REPORT, continued from page 1
Fannie Mae, he added, is on pace to purchase 20 stream of leads — mostly adult children — from
percent more loans this year compared to the record his company’s listing on NRMLA’s Web site.
8,369 loans it bought in 1999. “They find NRMLA through a search engine, click
“I’m not hearing any bleak news,” noted Atwell. on the lender locator feature on the Web site, and
“Every lender I’ve spoken with says their production end up contacting me,” said Wyatt, who’s currently
is up for the year.” helping two women — one located in California, the
Additional data supplied by the U.S. Department of other in Ohio — obtain a reverse mortgage for their
Housing and Urban Development shows that FHA 90-year-old grandmother in Florida.
insured 5,092 HECMs through the first eight months of “I’m finding that more adult children are very
FY 2001 (Oct. 1, 2000-May 30, 2001), up from 4,951 concerned about their parent’s financial well-
HECMs insured through the same period in FY 2000. being, and believe the reverse mortgage can help
Wells Fargo Home Mortgage, Hemet, CA, said it’s provide some stability,” he added.
on track to close 1,900 reverse mortgages by year- Added Pulsipher: “I’m getting leads from the
end, a whopping 58 percent increase over 2000 NRMLA site too. If I close one or two loans a year
production figures. that way, it more than justifies paying my annual
“After all these years, the reverse mortgage is dues to the Association.”
starting to get the public attention — and recognition Yet another lender, Mark McVearry, of Academy
— it deserves,” said Jeff Moulton, marketing director Mortgage LLC, Baltimore, MD, said he expects to
for Wells Fargo’s reverse mortgage division. close about 60 loans this year, a modest 15 percent
Financial Freedom Senior Funding Corporation, increase over 2000. “Business is good,” he added.
Irvine, CA, and Seattle Mortgage Company, Seattle, “I’m think there’s more consumer acceptance of
WA, declined to reveal their year-to-date production the reverse mortgage, which is translating into
numbers. Nonetheless, both companies say production more closed loans.”
is up substantially compared to last year in both
their wholesale and retail operations. NRMLA CONSUMER EDUCATION CAMPAIGN
Positive press coverage generated by NRMLA
REASONS WHY PRODUCTION HAS INCREASED through its national consumer education campaign
Lenders say they’re closing more loans for a variety has helped bolster consumer awareness, and
of reasons. Some have hired more sales staff to mar- acceptance, of reverse mortgages, according to
ket reverse mortgages in their region, while others lenders interviewed by RMA.
are obtaining more leads from loan brokers. “I think NRMLA has done a terrific job generating
“We’re employing more sales staff who can work the positive press coverage we need to make this
out of their home,” said W.L. Pulsipher, of American industry grow,” added Wells Fargo’s Moulton.
Reverse Mortgage, Ocala, FL. “It allows us to expand NRMLA President Peter Bell has conducted
our reach throughout the state.” dozens of press interviews with local and national
Steve Bradshaw, of Standard Mortgage media over the past several months, touting the
Corporation, a wholesale mortgage lender based in benefits of reverse mortgages. The Association has
New Orleans, LA, has had similar success structuring also published two informational booklets — the
correspondent relationships with local banks that NRMLA Consumer Guide to Reverse Mortgages and
have large senior clienteles. Using Reverse Mortgages For Health Care — that are
Older Americans, Bradshaw added, are “more available to seniors free of charge.
comfortable” doing business with a bank, as opposed Since December, NRMLA has distributed more
to a mortgage company, because a bank “suggests than 5,300 copies of the NRMLA Consumer Guide to
stability and fairness.” Reverse Mortgages, and 700 copies of Using Reverse
Rob Wyatt, of West Coast Guaranty Bank, N.A., Mortgages For Health Care, which the Association
Fort Myers, FL, noted that he’s getting a steady began distributing in May.
8 Reverse Mortgage Advisor Summer 2001
PRESIDENT, continued from page 9
TEXAS UPDATE: THE FIRST SIX MONTHS reverse mortgage.
It has been seven months since the first reverse To achieve a responsive regulatory environment,
mortgage was closed in Texas. So far, lenders in the we must be sensitive to the competing priorities,
Lone Star state say business has remained steady. conflicting pressures and management constraints
“Texas is running very efficiently,” said Scott faced by the dedicated staff at HUD. We have asked
Norman, a regional sales representative with Financial them to work on a number of issues — implement-
Freedom. “The initial pent up demand is over but the ing last year’s legislation for the streamlined refi
future still looks very good for Texas.” program, co-ops in the HECM program, the long-
Financial Freedom, he added, is closing roughly term care incentive and a single national loan limit;
100 loans every month in Texas. Norman referred to planned unit developments and manufactured housing;
statistics compiled by Fannie Mae, which show that counseling issues; and document simplification —
192 Texans turn 65 each day. to name a few. To do all this they need to become
“That’s a very exciting statistic, which gives you an instant experts on a lot of different subjects.
idea of how far we think the market can expand here,” If we were to step into their shoes, we would
Norman added. recognize that rather than getting anxious about the
Another NRMLA member, Louise Feather, of time it is taking to accomplish all this, we could help
Homecorp Mortgage, Inc., Marble Falls, TX, says she has their learning curve by researching, gathering infor-
closed 17 loans since the beginning of the new year. mation and providing preliminary drafts of policy
“I wish it could be more but it can take a few months directives that could expedite their efforts. It also
for a borrower to decide whether they want to actually helps if we show them the utmost professional
get the loan,” she added. “I’m happy, though, with respect and courtesy by providing sample documents,
what we’ve been able to accomplish up to now. RMA relevant brochures, literature and well thought out
letters with suggestions and advice.
Certain of our objectives, including a single
national loan limit for HECMs, require legislation
Following are publications that have published
from Congress. A supportive legislative environment
reverse mortgage stories this year featuring
is required to obtain new laws. Congress has been
comments by NRMLA President Peter Bell, or relatively receptive to our proposals to date. We
discussing NRMLA in general: have achieved a lot, particularly for an organization
of our size and young age. There are, however,
Southern California Senior Life, A Reverse many more issues to be addressed — restructuring
Mortgage Can Help You Retire with Comfort the mortgage insurance premium to reduce upfront
and Confidence, published 7-2-01 costs; getting more financial support for counseling;
and simplifying the mandated disclosures.
If we look at what would be useful to our
The Cleveland Plain Dealer, Equity, Sweet
Congressional representatives and their staffs, we
Equity, published 4-16-01
would recognize that they need to know which of
their constituents are engaged in the reverse mortgage
BusinessWeek Online, Forward Thinking about business. They need to know about reverse mortgage
Reverse Mortgages, by columnist Ellen Hoffman, products. They need to know that you support them.
published 4-05-01 Well-presented succinct information is very
useful to lawmakers. We provide that. Information
The News & Observer Raleigh, NC, Reverse on reverse mortgage activity in their districts is also
Mortgages May Make Sense published 7-1-01 helpful. You must provide that.
Finally, a large network of knowledgeable coun-
selors must be readily available to fulfill consumer
PRESIDENT, continued on page 12
Reverse Mortgage Advisor Summer 2001 9
NRMLA NEWS, continued from page 3
A second proposed rule due out after HUD com- health care needs.
pletes an actuarial analysis will reduce the upfront Entitled Using Reverse Mortgages for Health Care:
mortgage insurance premium that’s charged on A NRMLA Guide for Consumers, the 10-page booklet
HECM refinancings. offers real life stories of seniors who used their
HUD expects to issue a final rule in the next few reverse mortgage to pay for prescription medication,
weeks after reviewing comment letters submitted by in-home care, and home modifications, and describes
NRMLA and other public groups. The Department other health care costs that can be paid for with a
accepted comments through July 5. reverse mortgage.
To view a copy of the proposed rule, go online to Copies of the brochure were made available to the
NRMLA’s Web site at www.reversemortgage.org. If public beginning in May. A news release, announcing
you would like to view NRMLA’s comments, please the publication of the new booklet, was distributed
contact Darryl Hicks, 202-939-1784, e-mail nationally to newspapers and other media. So far, more
dhicks@dworbell.com. than 700 copies of the book have been distributed to
Separately, HUD has hired Abt Associates, Inc., individuals who have called to request a copy.
Cambridge, MA, to conduct an actuarial study that To order additional copies of either brochure,
will examine numerous proposed changes to the contact Laura Hampton, 202-939-1788,
HECM program, including the impact of creating a e-mail lhampton@dworbell.com.
single national loan limit for HECMs. The actuarial
study is due to be completed sometime in October. AARP UPDATES REVERSE MORTGAGE CONSUMER GUIDE,
Once the actuarial study is completed, HUD is WEB SITE
expected to begin work on other items mandated in AARP has been busy updating the various media it
the housing law. These include: waving the FHA uses to distribute information on reverse mortgages
mortgage insurance premium in cases where the to consumers. The recent changes include:
borrower uses the loan proceeds to purchase qualified Consumer Guide. An all-new, 68-page version of
long-term care insurance. AARP’s guide to reverse mortgages, titled Home Made
Money, was published in January 2001. More than
HUD RELEASES MORTGAGEE LETTER ON RM SERVICING 20,000 copies of the guide have been distributed by
HUD has issued a new Mortgagee Letter (No. AARP to date. You can order free copies by calling
2001-16, dated June 25) for the HECM program that 800-209-8085 and pressing 1, or download a copy off
announces the transfer to a new contractor of the Internet at www.aarp.org/revmort.
responsibility for handling servicing issues, and Internet Web Site. Thirty new web pages on
information requests relating to HECMs that have reverse mortgages at AARP Webplace
been assigned to the Department. The letter also (www.aarp.org/revmort/) were posted in February
revises requirements for providing evidence of 2001. In March, the new pages attracted 93,000 hits
assignment of a HECM to HUD to secure the pay- and 12,000 user sessions. Fifteen new pages have
ment of a claim, and has a related form as an also been posted at www.reverse.org.
attachment. TeleCounseling. Under a HUD pilot project, the
The mortgagee letter and attachment (HECM AARP Foundation is offering HECM counseling by
assignment submission certification form) are posted telephone in cooperation with 32 selected counselors.
on NRMLA’s Web site at the following location: Consumers learn about this telecounseling service
http://www.reversemortgage.org/ml_2001_16.htm. when they order free copies of Home Made Money.
Along with the consumer guide, AARP sends consumers
NRMLA PUBLISHES NEW HEALTH CARE GUIDE a checklist they can use to assess their readiness for
NRMLA has published a second reverse mortgage reverse mortgage counseling. The checklist covers
booklet to educate seniors and their adult children eligibility, estimated loan amounts, and other options.
on how the product can be used to pay for critical It also provides information on obtaining tele-
10 Reverse Mortgage Advisor Summer 2001
counseling through the AARP Foundation. Before 10-year span, representing a 10 percent growth rate.
referring consumers to telecounseling, the AARP “The slower growth of the population 65 and over
Foundation verifies that consumers have received the reflects the relatively low number of people reaching
consumer guide and reviews the checklist with them. 65 during the past decade because of the low number
of births recorded in the late 1920s and 1930s,”
SENIOR POPULATION GROWTH SLOWS said Campbell Gibson, a senior Census Bureau
The U.S. Census Bureau says the 65-and-over demographer.
population increased at a slower rate than the overall The most rapid increase in the size of any age
population for the first time ever, according to an group was the 49 percent jump in the number of per-
analysis of 2000 census figures. sons aged 45-54, which grew to 37.6 million in 2000
A press release issued by the Census Bureau, dated from 25.2 million in 1990.
May 15, shows that the overall population grew to To view an online copy of the Census Bureau
281.4 million in 2000 from 248.7 million in 1990 — a press release go to www.census.gov/Press-Release/
13 percent increase. www/2001/cb01cn67.html.
The number of persons aged 65 and over grew to To examine senior population statistics by state
34.9 million in 2000 from 31.2 million during the same go to www.elderweb.com. RMA
DAWSON, continued from page 1
either. Yet he was still paying a monthly mortgage things, like the Amazon River trip. “It was a seven
totaling some $647, which didn’t leave much left day cruise, there were 15 of us, and it was wonderful,”
over for food and other essentials. he added. “I spent time looking at all the birds, the
“I was on food stamps at one point,” he said. group of us counted 116 different species, and other
Two years after retiring, in late 1996, Mr. Dawson forms of wildlife, including monkeys.”
happened to see a newspaper ad announcing an Here’s an interesting fact: “The Amazon, because
upcoming public meeting on reverse mortgages that of all the rain fall, rises 28 feet every year,” he added.
was to be held near his home. Curious, he went to “When it eventually recedes, the natives are left with
the meeting, where he met Carolyn Hummel, a very fertile ground which they use to plant their corn,
reverse mortgage specialist with ComCor Mortgage rice, and other things.”
Corporation, Hoffman Estates, IL. In addition to the Amazon River excursion, Mr.
Shortly thereafter, on January 24, 1997, Mr. Dawson has taken some classes through Elderhostel,
Dawson closed on a $36,342 FHA Home Equity a non-profit corporation that schedules short-term
Conversion Mortgage from ComCor. As collateral, educational programs, generally one week in length,
Mr. Dawson used his single-story “Chicago bunga- for persons 55 and older.
low” — appraised at $106,000 — containing two- “The first course I took through Elderhostel was
bedrooms, a living room/dining room, and one bath on Appalachian heritage,” he added. “I traveled to a
that was built in 1932. small college in Kentucky for five days. Very interesting.
To close the deal, Mr. Dawson had to pay ComCor I’ve taken other courses on Scottish heritage — that
an additional $20,000 cash out his own savings was in Kentucky too — and another on the environ-
because he still owed roughly $56,342 on his first ment, which was hosted at Lake Tahoe.”
mortgage. But once the first mortgage was entirely In reflecting back on the past few years, Mr.
paid off, Mr. Dawson no longer had to worry about Dawson said he was thankful he got a reverse mort-
making a monthly payment ever again. gage. “I really needed that reverse mortgage to stay
This allowed him to start saving money for fun alive,” he said. RMA
Reverse Mortgage Advisor Summer 2001 11
PRESIDENT, continued from page 9
Briefs
need. Counseling is a great asset to our business. Competent counselors
help bring information and comfort to prospective reverse mortgage clients.
Former NRMLA Board
If we look at what would be helpful from a counselor’s perspective, we Member Reenters
see that lenders can play an important role in providing educational RM Business
opportunities, training and information to counseling professionals. Invite Ken Keranen, former
them to observe closings. Have them over to your office for a tour, a
reverse mortgage manager at
lunch and a chat. Give them literature that will further their insight into
Seattle Mortgage Company,
reverse mortgages. Offer them your old computers as you replace them.
Seattle, WA, and NRMLA
There’s a lot you can do to help them out.
In each of these cases, to achieve what I believe are the five essential Board member, has reentered
ingredients for our growth, if you “step into the shoes of the other party” the business after a year-long
and look at things from their perspective, you will begin to understand sabbatical. Keranen has gone
what needs to be done. Whether dealing with prospective clients, HUD back to work for Seattle
program administrators and regulators, lawmakers in Congress, or hous- Mortgage, opening an office
ing counselors, trying to assess things from their viewpoint is a valuable in Las Vegas, NV.
exercise. Once you do, the path to solutions becomes much more clear.
Keranen left Seattle
We’re trying to appreciate the varying perspectives of all of the parties
Mortgage in 1999 to work for
who must be involved if reverse mortgage volume is to grow. Our plat-
Senior Homeowners Financial
form is to make sure that all of these perspectives are recognized; our
objectives are to make sure that they are appreciated and addressed. Only Services, Inc., Ft. Lauderdale,
then can we reach our potential. RMA FL. He left the reverse mort-
gage business not long after.
Profile By State of Senior Population: Census 2000
NRMLA Member Opens
STATE OR TERRITORY % OF POPULATION
OVER 65: 2000
% OF POPULATION
OVER 65: 1990
STATE OR TERRITORY % OF POPULATION
OVER 65: 2000
% OF POPULATION
OVER 65: 1990
New Operation
Alabama ......................13.0 (579,798)*..........12.9 Montana.....................13.4 (120,949).............13.3 NorthCentral Mortgage
Alaska............................5.7 (35,699) ...............4.1 Nebraska....................13.6 (232,195).............14.1 Services Corporation, Ocala,
Arizona........................13.0 (667,839) ...........13.1 Nevada .......................11.0 (218,929).............10.6
Arkansas .....................14.0 (374,019) ...........14.9 New Hampshire.........12.0 (147,970).............11.3
FL, has formed a new compa-
California.....................10.6 (3,595,658) ........10.5 New Jersey .................13.2 (1,113,136)..........13.4 ny — called American Reverse
Colorado........................9.7 (416,073) ...........10.0 New Mexico...............11.7 (212,225).............10.8
Mortgage — that will focus
Connecticut.................13.8 (470,183) ...........13.6 New York ...................12.9 (2,448,352)..........13.1
Delaware .....................13.0 (101,726) ...........12.1 North Carolina ...........12.0 (969,048).............12.1 exclusively on originating
District of Columbia ...12.2 (69,898) .............12.8 North Dakota .............14.7 (94,478)...............14.3 reverse mortgages, according
Florida .........................17.6 (2,807,597) ........18.3 Ohio............................13.3 (1,507,757)..........13.0
Georgia ..........................9.6 (785,275) ...........10.1 Oklahoma ..................13.2 (455,950).............13.5 to company President W.L.
Hawaii .........................13.3 (160,601) ...........11.3 Oregon .......................12.8 (438,177).............13.8 Pulsipher.
Idaho............................11.3 (145,916) ...........12.0 Pennsylvania .............15.6 (1,919,165)..........15.4
Previously, the staff at
Illinois ..........................12.1 (1,500,025) ........12.6 Rhode Island..............14.5 (152,402).............15.0
Indiana ........................12.4 (752,831) ...........12.6 South Carolina...........12.1 (485,333).............11.4 NorthCentral Mortgage origi-
Iowa.............................14.9 (436,213) ...........15.3 South Dakota.............14.3 (108,131).............14.7
nated both reverse mortgages
Kansas.........................13.3 (356,229) ...........13.8 Tennessee ..................12.4 (703,311).............12.7
Kentucky .....................12.5 (504,793) ...........12.7 Texas ............................9.9 (2,072,532)..........10.1 and other mortgage products.
Louisiana.....................11.6 (516,929) ...........11.1 Utah..............................8.5 (190,222)...............8.7 However, the company decid-
Maine...........................14.4 (183,402) ...........13.3 Vermont .....................12.7 (77,510)...............11.8
ed to form a separate firm
Maryland .....................11.3 (599,307) ...........10.8 Virginia.......................11.2 (792,333).............10.7
Massachusetts ............13.5 (860,162) ...........13.6 Washington................11.2 (662,148).............11.8 staffed with loan officers that
Michigan......................12.3 (1,219,018) ........11.9 West Virginia .............15.3 (276,895).............15.0
will work only with reverse
Minnesota ...................12.1 (594,266) ...........12.5 Wisconsin ..................13.1 (702,553).............13.3
Mississippi...................12.1 (343,523) ...........12.5 Wyoming....................11.7 (57,693)...............10.4 mortgage clients.
Missouri.......................13.5 (755,379) ...........14.0
Notes: *Number in parenthesis indicates total population in the state aged 65 and over in 2000.
Source: U.S. Census Bureau
12 Reverse Mortgage Advisor Summer 2001