Reverse requires expertise

by Ryan Smith01 Aug 2014
Reverse mortgages can be very lucrative for originators – but many LOs are wary of adding reverse to their product mix. There’s a reason for that: Originating reverse mortgages can be tricky if you’re used to the forward space.

But that’s no reason not to offer them to your customers, according to Glen Smart, manager of Nova Home Loans’ reverse mortgage division. The important thing, he says, is to have someone on staff who specializes in reverse.

“Our philosophy is that we really want the originators who work with the reverse mortgage product to specialize in it,” Smart said. “Our originators who specialize in this program get to work with other originators who specialize in traditional mortgages. It lets you know you’ve got a number of ways to help the customer.”

While adding reverse to your product mix can be lucrative, it’s not something you should do if you’re not committed to learning the ins and outs of the space, Smart said.

“From a company standpoint, if they have the right personnel in place – if they have people who are going to specialize in it, reverse can be a great product,” he said. “But if you have people who are just going to dabble in it, it’s very easy to make a mistake – a very public mistake.

“But they don’t have to be this nightmare product,” he added. “They’re not, if you have capable people in place. But if you’re going to do it once or twice a year, don’t even try it. I equate it to doing commercial loans. If you’re going to do one commercial loan a year and call yourself competent, you’re probably not. But if you specialize in commercial loans, there’s no problem.”

Even smaller brokers who don’t do reverse themselves should be prepared to refer customers to a reverse originator if it’s the best product for them, he said.

“Even if they don’t have the originator in house, I think they do a service to their customers and referral partners a service if they have a way to offer it – even if that means giving a handout to another company,” he said. “Oftentimes if people don’t have a product, they shy away from telling customers about it even if it could be the perfect solution.”


  • by William Matz | 8/1/2014 9:54:44 AM

    Reverse mortgages are not that difficult for anyone with mortgage experience and some financial training/education. The danger of reverse mortgage specialists is that they are unlikely to offer [or even be aware of] the full range of forward mortgage options. Both forward and reverse options should be offered to borrowers to allow for an informed decision. And it is important to include the financial and or/estate planner in the process to ensure that all the pieces fit properly.

  • by Bruce Goldman | 8/2/2014 8:18:36 AM

    “ The reverse mortgage mortgage program was created to help retirement planning and allow people to stay in their home they love. It enables homeowners age 62 and older to withdraw some of the equity in their home as tax-free money”

    You can use the money for anything, there are no restrictions on how you use the money you receive from a reverse mortgage. I can first be used to pay off a traditional mortgage, ( if you have one) Many people take advantage of the program to supplement or delay social security income, pay off debts and medical expenses, make home improvements, or simply gain financial security. Our clients say they like these benefits the most:

    · Relief form financial stress

    · The ability to continue to own and afford to live in the home they love

    · There’s are no monthly mortgage payments as mortgage as the home remains their principal residence

    · A credit line that grows over time

    · Any funds that are withdrawn are tax-free income

    Depending on your situation and the reverse mortgage Product you qualify there are options to receive your tax free money. You can select from these options:

    · Receive a lump sum payment

    · Utilize a line of credit to access money as you need it.

    · A combination of monthly payments, a full draw at closing or accessing your line of credit as you need it



Should CFPB have more supervision over credit agencies?