- 1 hour ago
On today’s sponsored episode, Editor in Chief Sarah Wheeler talks with Fraser Tod, vice president of sales strategy and pricing at Finance of America, and Courtney Rozell, manager of partner engagement at Finance of America, about the flexibility of reverse mortgages and how loan officers can prepare now for business in Q1.
Related to this episode:
Finance of America
https://www.financeofamerica.com/explore/reverse-mortgage/instant-estimate/?pid=1688&customer_id=765-793-2036&pid=1688&adgroupid=165064136619&campaignid=11607923474&creative=770500952154&device=c&devicemodel=&feeditemid=&extensionid=&clickid=CjwKCAiAqabXBhBUEiwAw_SQpakm9NgaQaE0LB5_yZaoLQzc-r7Y4VytGT4psm4wiBlKk9EALDTKFRoC5koQAvD_BwE&keyword=finance%20of%20america&loc_interest_ms=&loc_physical_ms=9026948&matchtype=e&network=g&networkType=search&targetid=kwd-1772953995&utm_source=google&utm_medium=cpc&utm_term=finance%20of%20america&utm_campaign=G_S_Brand-Non-Core_AAG&kenibpid=google&sfid=701Ns00000JwpOE&testid=152a&gad_source=1&gad_campaignid=11607923474&gbraid=0AAAAADnhfu1rm9fmfhlhZFr7Dw0jMhoOE&gclid=CjwKCAiAqabXBhBUEiwAw_SQpakm9NgaQaE0LB5_yZaoLQzc-r7Y4VytGT4psm4wiBlKk9EALDTKFRoC5koQAvD_BwE
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The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.
Related to this episode:
Finance of America
https://www.financeofamerica.com/explore/reverse-mortgage/instant-estimate/?pid=1688&customer_id=765-793-2036&pid=1688&adgroupid=165064136619&campaignid=11607923474&creative=770500952154&device=c&devicemodel=&feeditemid=&extensionid=&clickid=CjwKCAiAqabXBhBUEiwAw_SQpakm9NgaQaE0LB5_yZaoLQzc-r7Y4VytGT4psm4wiBlKk9EALDTKFRoC5koQAvD_BwE&keyword=finance%20of%20america&loc_interest_ms=&loc_physical_ms=9026948&matchtype=e&network=g&networkType=search&targetid=kwd-1772953995&utm_source=google&utm_medium=cpc&utm_term=finance%20of%20america&utm_campaign=G_S_Brand-Non-Core_AAG&kenibpid=google&sfid=701Ns00000JwpOE&testid=152a&gad_source=1&gad_campaignid=11607923474&gbraid=0AAAAADnhfu1rm9fmfhlhZFr7Dw0jMhoOE&gclid=CjwKCAiAqabXBhBUEiwAw_SQpakm9NgaQaE0LB5_yZaoLQzc-r7Y4VytGT4psm4wiBlKk9EALDTKFRoC5koQAvD_BwE
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
More info about HousingWire
https://lnk.bio/housingwire
Want more from Sarah? Don’t forget to subscribe!
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.
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NewsTranscript
00:00Welcome, everyone. My guests today on this sponsored episode are Fraser Todd, Vice President of Sales Strategy and Pricing at
00:07Finance of America, and Courtney Rizel, Manager of Partner Engagement at Finance of America, to talk about the flexibility of
00:14reverse mortgages and how loan officers can prepare now for business in Q1.
00:29Courtney and Fraser, welcome to the podcast.
00:35I'm so excited about this conversation. You know, I love reverse and the opportunity that it gives people. And I
00:42feel like, you know, still, we are very, it's underutilized, in my opinion. So excited to kind of dive in
00:48with you two.
00:48Experts and find out what you're seeing here. So my first question is, where are you seeing loan officers use
00:54reverse mortgages most often?
00:56You know, we actually talk to brokers and loan originators almost every day because we're in training and doing things
01:04with them. And so they talk with us a lot about where our borrowers are utilizing these.
01:11And, you know, a lot of them are looking at, obviously, retirement expenses, and maybe things they didn't plan for,
01:19or existing financial obligations, paying down high interest credit card debt, things like that, and other changing financial needs.
01:27But there's also a lot of other people that are using it to build a retirement that they've been looking
01:32for for their whole life, right? Maybe they want to do some travel, or maybe they want to build an
01:36ADU to help with that monthly income.
01:40So we see a lot of diversity in how people are using the funds.
01:46Yeah. And I think, you know, with reverse, similar to how, if a veteran borrower comes into your office, you
01:55think, oh, VA loans.
01:56If a 30-year-old couple comes in looking to buy a first home, you think first-time homebuyer options.
02:03When you've got someone 55 or older, you want to think reverse options to present them along with the other
02:10options that you have, because it has certain features that are different and may be appealing to different borrowers in
02:16different situations.
02:17And especially when you're looking at high rates and debt-to-income being a big issue in a lot of
02:24products, reverse offers different options which can help borrowers achieve their needs in different ways than the traditional products.
02:34I think this is really important, right? Because I think it's easy for people to maybe pigeonhole, oh, this is
02:41where reverse belongs.
02:42But you guys just listed off some things that are like, you know, you could have a range of people
02:47who need this, and that it would benefit, and that it would be part of their wealth building plan and
02:52their retirement plan.
02:53What are some other borrower situations you're helping to address very specifically?
02:58Yeah, I mean, I think the key point is, the key area that we see it resonating with a lot
03:06of originators who don't traditionally do reverse, is it provides an option when borrowers hold their hand up.
03:13Let's say second liens, like home equity is very popular right now.
03:18It's a great option for a lot of borrowers who have low rate first lien mortgages.
03:25The reverse products, we have second lien options that don't have payments.
03:30So you still run into a lot of DTI issues and qualifying issues.
03:34So probably the lowest hanging fruit for reverse opportunities are loans that don't work on other products when borrowers have
03:42come to you who have needs.
03:43They need money for whatever the reason may be, home renovation, paying off other debt, student loans, auto loans, but
03:55they might not even qualify for other products, or they might not want an additional payment.
04:00So having a reverse option that doesn't have that additional payment can be very appealing for a lot of people.
04:05And it is important to remember that borrowers do need to meet all their loan obligations, which includes paying their
04:13taxes and insurance and maintaining the property.
04:16So even though there are no required monthly mortgage payments, there are other loan obligations that they, that is important
04:25that they maintain.
04:26Yeah, and just to add on to that, I think another really interesting area that borrowers are utilizing these funds
04:35is kind of to leave a living legacy, as it's called.
04:38So they're helping their adult children, maybe put a down payment on a home, or they're helping their grandchildren pay
04:45off, you know, like, you know, high edgy, higher education debt, things like that, that they're able to see what
04:53their inheritance, so to speak, would do for them, but they get to see it while they're still living.
05:00And that's really powerful for a lot of people.
05:02And they, and they love that.
05:04They love being able to do that and help their families in those ways.
05:08I am always surprised when we look at who's taking out student loans, the number of people who are, who
05:13are well into retirement years who are taking out student loans are not taking those student loans out for themselves.
05:18No.
05:20So to have more options is so great.
05:22You know, let's talk about the flexibility, because I think this is one of the things that's at the heart
05:26of reverse is that it, it offers the lenders really a flexible option when they can help more people, they
05:35can help them in different ways.
05:36What does that look like for loan officers right now?
05:39The old story with reverse mortgages is if you present the features of a reverse mortgage to a borrower or
05:48an originator, but you don't call it a reverse mortgage, often they're like, those are some really cool features.
05:55I like this product.
05:56Tell me more.
05:57I want to learn about how this can help me.
06:00There is still a little bit of a stigma around the reverse mortgage label.
06:03When people say that, you get a little bit of pushback.
06:07But when you look at the features of specifically of the reverse, it's very appealing.
06:12You do not have to make monthly payments.
06:15You do have to maintain the obligations of the loan, which includes paying your taxes, insurance, maintaining the home.
06:22But you do not have to make a monthly payment.
06:24But you can.
06:25If you want to continue making monthly payments, you're able to.
06:29But you don't have to make that payment.
06:31That's probably the most powerful feature of the reverse mortgage.
06:34It's also non-recourse.
06:36So you're not going to owe more than the home is worth.
06:38And there's several other features which are very appealing.
06:40I think it's really interesting what Frazier said about there's no monthly mortgage payment required.
06:49And something that we've seen a lot in the last couple of years is that people, there's a stigma out
06:56there with not making a mortgage payment.
07:00And so when you lead with that, right, like, oh, you don't have to make a monthly mortgage payment.
07:05And borrowers get a little bit like, oh, I don't know how I feel about that.
07:11And so I love what Frazier just said.
07:12And we talk about this a lot at Finance of America through our training and marketing and all of that,
07:18which is there's no monthly payment required.
07:22You can make a payment.
07:23And a lot of people do.
07:24They do that to help keep the loan balance down and have, you know, more equity in a line of
07:30credit or to keep the, you know, equity line available to their heirs when they do pass or they move
07:39out of the home.
07:40So there is a lot of flexibility with, you know, with these types of products.
07:46And honestly, I think that there's a big piece of this that a lot of loan originators don't realize, which
07:52is, and it goes back to something that Frazier said a minute ago, which is, you know, if you've got,
07:58you know, somebody who's a retired or who's a veteran of some sort and they come in, you're automatically going
08:05to a VA loan.
08:06You know, you've got a first time home buyer, you're obviously going to some type of FHA, right?
08:11Well, these are, these are loans designed specifically for a demographic, just like those other ones, right?
08:17And so it's just, you know, Frazier and I talk about this all the time, like, you know, it is,
08:23these are, these products are the most flexible products for this age demographic.
08:27So why aren't people getting more, you know, into this and, you know, figuring out what, if it could work
08:34for them?
08:34And it gives loan originators a reason to be a lifelong lending person for that borrower, right?
08:43They got their, got them their first home, got them a HELOC, you know, or, and on down the line.
08:48And now they can help them, you know, with their, with some type of retirement mortgage, so to speak, right?
08:55So.
08:56I love that.
08:57And to your point, I mean, we see that people are staying in their homes longer and longer, right?
09:02So this is another opportunity to, to work with people at a time when maybe, otherwise they really wouldn't have
09:08a transaction.
09:09They wouldn't have the option to use this money in a different way.
09:13So I guess my question is like, when you, how, how do homeowners respond when reverse mortgages are presented as
09:19an option?
09:20And, and you said something, Frazier, earlier on like, it depends on what you call it, right?
09:24And how you describe it.
09:25So how do you think that they respond?
09:29Yeah, I, I think the, the key is overcoming the, there's an, I don't know if sticker shock is the
09:34correct word, but the, the word reverse mortgage still carries some stigma.
09:39And, uh, if you get beyond that, um, and you just look at how the product works and what it
09:47can do for them in different situations, people respond very positively.
09:51And what we've seen is if you start looking at, Hey, this is not your, your neighbors down the street
09:58have this loan.
09:59Um, there's, there's lots of people in your community that have benefited from this.
10:03When you look at the borrower stories that we have, we have some very powerful testimonials from borrowers, um, that
10:09show how these products have improved their life.
10:12And once you kind of look in what you can, what this allows you to do and how the features
10:17work, it's, it's, it's almost always positively received.
10:22Courtney, um, you know, part of this is like, they just need to know it's an option.
10:27So how do mortgage professionals still look at, um, reverse mortgage?
10:30Do, do, are they excited about, do they see the possibility here and the options that it lets them have?
10:36I think so. Um, and I think what, what we see a lot in our, in our training classes and,
10:42and, you know, live trainings and things like that is that even though they know it's a good product, they
10:48still have a hard time talking about it for the fear of what, what negative perception is out there.
10:55And so it's, it's, it's really interesting to, to try to, to, for them to overcome that and be able
11:02to have, uh, an intelligent conversation about it.
11:06And, and one of the things that we do, we actually liken this to, um, cars.
11:12So, you know, we say, oh, when, you know, when I grew up and I'm totally dating myself here, but
11:16when I grew up, we didn't, we didn't, seatbelts weren't required.
11:19Right. I mean, I can remember standing on my grandpa's truck in the middle seat, you know, and like, you
11:24know, uh,
11:26tilting as we went around corners and stuff right now there's airbags and there's, you know, kids are in car
11:32seats until they're 10. Um, there's all of these things.
11:36And so much like cars have gotten safer. So have reverse mortgages, even, you know, one of the, the last
11:44large safety features that was put into place for reverse was in 2014 with financial assessment.
11:50And if you think about that, it's only 2026, that was only 12 years ago. So, you know, loan originators
11:57are up against a very, you know, 65 years of negative perceptions and
12:03only, you know, 20 to, you know, 10 to 20 years of, you know, this is a much safer product.
12:12So that's really the route, um, to go is that this is
12:15not your grandmother's or your great grandmother's reverse mortgage. The things that people used to see that happened with these
12:23don't happen
12:23anymore. And they, and they don't happen anymore because there have been protections put into place.
12:30Well, I love that analogy because I also am of that era where, uh, I absolutely remember not having a
12:36seatbelt along with a lot of other, um, hilarious things that now we would say that's not the way to
12:40do it. And so it's, it, that's a great analogy to do that.
12:43You know, in this market it's, uh, and, and with the demographics, it feels like we are at a perfect
12:49tipping point for reverse because you have a lot of people who are at an age where they can, they
12:54qualify for it.
12:55They might have a lot of home equity and then you have, you know, uh, um, a mortgage origination environment
13:00that that's pretty limited right now. So I think there's a lot of, a lot of momentum, but so where
13:06would a loan officer who's never done a reverse mortgage, what do they need to get started?
13:12My, my quick answer is they talk to Courtney.
13:17Uh, you know, I, I think there's, there's, there's several fantastic lenders out there who specialize in, in, in reverse
13:28mortgages and teaching you the foundational product knowledge, um, teaching you how to talk to borrowers, um, teaching you where
13:36to find these borrowers.
13:38Um, and, you know, Courtney is put on her team have a, you know, a fantastic program that can take
13:45a, take an originator from zero to a hundred.
13:48Yeah, actually it's, um, we just finished, uh, one of our sessions just a little bit ago and one of
13:55the originators that's on the call and she's done a couple of reverse mortgages.
13:59So we, we take people who don't have, you know, don't have any experience with reverse mortgages at all to
14:05people who've been doing it for years and we try to help everybody apply, you know, what they're learned, what
14:11they've learned and how they could do it differently.
14:13But it was interesting because this particular person was like, this is the best training I've ever received because it's
14:19not about the timeframe that you're taking to get through the training.
14:22It's do you, do we have the information we need to be successful? And we hear that time and time
14:28again. And, and, you know, there are a lot, a lot of other lenders out there.
14:32I will say this just because I, I am part of the training team and I've seen a lot of
14:38the training that's out there.
14:39I really do think finance of America has some of the best onboarding and training, um, in the business. And
14:45it's because we care.
14:46We want people to understand these products and be able to help people, um, and help enrich people's lives with
14:55them. And not just, it's not just about the money, right?
14:58It's really about how do we help all of the people that we can possibly help.
15:02This isn't, this doesn't have to be a massive undertaking where you have to know every nuance of the detail.
15:09Um, you can learn the key points to be able to intelligently talk to a borrower and then rely on
15:15a great partner like finance of America to help you execute on it.
15:19And, um, that, you know, that we, we, we have a lot of partners that, that will utilize that route,
15:24um, where they allow us to do a lot of the processing, a lot of the loan for them, and
15:29they can focus on maintaining the borrower relationship.
15:32I love that. And, you know, the training would seem to be step one, right? So let's dig into, you
15:37know, the other support resources that finance of America provides so that, that, you know, a mortgage professional can go
15:44from onboarding to the very first loan.
15:46Well, so we have a, we have a, each, each account or each company and each person in that company
15:53that's doing reverse has a sales team dedicated to them.
15:58So, um, and they can, they, they do everything from, Hey, here's a scenario. What do I do to, Hey,
16:05I'm ready to just submit this loan and let's get it pushed through.
16:09So they are, I mean, they're the people that we have working on these teams, the tenure there is gosh,
16:16Fraser, I don't even know, like anywhere. I mean, I think it starts at 10 years, right?
16:21Which means you've got people that are, that are working with you side by side that have been doing this
16:27for a very long time.
16:28They've seen pretty much every scenario that you can possibly think of. So they know how to, how to help
16:34you with, you know, or the loan originators with overcoming objections or how do I structure this loan?
16:41So it works better for the borrower. So there's a lot of support as far as that sales team on
16:47top of what we do through our teams as well.
16:51Probably the hardest part of our business and all of our, you know, any mortgage business, but reverse especially is,
16:58is, is finding the right borrower who's ready to interact now.
17:01And, you know, that's something that we really focus on is understanding our, our partner's business and then helping them
17:12find within that business, how they can identify those clients who not only qualify for, for this type of loan,
17:22but are ready to buy right now.
17:24And they have a need that we can meet. So that kind of marketing, that, that digging into that, that
17:29past databases, that, that helping them focus their messaging.
17:33That's a big part of what we do to help them be successful.
17:37Makes total sense. You know, making sure you have the person at the right time. That's, that's half of it.
17:42And like you said, in any origination business, as we look towards 2027,
17:46what can loan officers do right now to proactively prepare for, you know, the business and position themselves for a
17:54great first quarter?
17:55Yeah. I mean, I think the key word and what you said is proactive. A lot of, a lot of
18:01people treat, um, treat, frankly, they treat their reverse mortgages as a, something that they have in their back pocket.
18:08If somebody comes in the door and says, I want a reverse mortgage, um, you're going to get borrowers that,
18:13that comes up where this is the only option.
18:15Well, they've specifically said they want them and you can help them, but the proactive element is starting to get
18:22out there and have more conversations with people that could benefit.
18:26Um, so ensuring that you have, you know, good lending partners that give you the tools to be able to
18:32educate yourself, um, to be able to get out there and market, to talk to more clients about these options,
18:37um, to take those proactive steps is most important thing you can do going into the new year.
18:42Um, we have a lot of uncertainty come up. We have an election coming up. We have, uh, stock markets,
18:48which are, are frothy and you hear words like bubbles being thrown around.
18:52Um, when there's, when there's lots of uncertainty around that, around lending environment, um, having something a, like such as
19:00a reverse mortgage as an option is very appealing to a lot of different, um, people.
19:05So, uh, kind of, uh, kind of approaching that in, in the right way and having this conversation and setting
19:11the education base now is going to provide, um, more opportunities to, to write more loans going into the new
19:18year.
19:20And I would add that people are living longer now than they ever have before. And so for a lot
19:28of people in this age demographic, and we're, when we're talking about some of our products, we're talking starting at
19:3455, right? Um, this chapter of their life could be the longest financial phase that they've ever, you know, come
19:44up, come up against.
19:45Um, also this could be the last major financial decision that somebody makes in their lifetime. And so I think
19:54Frazier is spot on and perfectly right about being proactive, right? Um, loan originators really have to start introducing these
20:04products into their customer base and working with referral partners and, um, really having those conversations because when people understand
20:14that there is a, there is a, there is a way to supplement your retirement and it, you, and you
20:20have it at your fingertips and it's not scary and it's not bad. Um, even though, you know, you hear,
20:28oh, it's bad. And then you ask them, well, what, what have you heard? Well, I don't know. I've just
20:31heard it's bad. Right. They don't even know why they feel that way. Right. But I think when you start
20:36to talk about those things, like, look,
20:38you, you, you know, you're retired and you're 60 and maybe your parents lived until they were, you know, 85,
20:45that's 25 years of time that you have to make sure that you've got, you know, um, funds and things
20:50to see you through. So I think that's also leads into that as well.
20:55Well, let's talk about timing just a little bit. So say, you know, I mean, we've got a couple months
20:59left of the year. We're talking about Q1. If someone who has never done this before, you know, can they
21:04do something so that like they're set up well, like how long is this, how long does it take to,
21:09to be ready?
21:09So, I mean, two weeks, you know, I mean, we have a lot of resources. Um, Frazier kind of mentioned
21:19it before where we can help review existing customer, um, databases or client bases and help people look for potential
21:28opportunities.
21:28And then following that, um, you know, between the training team and the marketing team and their dedicated sales team,
21:37get them up and running and ready to hit quarter one, you know, running and, and have an outreach strategy
21:44and, um, already have, you know, potential opportunities to, to start marketing to, um, and having conversations with.
21:52So, um, I mean, I, I mean, I don't think I would say any more than two weeks and, and
21:57to Frazier's point earlier, you know, that's not, you're not going to be, you don't need to be an expert
22:03in every single solitary thing. You just need to be able to have an intelligent conversation with someone.
22:08I love that. And I, I, especially in this environment where people are, are looking to, um, expand their business
22:15and, and maybe a kind of tough time. And, you know, we have people who would benefit so much from
22:20it.
22:20It seems like a great way to get prepared for the new year.
22:25Frazier, Courtney, thank you so much for being on. I appreciate you.
22:28Thank you for having us.
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