Layla Zulfa
San Antonio, TX – The National Reverse Mortgage Lenders Association (NRMLA) convened its Annual Convention & Expo in San Antonio on Tuesday, marking the official start of its flagship industry event. Amidst a dynamic market environment characterized by heightened interest rates and a significant shift in borrower product preferences, industry leaders gathered to share practical insights and strategic approaches aimed at empowering originators to not only navigate but also thrive. This year’s convention comes at a pivotal moment, with the reverse mortgage landscape demonstrating a clear move towards proprietary products, underscoring the need for adaptive strategies and a deeper understanding of borrower needs.
The convention, a cornerstone event for the reverse mortgage sector, typically draws hundreds of professionals, including originators, lenders, servicers, technology providers, and regulatory experts. It serves as a crucial platform for knowledge sharing, networking, and addressing the most pressing issues facing the industry. This year’s gathering, held against the backdrop of a fluctuating economic climate, emphasized a proactive stance, focusing on actionable advice for loan officers seeking to enhance their closing rates and client satisfaction.
A significant observation highlighted at the outset of the convention is the evolving market share within reverse mortgage products. Data presented and discussed indicates that since 2026, proprietary reverse mortgage products have increasingly supplanted federally insured Home Equity Conversion Mortgages (HECMs) as the preferred choice for a majority of borrowers. This shift is attributed to a confluence of factors, including the flexibility and tailored features of proprietary offerings in response to current market conditions. Despite these product distinctions, experts at the NRMLA event stressed that the fundamental principles of successful origination—creative problem-solving, consistent and transparent communication, cultivating robust relationships with financial planners, and investing in advanced education—remain paramount for loan officers aiming to differentiate themselves and secure more business in a challenging marketplace.
Addressing "Short-to-Close" Scenarios with Innovative Solutions
One of the key challenges discussed at the convention revolved around "short-to-close" situations, where a borrower’s available funds at closing fall short of the required payoffs and associated expenses. Dan Hultquist, co-founder of REVERSE plus and director of reverse mortgage communications at Movement Mortgage, dedicated a significant portion of his presentation to this critical issue. Hultquist outlined common scenarios that lead to these funding gaps, including reduced principal limit factors driven by higher mortgage rates, repeated refinancing by borrowers, and the mandatory Life Expectancy Set-Aside (LESA) for HECM loans. He advocated for a tiered approach to solutions, tailored to the severity of the shortfall.
For borrowers facing minor shortfalls, typically in the range of a few thousand dollars, Hultquist proposed a strategic scheduling of closings. By timing the closing to occur within six months of a borrower’s upcoming birthday, they can "age up." This seemingly simple adjustment can result in qualifying for additional loan proceeds and, in the case of HECMs, potentially a reduced LESA requirement, thereby bridging the funding gap. This tactic underscores the importance of understanding the nuances of HECM calculations and leveraging them to the borrower’s advantage.
When the shortfall is more substantial, Hultquist suggested a pivot in product strategy. Transitioning from a HECM to a proprietary reverse mortgage or a second-lien product can be a viable alternative. These products often eliminate the upfront mortgage insurance premium (MIP) associated with HECMs, which can significantly reduce the overall costs and potentially eliminate the need for additional funds. Furthermore, originators can explore encouraging borrowers to utilize personal retirement savings or accept gift funds from family members. The rationale behind this suggestion is that the elimination of monthly mortgage payments inherent in a reverse mortgage can help borrowers recoup these advanced funds over time, offering a long-term financial benefit that offsets the immediate need for additional capital. Hultquist shared anecdotal evidence of deals exceeding $100,000 that were successfully closed through such creative financing strategies.
Hultquist also addressed shortfalls specifically linked to the LESA requirement in HECM transactions. He highlighted the potential of property tax exemptions as a pathway to reducing this burden. While HUD mandates a default discount of 15% on taxable assets for LESA calculations, Hultquist pointed out that the borrower’s actual tax rate can be applied if it is lower. This allows for a more accurate and potentially cost-saving calculation of the LESA, provided the borrower can substantiate their lower tax liability.
In addition to financial strategies, Hultquist emphasized the importance of reviewing homeowners insurance policies. He advised borrowers to shop for new policies with lower deductibles, noting that insurance premiums often escalate annually if not actively managed. This proactive approach to ancillary costs can contribute to freeing up funds that might otherwise be allocated to insurance expenses.
The Art of Inquiry: John Luddy on Maximizing Lead Generation and Conversion
John Luddy, senior vice president at Supreme Lending, who boasts over 25 years of dedicated experience in reverse mortgage origination, shared his insights on the profound impact of strategic questioning in building business and fostering productive relationships. Through countless interactions, Luddy has refined a set of key questions designed to elicit crucial information from borrowers, their spouses, and referral partners from the outset of any transaction.
Luddy’s initial approach with every client begins with the question, "How did you get my name?" This seemingly simple inquiry serves a dual purpose. Firstly, it provides invaluable feedback on the efficacy of marketing campaigns. Luddy articulated that advertising, while appearing to offer visibility, can become an "empty well" if not strategically deployed. He cautioned against the temptation of vanity metrics, emphasizing that the true measure of advertising success lies in its ability to generate tangible results and not merely in brand recognition. Understanding lead sources helps originators allocate marketing budgets more effectively, focusing on channels that consistently deliver qualified prospects.
Secondly, this question aids in identifying key contacts for follow-up should a borrower experience a moment of hesitation or reconsider their decision. Luddy noted that borrowers often pause before closing, seeking reassurance or exploring alternatives. In such instances, having established rapport with professional intermediaries like attorneys, financial planners, or accountants can be instrumental. These professionals, often perceived as more authoritative, can provide a stronger nudge to guide the client toward a decision, leveraging their established trust relationship.
When engaging with potential lead sources, Luddy’s pivotal question is, "What can I do to earn your business?" This question shifts the focus from a transactional request to a partnership-building dialogue. For instance, he explained that real estate agents value prompt callbacks and a demonstrable understanding of complex financial products, while financial planners prioritize solutions that seamlessly integrate into their clients’ overarching financial strategies.
Luddy identified banks that do not offer reverse mortgages as a potentially rich source of leads, particularly for customers who have been denied other forms of credit. He highlighted that bank branch managers are often willing to refer business if the reverse mortgage process is transparent and free of unexpected complications. This can be particularly beneficial for borrowers seeking to leverage home equity in retirement without liquidating other assets.
Beyond financial and logistical considerations, Luddy also stressed the importance of addressing potential borrower disabilities, such as hearing loss. He pointed out that individuals who have served in the military, worked in manufacturing or construction, or are over 62 may be experiencing diminished hearing. Failure to account for this can lead to misunderstandings and discomfort, hindering their ability to make informed decisions. Ensuring clear and accessible communication channels is therefore not just a matter of courtesy but a critical component of ethical and effective origination.
The Psychology of Persuasion: Ryan Ponsford on Influencing Decisions
Ryan Ponsford of Equity Wealth Academy, a familiar face to the NRMLA audience, presented a compelling argument that the psychological aspects of sales often outweigh the mathematical intricacies in the reverse mortgage industry, even when engaging with sophisticated financial advisors. Ponsford’s approach emphasizes building trust and understanding the underlying motivations of clients and partners.
For borrowers, Ponsford advocates for discussing the option of voluntary payments and highlighting the absence of prepayment penalties on reverse mortgages. This empowers borrowers by giving them a greater sense of control over their financial obligations and the flexibility to manage their cash flow without incurring penalties. This psychological framing can alleviate anxieties associated with long-term financial commitments.
When interacting with business partners, Ponsford distinguishes between asking for "referrals" and requesting "introductions." He described referrals as transactional, implying a simple hand-off. In contrast, an introduction, when executed effectively, represents a transfer of trust. A trusted professional vouching for an originator can significantly enhance credibility and open doors to new client relationships. This subtle but powerful distinction underscores the importance of cultivating genuine partnerships rather than merely seeking transactional exchanges.
Ponsford stressed that financial advisors, in particular, should leave conversations with an understanding that reverse mortgages are applicable to a broader demographic than they might initially assume and that earlier consideration of these products can yield greater long-term benefits for their clients. He suggested that advisors should be educated on the proactive use of reverse mortgages as a strategic financial planning tool, rather than solely as a last resort.
While psychology is a powerful tool, Ponsford cautioned against neglecting technical proficiency. He emphasized the critical importance for originators to fully comprehend the compounding growth feature of a reverse mortgage line of credit. The ability to clearly articulate how this feature works is non-negotiable for engaging effectively with financial professionals and positioning oneself as a knowledgeable partner in the financial solutions industry. A lack of understanding in this area can be a significant impediment to securing business from sophisticated financial planners.
Elevating Professionalism: Scott Harmes on the Value of the CRMP Designation
Scott Harmes, national manager of reverse at C2 Financial, alongside his daughter Christina Harmes of Barrett Financial, a Certified Reverse Mortgage Professional (CRMP), underscored the significant value of professional designations in the industry. The CRMP designation, achieved through a rigorous process involving extensive industry experience, letters of recommendation, and a challenging examination, signifies a high level of expertise and commitment.
Harmes, who originated his first reverse mortgage 16 years ago, shared a personal anecdote about a deal that profoundly impacted both the clients’ lives and his own career trajectory. This experience solidified his dedication to the reverse mortgage sector, leading him to transition exclusively from traditional forward mortgages to focus solely on reverse mortgages approximately eight years ago.
He shared his own success in passing the CRMP exam on the first attempt and subsequently developed a comprehensive study guide that has reportedly contributed to a near-perfect pass rate among his colleagues. Harmes attributes the CRMP designation to his ability to solidify more referral partnerships, noting that he rarely loses deals unless faced with insurmountable pricing discrepancies from retail competitors.
At C2 Financial, Harmes has implemented a robust mentorship model designed to cultivate new talent. This program pairs experienced loan officers with novices, guiding them through the origination of three reverse mortgage files. The trainee gradually assumes more responsibility with each subsequent file, gaining practical experience and knowledge essential for independent success. This structured approach ensures that new originators are well-equipped to handle the complexities of the reverse mortgage process.
Harmes also emphasized the importance of delivering borrower education in digestible segments, rather than overwhelming clients with lengthy proposals. He highlighted the crucial role of counseling in the reverse mortgage process and cautioned against potential pitfalls. Harmes’ policy is to avoid recommending free or grant-funded counseling sessions, citing the potential for borrowers to spend excessive time navigating administrative hurdles. Instead, he advises prompt engagement with the counseling process, especially in states like California where there is a mandatory waiting period after counseling before ordering appraisals or other services. This ensures that the borrower is well-informed and prepared to proceed with the loan application efficiently.
The discussions at the NRMLA Annual Convention & Expo in San Antonio provided a comprehensive overview of the evolving reverse mortgage landscape, offering practical strategies and highlighting the critical importance of expertise, communication, and client-centric approaches in navigating a dynamic and rate-sensitive market. The insights shared by industry leaders like Hultquist, Luddy, Ponsford, and Harmes equip originators with the knowledge and tools necessary to succeed and to better serve the growing needs of senior homeowners.
