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.”