Stop Taking Orders

I recently got a call from a prospective reverse mortgage client who had already spoken with four other loan officers. He told me he had asked AI who the best reverse mortgage professional was to work with, and apparently it suggested me.

(Woohoo! Thank you, AI.)

So by the time he got to me, he knew the routine.

He was ready to give me the value of his house, his mortgage balance, his date of birth, his wife’s date of birth, and then have me send over “the quote.”

And I said, essentially:

“No. I’m going to ask you quite a few more questions than that.”

He paused. I could almost hear the Wait…what?

I explained that I didn’t want to waste his time, or mine, sending him a “quote of what’s possible” when I had absolutely no idea what he was actually trying to accomplish.

There are different reverse mortgage products, different lenders, and multiple ways I can structure the same loan. Before I start recommending any of them, I need to understand his situation well enough to make sure I don’t accidentally give him terrible advice simply because I didn’t ask enough questions at the beginning.

I could tell he liked the answer, but he was also genuinely caught off guard. Apparently, that wasn’t the process with any of the other loan officers he had spoken with.

And that brings me to a practice in the mortgage industry at large that I absolutely hate:

Taking an Order and Sending a Quote

Home value? Check. DOBs? Check. Mortgage balance? Check. Run the numbers, generate the PDF, hit send.

Here are your options! Let me know if you have any questions!

Except…have you SEEN some of our reverse mortgage proposals?

What the heckummm (LOL—I had to) is a principal limit?

What is a mandatory obligation? Why is the first-year line of credit different from the total line of credit? What does “initial disbursement limit” mean?

And why are there six different numbers on this page that all seem to be telling me how much money I can get?

We send this stuff to a 70-year-old homeowner who may have never heard a single one of these terms before, and then we wait for them to figure out which questions they’re supposed to ask us.

No.

That is our job.

I Don’t Just Need Your DOB. I Need Your Story.

Okay, technically I need your DOB. But you get my point.

Before I can possibly tell someone which reverse mortgage makes sense, or whether they should get one at all, I need to understand what we are actually trying to accomplish.

I want to be able to stand in my client’s shoes as much as I possibly can. I want to understand their goals, their sensitivities, their financial situation, and their family dynamics so I can look out at all of the available options with them, side by side, and help advise them on what I believe will serve them and their family best.

That means not just today, but throughout retirement and ultimately at the end.

That matters because different loans and different loan structures accomplish different things. Sometimes one goal can even be achieved at the expense of another.

Goals compete. Tradeoffs exist.

And I believe it is our job as professionals to help clients understand those tradeoffs so they can make the most informed decision possible.

That’s why my initial conversation is considerably more involved than, How old are you and what’s your house worth?

I start with a deceptively simple question:

What brings you to look into a reverse mortgage today?

And then we keep going.

I want to understand the home, the existing mortgage and other debts, income and assets, how long they plan to remain in the property, and whether the home is actually suited for aging in place.

I want to know what concerns them about reverse mortgages. Who else is involved in this decision? How far away is retirement? What do they think will happen to the house when they pass away?

Do their heirs want the physical home, or will they probably sell it? If they sell it, is there a certain amount of equity, or perhaps other assets we can help preserve, that the homeowner really wants to make sure remains for them?

The goal is that I’m trying to understand them.

Their life. Their finances. Their priorities.

And often, their family and advisory system around them.

Because there is an entire human life wrapped around every one of these numbers.

The Numbers Don’t Tell Me What’s Really Going On

Maybe the mortgage payment is making retirement feel tighter than they expected.

Or maybe they’re doing perfectly fine today, but every time the house needs something they have to pull another chunk of money out of their investment portfolio, and they’re starting to think, I really don’t want to keep doing this.

Maybe someone has just received a major medical diagnosis and they’re quietly trying to prepare financially for what could be ahead.

I’m obviously not going to bluntly ask, “So, any major medical diagnoses lately?”

But open-ended questions create space for clients to tell us what is happening in their lives when it’s relevant. If something like that comes up, suddenly I know that access to a growing line of credit in the future may be incredibly valuable to them.

Maybe the house needs repairs.

Maybe they finally want to remodel or retrofit it for aging in place.

Maybe they want to help a child through a divorce, pay a grandchild’s college tuition, or help someone they love buy a home.

Or maybe they’re terrified of running out of money.

They can see where the numbers are headed, they don’t know where to turn, and on top of that, they resent the idea of getting a reverse mortgage.

That is incredibly valuable information for me to know.

Because now my job isn’t simply to show them numbers.

Part of my job may be helping them work through the guilt or shame they have attached to using home equity and helping them see the incredible asset they spent decades creating for what it is:

An asset that may be able to serve them during their retirement years.

Then there is the other end of the spectrum.

Maybe leaving the physical house to their children is incredibly important to them. Or maybe their kids have already said, Mom, please sell that thing when you’re gone. None of us want it.

These things matter. A lot.

And even when a client tells me, “I’m never moving, so I don’t care what the loan balance is,” I still care about the long-term equity position.

Why?

Because plans change.

Even if 100% of my clients told me they planned to remain in their homes until they died, a certain percentage of them simply won’t.

Some will eventually sell to move closer to family. Some will need a higher level of care. Some may decide the house no longer works for them. Others may need access to more equity than their reverse mortgage can provide.

After doing these loans for as long as many of us have, we know that “I will never sell this house” does not always end with someone never selling the house.

And wow, can the loan choice and structure we make today affect the options someone has 10 or 20 years from now.

That’s why I believe we have a responsibility to keep an eye on the whole picture—even when the client initially tells us not to worry about one particular piece of it.

Sometimes Getting What You Asked For Isn’t Actually Winning

That gets completely missed when we’re just taking orders.

Let’s say someone calls and says:

“I want $100,000.”

Okay. Maybe I can structure the reverse mortgage to give them $100,000.

But before I do that, I have another question:

Why?

Do you actually have a use for that $100,000 right now?

Because maybe what they really mean is, I want to know I have access to $100,000 if I need it.

Those are two very different things and potentially two very different loan structures.

The homeowner doesn’t necessarily know that.

Why would they?

They don’t work in reverse mortgages every day.

I do.

That’s where our value comes in.

If you tell me you want $100,000, my job isn’t simply to figure out how to hand you $100,000.

My job is to explain what taking that money today may do to everything else.

Maybe taking more money today means less is available later. Maybe the client doesn’t actually need $100,000 once we eliminate their required monthly mortgage payment.

Maybe having access to a larger line of credit later in retirement gives them far more security.

Maybe monthly payments better accomplish the real goal.

Maybe preserving equity is extremely important.

Or maybe, after understanding the entire picture, taking the $100,000 today really is the best decision.

Great.

Then let’s do it intentionally.

That is very different from doing it because somebody asked me to email them a quote showing $100,000.

My Job Is to See the Whole Picture

One of the questions I specifically ask clients is whether eliminating their current required monthly mortgage payment would be enough to accomplish what they’re trying to achieve.

If the answer is no, we go deeper.

Is there debt we need to pay off? Is there a big bill keeping them awake at night? Do they actually need and want better monthly cash flow? Would a line of credit help them feel more secure? Is there a specific amount of cash they need at closing?

What is the money for?

And importantly:

Which of these things matters most?

I actually ask clients to prioritize the different things they want the loan to accomplish because those priorities help me structure the loan around their life instead of structuring their life around the loan.

That distinction matters.

Two homeowners can be exactly the same age, own homes worth exactly the same amount and owe exactly the same mortgage balance—and I may give them completely different recommendations.

And both recommendations can be right.

That’s where the advice comes in.

When I receive a competitor’s quote showing the maximum amount of cash available at closing, I’ll ask the client:

“What were you planning to do with all of this money?”

And every so often the answer is essentially:

I don’t know. That’s just what the quote showed.

I’m going to tell you right now:

That loan officer is probably losing that loan to me.

And I would ask the loan officer sending quotes like this:

Why are you wasting your own time?

You’ve reduced yourself to a PDF.

If all we do is send numbers, then of course consumers are going to compare us based on numbers.

We’ve given them nothing else to compare.

Sometimes My Advice Is: Don’t Do This.

This is something I wish our industry talked about more.

I don’t go into every conversation assuming a reverse mortgage is the answer.

I’m trying to determine whether it’s the answer.

There are situations where I may look at the whole picture and say, “I don’t think this is the right move.”

There are other times when I absolutely believe a reverse mortgage makes sense, but the structure the homeowner initially requested doesn’t.

And honestly, clients frequently don’t know what’s possible.

That’s part of why they called us.

Don’t be afraid to tailor the loan to what someone actually wants and needs, even when it isn’t exactly what they initially asked for.

Often, what a client thinks they want isn’t the goal at all.

It’s simply the first solution they came up with.

That’s why we ask questions, and then another question, and keep digging until we understand not only what someone is asking for, but why they’re asking for it.

I want to understand their goals today, throughout retirement and ultimately at the end.

I want to understand their sensitivities around debt and money, how they feel about their home, what they hope to leave behind as well as what they are trying to protect.

I want to get as close as I reasonably can to standing in their shoes before I recommend what to do with one of the largest assets they have spent their lifetime building.

That is a very different job than generating a quote.

And Can We Please Make This Stuff Easier to Understand?

This is also why I’m such a fan of what Dan Hultquist has done with Reverse Plus—but that’s probably another blog.

The graphs are cleaner, the amortization schedules are easier to follow, and the information is simply easier to explain.

I love that because our presentations shouldn’t be designed to prove how smart we are.

They should be designed to make our clients feel smarter and more confident about the decision they’re making.

A homeowner shouldn’t leave a reverse mortgage conversation impressed that I know what “principal limit” means.

They should leave knowing what it means.

That’s the entire point.

Want to Improve the Reputation of Reverse Mortgages? Start Here.

I’ve spent a lot of my career wanting to help elevate the reputation of reverse mortgages, and I don’t think we accomplish that with boilerplate, fast, easy, cheap quotes.

We accomplish it one homeowner at a time by being careful, curious and genuinely interested in understanding their world.

We accomplish it by tailoring solutions to the actual human being in front of us instead of assuming everyone with the same age and home value needs the same thing.

Only when we understand someone’s entire picture can we responsibly recommend what they should do with such a major piece of it.

And interestingly enough, I think that also gives us the best chance of earning their business.

When you explain the tradeoffs instead of simply presenting possibilities, when you’re willing to tell someone that the thing they’re asking for may not actually be the thing that serves them best, and when a client can feel that you are genuinely trying to understand their life before recommending a loan, you stop being another quote.

You become an advisor.

Technology can generate numbers.

Software can generate proposals.

AI can compare options.

But none of those things replace our responsibility to understand the human being sitting on the other side of the transaction.

So Stop Taking Orders.

Don’t ask for the DOBs, home value and mortgage balance, spit out a PDF filled with “principal limits” and “mandatory obligations,” and wait for a senior homeowner to figure out what questions they’re supposed to ask.

Ask the questions first.

Understand the person, their life, their goals, what they are trying to accomplish and what they are trying to protect.

Understand what could be gained—and what could inadvertently be sacrificed.

Then give the advice.

This is not just the right thing to do, it’s also the path to closing more loans, building better relationships and continuing to elevate the reputation of the reverse mortgage industry.

And the better we get at doing that, the more retirees will be able to see a reverse mortgage for what it is:

A highly customizable financial tool that can enhance their retirement plan.