Sarah
Wolak:
A
lot
of
the
conversation
in
the
past
year
has
been
about

potential
improvements
in
the
HECM
space.
What
specific
changes
would
you
like
to
see
that
would
better
serve
today’s
borrowers?

Loren
Riddick:
I
would
say
the
first
thing
is
that
I’m
very
thankful
for
the
program,
and
I’m
extremely
aware
of
the
three
amazing
components
that
mortgage
insurance
offers.
Obviously,
one
is
the
protection.
If
lenders
know
they’re
100%
covered
and
that
those
IOUs
stacking
up
are
protected
—
as
long
as
they
follow
the
rules,
they’re
going
to
get
their
money
—
that’s
paramount.

Then,
of
course,
there’s
the
nonrecourse
feature.
That’s
awesome
for
the
family,
along
with
the
fact
that

heirs
are
guaranteed
5%
equity.

Now,
that
being
said,
we
are
very
much

in
the
black
in
relation
to
the
Mutual
Mortgage
Insurance
Fund
for
reverse
—
very
solid.
To
ask
a
client
who
has
a
$1
million
property
and
just
wants
to
set
up
a
line
of
credit
as
a
great
financial
tool
—
which
it
is
—
to
pay
about
$30,000
to
$37,000
in
closing
costs
because
they
have
a
$20,000
mortgage
insurance
premium
on
barely
a
10%
LTV
just
doesn’t
feel
right.

There
have
been
some
suggestions
to
raise
the
annual
MIP
or
maybe
stairstep
the
front-end
MIP
as
it’s
used.
If
a
client
isn’t
going
to
take
a
draw
at
closing,
maybe
they
only
have
a
half-percent
MIP.
Then,
when
they
reach
the
maximum
of
what
they
can
access,
the
rest
of
it
would
be
fulfilled
into
the
fund.
That’s
one
thing
specifically
related
to
the
mortgage
insurance
situation
that
I
hope
somebody
hears.

I’m
not
a
big
fan
of
HECM-to-HECM
refinances;
I
feel
like
that’s
eating
our
young.
As
an
industry,
we
shouldn’t
be
doing
it
unless
it
truly
is
justified
for
the
client.
Churning
that
business
isn’t
good
for
the
industry,
and
it’s
not
good
for
clients
to
continue
paying
closing
costs.
I
would
like
to
see
the
fund
adjusted
so
that
when
somebody
does
need
to
do
a
HECM
refinance,
there’s
some
mortgage
insurance
paid
into
the
fund.

If
somebody
really
cares
about
the
industry,
they’re
playing
the
long
game.
They’re
building
their
business.
The
phone
rings
because
they
take
care
of
people,
and
they
do
a
good
job,
and
they’re

out
on
the
front
lines.
I’m
talking
about
the
bottom
feeders
that
want
to
churn
as
many
reverses
as
they
possibly
can.
All
the
hard
work
has
already
been
done,
and
now
they
come
along
and
refinance
a
client,
go
back
to
the
well
again
and
again.
That’s
not
good
for
our
industry;
it’s
not
good
for
anybody.

Wolak:
In
what
instance
would
a
reverse
mortgage
refinance
make
sense?

Riddick:
Let’s
just
say,
in
your
hometown,
there’s
a
mortgage
professional
who’s
been
there
for
two
or
three
decades,
with
five-star
reviews
you
read
about.
Then
you
compare
their
services
and
pricing
to
a
1-800
number
in
a
200-cubicle
building.
Which
one
is
going
to
give
better
service?
The
local
guy.

Now
here’s
the
big
question:
Is
the
local
guy
going
to
be
way
cheaper
than
the
1-800
guy,
or
is
it
going
to
be
the
exact
opposite?
The
local
one
would
probably
be
more
expensive,
and
there’s
a
reason
for
that.
There’s
a
reason
people
pay

5%
to
6%
to
a
real
estate
professional
instead
of
doing
a

for-sale-by-owner.
There’s
a
difference.

So
what
happens?
Let’s
say
someone
goes
to
that
local
professional
and
does
a
forward
loan,
and
let’s
say
he
gives
them
a
5.875%
rate.
Then
three
months
later,
some
bottom
feeder,
because
he

bought
a
lead
from
the
credit
bureau
or
whoever,
goes
right
behind
that
deal
and
calls
the
client
and
says,
‘Hey,
I
can
get
you
a
5.25%
interest
rate.’

They
didn’t
sell
anything.
They
didn’t

educate.
They
haven’t
talked
to
anybody.
They
just
offered
a
better
rate.

What
happens
then?
Two
things:
No.
1,
they
close
that
loan,
and
the
local
guy
who
busted
his
butt
gets
charged
back
the
commission
he
made.
So
it
churns
that
book
of
business,
it
hurts
the
tried-and-true
pro,
and
it
hurts
the
industry
because
the

investor
who
bought
the
loan
initially
didn’t
even
get
three
payments
out
of
it.
In
my
experience,
a
reverse
was
meant
to
stay
on
the
books
for
eight
to
10
years.

Wolak:
In
May,
you’re
one
of
the
hosts
of
the

Reverse
Mastermind
Summit,
which
I
understand
is
going
to
focus
on
sales
training.
Is
this
scenario
something
you’re
going
to
be
speaking
about?

Riddick:
Definitely,
if
it’s
brought
up,
we’re
going
to
mention
it.
And
there
is
a
place
for
best
practices.
There
is
an
amount
of
ethics
that
needs
to
be
involved
with
this
program.

But
the
primary
focus
of
the
summit
is
to
give
back
to
our
industry.
We
wanted
to
collectively
collaborate
to
enhance
the
awareness
and
excitement
for
the
reverse
industry
and


NRMLA
membership.
It’s
kind
of
like
my
love
letter
to
the
industry
and
the
reverse
program
[because]
it’s
been
so
good
to
my
family,
to
my
clients
and
to
my
community.
I
think
the
focus
is
also
to
inspire,
motivate
and
equip
loan
officers
who
want
to
get
in
reverse,
do
it
the
right
way
and
learn
from
the
best
of
the
best.
Most
of
us
had
to
go
through
the
jungle
with
a
machete
because
we
didn’t
have
a
mentor
—
and
that’s
one
of
the
biggest
challenges
of
our
industry.

This
particular
conference
is
for
anybody.
Even
for
a
veteran
professional
like
me,
I’m
going
to
be
in
the
front
row
taking
notes
like
everyone
else.
Because
there
are
a
lot
of
people
who
have

misconceptions.
Let
me
ask
you
this:
A
real
estate
agent
goes
to
a
listing
and
he
or
she
determines
that
there
are
12
years
left
before

Wells
Fargo‘s
paid
off.
The
question
is,
who
owns
that
home
until
they
pay
it
off,
the
bank
or
the
client?
Ninety-eight
percent
will
say
the
bank,
but
we’re
all
wrong.

I’ll
tell
you
why:
Imagine
somebody
rings
the
doorbell
to
that
home
and
slips
on
a
block
of
ice
or
a
banana
peel.
Are
they
suing
Wells
Fargo
or
the
homeowner?
They’re
suing
the
homeowner.
If
a
Realtor
says,
‘I
want
to
get
you
top
dollar
for
your
home,
but
we
need
to
update
your
kitchen,’
you
don’t
call
Wells
Fargo
to
get
permission
to
do
that,
right?
A
mortgage
isn’t
some
three-headed
monster.
It’s
just
a
mortgage.

Wolak:
There
is
a
lot
of
skepticism
in
the
space.
How
can
that
narrative
change?

Riddick:
People
will
say,
‘You’re
telling
me
that
someone
can
do
a
purchase
on
a
$700,000
house,
and
they
put
down,
you
know,
$400,000,
and
they
have
no
payment
on
that
$300,000
they
borrow
for
the
rest
of
their
life?
Man,
that
sounds
too
good
to
be
true.’
That’s
the
job
of
the
professional
to
step
in
and
help
them
understand
that
in
1987,

Congress
developed
a
program
that
allowed
senior
Americans
to
redistribute
their
wealth
through
their
equity
in
a
better
way.

There
are
10,000
to
12,000
seniors
turning
62
every
day,

trillions
of
dollars
in
senior
equity,
and
yet
over
95%
of
our
peers
don’t
even
know
what
HECM
means
in
the
forward
world.
So
again,
the
Mastermind
Summit
is
all
about
giving
that
empowerment
the
right
way
to
our
industry. 

There’s
a
phenomenon
going
on
right
now
in
our
nation
that’s
near
and
dear
to
my
heart,
and
that
is
when
a
home
becomes
a
house.
Think
about
this
for
a
moment:
You
probably
have
a
widow
in
your
town
right
now
who
has
a
$700,000
home
and
owes
$300,000,
despite
paying
$2,000
a
month
on
that
mortgage.

The
home
has
become
a
chore.
There’s
a
yard
to
mow,
stairs
to
climb
and
she
isn’t
using
nearly
all
the
space.
Most
importantly,
she’s
walking
past
her
husband’s
favorite
chair,
and
he’s
not
there
anymore.
That
home
has
become
a
house.
And
God
help
her
—
$2,000
on
a
fixed
income
was
probably
tough
for
both
of
them,
but
now
she’s
left
to
handle
it
alone.

She’s
praying
for
help
and
she
doesn’t
even
know
where
it’s
going
to
come
from.
Here’s
the
reality:
She
has
$400,000
in
equity
—
$700,000
value
minus
$300,000
mortgage
—
but
she
can’t
take
it
with
her
when
she
dies.
All
of
that
equity
is
at
risk
to
the
market
or
the
nursing
home
owner.
And
here’s
the
biggest
question:
When
is
she
going
to
pay
that
$300,000
off
if
she’s
75?
She
probably
never
will.
Yet
we’ve
all
been
taught
to
believe
that’s
the
way
it’s
supposed
to
be
—
and
it’s
not.

Here’s
what
happens:
We
empower
the
mortgage
professional
and
real
estate
professional
to
list
the
$700,000
home,
pay
off
the
mortgage
and
sell
it.
Then
we
structure
a

reverse
purchase
—
part
cash,
part
loan.

What
happens?
We
save
that
woman’s
life.
She
goes
from
being
a
prisoner
in
a
home
that
became
a
house
to
eliminating
her
mandatory
mortgage
payment.
She
now
gets
to
live
on
that
$2,000
a
month
instead
of
paying
it
—
$24,000
a
year
in
tax-free
income.
She
can
buy
a
$600,000
home
or
condo
with
no
payment
for
life.
The
client
loves
it,
the
Realtor
loves
it,
and
their
job
just
became
much
easier. 

And
here’s
the
best
part
for
the
mortgage
professional:
When
there’s
no
traditional
loan
and
it’s
a
cash
deal,
we
still
make
money.
For
the
first
time
in
the
history
of
our
game,
the
client
wins,
the
Realtor
wins
and
the
mortgage
pro
wins.
And
hardly
anybody
knows
this
is
even
possible.
That’s
why
I’m
so
thankful
for
what
we
do.