Reverse mortgage veteran reflects on his career: ‘Everyone has a story to tell’

Chris Clow/RMD: Jim, you were a real estate agent and then a mortgage professional before jumping into the reverse arena. You haven’t even been in the business for twenty years. Is it fair to say you’ve seen the highs and lows?

Jim Cullen: Yeah, definitely. To be honest, I made the switch to reverse mortgages not because of anything I initiated. Our area manager at Wells Fargo approached me in June 2004 and asked if I had ever considered taking out a reverse mortgage.

I hadn’t really thought about it because I didn’t know much about it. We had a guy in the neighborhood who was our reverse mortgage advisor, and she said, “I think this is something you could be really good at.”

So I did my homework and some research, and I decided to give it a try. In August 2004, I went to Boston for a week of reverse mortgage training. Wells Fargo has had very good and thorough training; it was a solid week because you only had to focus on reverse mortgages. There was no mix and match with term mortgages, which I liked because it allowed us to focus on what we were going to do.

Clow: What impact did Wells Fargo’s departure from the company have on you?

Cullen: Wells was rescued in the summer of 2011. A whole group of us switched to MetLife, and thought it was a good move. However, eight or nine months later, in April 2012, MetLife was also bailed out. I had to make a few moves. I never took a step myself; it was always the bank or whoever decided to get out of the reverse program.

That was disheartening because it’s a good program, but if they weren’t making enough money or had other reasons, they decided there was no need to continue. It is clearly a niche product. Despite this, I made a few moves, but always stuck to it. I always told myself that once I started reverse mortgages, I would never go back to term mortgages. Future mortgages are a nest of hard hornets, and I’m glad I never went back. It was smart to stay in the upside down business.

Clow: Much has been said about the reverse mortgages that emerged in the wake of the financial crisis, but the HECM program itself has undergone quite a few changes since then. How do you compare today’s product to what it was then?

Cullen: Clearly, the safety measures that have been put in place have likely protected and preserved the product. But to me, the absolute biggest problem right now – despite skyrocketing property values ​​and other factors – is the focus solely on the HECM program.

Being in Wisconsin and almost everything coming from this state, we didn’t have any of our own products. The only option at the time was the Financial freedom Cash Balance Plan, which you have to be an old timer like me to know about. But all new proprietary products are not available in Wisconsin, so we operate strictly on the HECM program.

Right now, with the main limit factors where they are, especially with younger borrowers (in their 60s to mid-70s), you crunch the numbers for people and they see that main limit. They calculate in their heads, “Okay, my house is worth this much and this is what I can get out of it, and it’s going to cost me this much to do it.” It is heavy. It’s very, very difficult.

I think our friends at HUD [the U.S. Department of Housing and Urban Development] We need to look at this and find a way to counteract the key limiting factors. I don’t mean give away the farm, but I think the cap limits are so low right now that it’s very difficult to make trades work.

Clow: What is your favorite memory of your time in the reverse mortgage industry?

Cullen: Well, I mean, generally speaking, it’s obviously the people – the customers that you serve. This is not like a traditional mortgage where it is ready so quickly. With the reverse mortgage program, with the HECM program, it takes a little longer and you develop a relationship with these people.

Before you do anything, determine why they are thinking about a reverse mortgage and what they want to achieve. Can we do that? Can we make it work? You develop a relationship and they have to trust you because this is a big deal to them. You don’t just fly in and say, “Wham, bam, see you later.” That won’t work. You really have to develop that relationship.

I’ve made hundreds and hundreds of loans, and everyone has a story to tell. It’s crucial to get to know that story and understand what they do. When you finally get to the closing table, sign that last piece of paper and see the relief or joy on their faces, it is incredibly rewarding. They often feel that they will be in a much better financial position. It’s something emotional. You can be very objective and deal with everything in black and white, but there is a lot of subjectivity involved in this process.

On a general level, that’s what it’s about: the people you serve and the people you work with. Our industry is quite small in the grand scheme of things. Over the years you get to know people both inside and outside your organization. It’s almost like joining a club: the reverse mortgage club. It’s a nice thing that way.