Question About Reverse Mortgages


1000 Post Club
Columbia, MO
I have had some clients ask me about reverse mortgages.

Anyone out there look into them?

I have been cruising around the internet looking at some facts here and there but though I would come to the think tank and see what surfaces.
Reverse mortgages are a viable, but expensive and last resort solution to someone's limited cash flow problem. For the individual 62 or older who wants to stay in their home but can't afford the taxes and other upkeep, using their equity via a RM can allow them to do this.
I have contacted 2 places, financial freedom and WSB mortgage.

WSB wants you to be an employee and Financial Freedom is more of a referral program that will pay you a marketing fee for clients. I am leaning to the latter since I want to focus on insurance, and not get too much on my plate.
Most states require LO's (loan officers) to be W2 employees. This is a legal requirement more than anything. Doesn't mean you have to work there full time.

A lot depends on your comp and how much involvement is required on your part.

I do 1 - 2 loans per year (not reverse, the typical mortgage) for clients when asked. Good money, about $3k per deal, but takes a lot of my time from start to finish.

I have asked about just doing a referral and the broker I work with wants me to do just as much work for a referral as I would as an LO.
I talked to financial freedom and they have a marketing bonus that they average out quarterly. All I would have to do is refer people to him, he would process and close the deal, then each quarter I get a marketing fee.

Sounds like a good plan. The guy I met with seemed to really know his stuff. I was mainly just looking for a referral source.
Reverse mortgages are not always the best choice for seniors that have financial burdons. A life settlement can be a better option. With the LS they no longer will have the premium to pay, plus they will get the lump cash sum. Most LS companies offer a finders fee, but do your due diligence on the company before working with them.
You really need to do the research on RMs before recommending them. I have an "after the fact" case where one of the kids essentially pressured the mom to do it. It was completely unnecessary, ended up costing the house.

Certainly they can work in situations where there are replacements for the asset (insurance) or no need to provide an estate. Otherwise, a VERY expensive option. The initial fees alone are enough to kill a horse.