13 Steps How To Become A Reverse Mortgage Broker (Complete With Pictures)

(doylc.com) How to Become a Reverse Mortgage Broker - One of the newest forms of mortgage modification processes is converting a traditional mortgage into a reverse mortgage. This type of financial planning tool allows those who have equity in a home or other property to take out that equity in the form of available funds. Unlike a traditional mortgage, which allows a homeowner to buy a home by making payments on the loan over time, a reverse mortgage is a loan that can provide a homeowner with funds against the value of their property . US Consumer Financial Protection Bureau US government agency that protects consumers in the financial sector Go to Source These mortgages are for older homeowners and allow them to Postponing payments until they die, sell, or move out. With many homeowners of retirement age interested in reverse mortgages.

• How To Becoming a Mortgage Broker

1. Get the right education. To be a mortgage broker, you will need to have a strong background in finance, real estate transactions and law, as well as the ability to communicate well both orally and in writing. Not only do you need to understand the way mortgage rates are set and change, but you also need to be able to explain that to your clients. If you can attend a college with a business program, that could certainly be helpful, but as long as you have the right background, you should be able to get started on the process.

In addition to schooling, you will also need a background in sales and marketing and probably banking as well. Specifically, you need to understand the credit report and credit score. These are important issues that you, as a broker, need to navigate your clients through. You can get this information through the school or by working with banks and credit institutions.

2. Learn your state's rules. Each state has its own rules and requirements for licensing, so you'll need to find out what's required for the state you want to work in. These licenses are usually covered by the state's Commerce Department or similar department. Differences in state laws include whether you need a license, what types of mortgages you can issue, and whether you must have a physical office in the state.

The Nationwide Multistate Licensing System & Registry (NLMS) system lists each state's licensing requirements.[1]

3. Apply to NLMS. The NLMS helps regulate and license mortgage brokers nationwide, and if you join, you will be placed into the national system. NLMS certification is a requirement for becoming a mortgage broker. There are a number of steps you need to take to join, each of which also includes a shipping or registration fee.

They must undergo a background check that involves submitting official fingerprints. If you have stored fingerprints in the NLMS that are less than 3 years old, you do not need to get a new fingerprint. You should know the results of your background check within 48 hours.

Take required classes. Through the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), the federal government requires 20 hours of approved education that includes 3 hours on Federal laws and regulations, 3 hours of ethics, 2 hours of training for standards, and 12 additional hours on mortgage origination.

Pass the NLMS exams. The licensing exams from the NLMS are full-day tests, covering both federal and state regulations. You will need a pencil and calculator to work with, and perhaps other items depending on your state's requirements. You need a 75% score to pass the exams, and you should get the results within one to two weeks after taking the tests.

4. Apply for a state license. Once you are certified by NLMS, you must obtain a license from the state where you wish to work. Each state has a different office that you must contact for the license. Some states, like California, have multiple offices where you can register. As with NLMS registration, these licenses will likely require a background check, as well as proof of citizenship, insurance, surety bond, and additional educational requirements beyond those listed in the SAFE Act.

5. Maintain your license. You must renew your broker license annually. Other requirements and fees vary by state, although you can do many of these through the NLMS. Make sure you can access your online account via NLMS, which will speed up the process. From November 1st, you can request an extension through the system. Once you submit the request, your state agency will be notified, review your request, and report any issues found. At this point, your state is responsible for your renewal application

Organizations can request licenses on behalf of their individual licensees. If you work for another company before starting your own, check with your company to see if they will do it for you.

• How To Working With Reverse Mortgages

6. Requirements of the research state. Each state has its own rules for reverse mortgage brokers, and some may include specific background checks or other requirements. In North Carolina, for example, every lender making a reverse mortgage loan must be certified by the state's Commissioner of Banks. You must fill out the appropriate forms, complete a $100,000 security deposit, and pay a $500 application fee.

If you receive government certification, be sure to have it ready. The federal government warns seniors to be on the lookout for dishonest lenders who try to scam them or force them into buying unnecessary products they can't afford. Being able to easily reference your license credentials will help put your customers' minds at ease and boost your credibility.

7. Get trained in reverse mortgages. Because these are special types of mortgages, you need special training to sell reverse mortgages. The length and requirements of each course vary greatly by your state, although most content is managed by the Federal Housing Administration (FHA).

In these courses, you will learn the requirements for getting a reverse mortgage loan and how to talk to your prospects.

You can find a range of programs through training companies advertised in newspapers and online, and through local institutions such as community colleges. You will be able to get good education from many of them. Just make sure you check the company's background to make sure it's legit. Being a member of a group like the Better Business Bureau bodes well.

Some companies offer your training and guarantee employment upon completion. These are probably your best option as they have lender connections and prior experience.

The National Reverse Mortgage Lenders Association (NRMLA) offers additional continuing education credits at their annual meeting. The 8-hour coursework covers topics such as regulatory changes, understanding customer needs, consumer protection, and financial risk assessment.

8. Join the NRMLA. The National Reverse Mortgage Lenders Association is a professional organization that seeks to establish ethical and professional guidelines for reverse mortgage lending. As a Certified Reverse Mortgage Professional (CRMP), you will receive an additional qualification to convince potential customers of your trustworthiness and professionalism. To become a CRMP you need to follow several steps.

Must have 3 years of reverse mortgage lending experience, provide a letter of recommendation from an executive, complete an NRMLA ethics course, an Elderly Abuse Prevention, Detection and Reporting course and 12 credits of continuing education.

Apply through the NRMLA website, including the application form and a $250 application and exam fee.

Once your application has been approved, you can take the exam. The exam consists of 120 multiple-choice questions that you have 2 hours to answer. You will be informed after completion whether you pass the exam. You may retake the exam after failing it, after a six-month waiting period and a $195 retake fee.

Once you pass the exam, you must pass a background check, after which you pay a $175 fee to receive your certification.

To maintain your status, you must pay an annual renewal fee of $175.

9. Find a job. While it can be helpful to have a background in mortgages, the most important thing is to demonstrate a willingness to work with the elderly, or other high-need groups. Generally, you will already have experience in mortgages before becoming licensed for reverse mortgages, so you'll need a connection to the financial services industry already.

Age is generally not a restriction when it comes to working with reverse mortgages. While many brokers are seniors themselves, someone in their 30s with the right communication and empathy skills can be quite successful. Being patient and able to relate to your clients is more important than your experience.

This is currently considered a growth area as more Americans reach the age where they are eligible for a reverse mortgage. Many lenders are beginning to offer reverse mortgages and will need the brokers to do so. Even if you're not hired immediately, open positions will still appear if you have the right attitude and skills.

Not all lending institutions can issue reverse mortgages. For example, in Massachusetts, you must work with licensed reverse mortgage institutions. Other financial institutions in the state cannot issue them, so you must be working for someone with a state license.

10. Have the right attitude. As a reverse mortgage broker, you have to be patient. Many clients will approach you about a reverse mortgage just for more information. You won't immediately be ready to apply or sign anything. They may even want to wait six months, a year, or even longer before committing. You will work with older clients who do not respond well to pressure to sell.

Some of your customers may be at home or have unusual opening hours. In addition to patience, you must also have the flexibility to visit their homes and answer questions in the evenings or weekends.

Another important part of working with reverse mortgages is a willingness to educate your clients. There are many misconceptions and misinformation about reverse mortgages, and you need to break them down to reach your customers and help them understand why a reverse mortgage is (or isn't) the right decision for them.

11. Build relationships with consultants. In order to obtain a reverse mortgage, prospective clients must go through a counseling process approved by the United States Department of Housing and Urban Development. These services help homeowners understand the ins and outs of a reverse mortgage and ensure they are in a good paying position.

If someone comes to you for a reverse mortgage, you must refer them to an advisor before proceeding. Make sure you know the Approved Consultants in your area so you can refer clients to them. It's good to know the best ones so your clients get the best advice possible.

12. Find out more about the people who want reverse mortgages. Only certain people are allowed to apply for reverse mortgages, and for some, a reverse mortgage is not the right decision. Make sure you know who qualifies for a reverse mortgage so you don't waste your time working with someone who doesn't qualify. Additionally, by understanding why someone might want a reverse mortgage, you can better ensure that you are providing the best service.

You can take out a reverse mortgage on single family, 2-4 unit, manufactured homes (built after June 1976), condos, and townhouses. You can't take one out in a co-op.

To take out a reverse mortgage, each owner must be at least 62 years old and own your home. Lenders will assess the borrower to make sure they are financially able to continue paying things like property taxes and home insurance, and they may enforce certain reserves to ensure those fees are paid. This group of people usually has a fixed income, which is usually drawn from a pension fund and social security. As a broker, you want to be familiar with your client's finances to ensure they can meet those obligations.

If your client intends to leave the house in 2 to 3 years or wants to leave the house to children, a reverse mortgage is probably not a good decision. It gets expensive and could result in a lien being placed on the home after the owner's death.

13. Start your own brokerage business. Many brokers and loan officers remain in their positions, and there isn't much room for advancement. If you are looking to take another step in your career, you may consider starting your own brokerage business. Make sure reverse mortgages are part of your planned niche, get the credit you need, and register your business with state and local government agencies.