Tampa Bay Reverse Mortgage Radio
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Jamie: We’ll be talking about reverse mortgages with regular contributor, Malcolm Tennant.
Josh: A well-known guy.
Jamie: Yes, he is. He’s been with me for quite some time and I always get a lot out of these interviews. So, let’s take up no more time and go ahead and bring him and his son, Scott, to the discussion. Malcolm Tennant is co-founder of Access Reverse Mortgage. For homeowners aged 62 or older, a reverse mortgage from Access Reverse Mortgage is a safe, economical way to turn your home’s equity into cash or monthly income. They are A+ rated by the Better Business Bureau and Florida’s leading reverse mortgage provider. Malcolm and Scott, welcome to the program today.
Scott: Thank you.
Malcolm: Thanks, Jamie.
Jamie: So Malcolm, I’ll start with you. I mean, business ten plus years. Tell me a little bit about the history of the business.
Malcolm: Yes, Jamie. We, when I say we, my family, my wife, two of my sons, got together a little over ten years ago and started in the reverse mortgage business. It was very much a fledgling industry at that time, even though the product’s been around 25 years it was not very well-known. We’ve been through a lot of ups and downs in the last ten years. Several thousand companies have come and gone since we started. But we’re still there.
Jamie: You said reverse mortgages have been around 25+ years. These came out in the 1980’s, right? Was this something that Ronald Reagan brought to the table?
Malcolm: Exactly. It was designed by FHA and AARP, signed into law by Ronald Reagan in 1988.
Jamie: Okay. And what got you into the reverse mortgage business? Did you have a background in providing just typical purchase mortgages? Or what was your background?
Malcolm: No. I’ve never done a regular mortgage. Actually, I have no background in that. But through a friend of mine who’d been in the business for a number of years, it got me interested in it and that’s how we got started.
Jamie: Okay. And I’ll come over to Scott, here. Your son, Scott. Tell me about your role within the company.
Scott: I do a little bit of everything really. It’s kind of all aspects of the company, everything from IT to marketing. There’s probably nothing that I haven’t done. Originate loans, talk to customers, and handle processing of loans.
Jamie: This is a strictly family-owned business. Correct? I mean, how many different people are involved in your business today?
Malcolm: Well, we’ve got about ten loan officers around the state of Florida. But pretty much everybody who originates loans in the Tampa Bay area is family. It’d be Scott, myself, my son, Sean, or my wife, Pam.
Jamie: Okay. So, for people that are unfamiliar let’s go with the basics of a reverse mortgage. And, what is a reverse mortgage?
Malcolm: Well, a reverse mortgage is just like any other mortgage. People tend to way over think how the product works. It’s very simple. A reverse mortgage, you’re borrowing money. You’re using your home as collateral. You get a statement in the mail each month, it tells you how much you owe, tells you how much interest was charged the month before. The first big difference with a reverse mortgage is there’s no obligation to pay anything when you get that statement. (Remember, though there is no monthly mortgage payment required, the borrower must continue to pay property taxes, insurance, association fees, and any applicable ground rents as well as maintain the home, or they would be subject to foreclosure. Also remember, this is a loan, so eventually it must be repaid.) So other than that, it’s the same as a regular mortgage. It might be a line of credit. It might be used to purchase a home. There are different aspects to the reverse mortgage. But it’s just a loan.
So when the day comes to sell the house, and that might be in five years when I decide to move or in 25 years and now your kids are dealing with it, the house gets sold. The mortgage gets paid off, whatever the balance is. The interest that’s charged each month, you don’t have to pay it every month so it’s added to the balance. So your loan amount goes up a little bit each month. Second big differences other than you don’t have to make a monthly payment with a reverse mortgage is that when the day comes to sell the house if there’s more owing on the property than the house is worth then there’s no obligation to the borrower to pay that. FHA steps in and pays the shortfall.
Jamie: Sort of like FHA does for first-time buyers. They insure lenders in the event of a default. So they’re basically insuring the lenders in the event of the property being upside down at that point, and so the lender is then protected. So you’re under minimal risk of a foreclosure with a reverse mortgage. The things that you hear in the news, the bad news and stuff, the foreclosures on Grandma come from their inability to pay property taxes and their insurance or something. Explain some of the myths out there around this.
Malcolm: Yeah. I mean, that’s exactly right. We went through the market crash which was an unusual time, and that’s created some odd circumstances now. But if you think about it, people who got a reverse mortgage back in 2006 or 2007 at the peak of the market, maybe at a $300,000 house, they borrowed maybe $160,000. Now maybe they owe $180,000 because interest has been added. And meanwhile, the house dropped in half in value. So that $300,000 house is worth $150,000. They owe $180,000. The people die, well if they had a traditional mortgage the heirs would be on the hook for the $30,000, or the estate would, for that shortfall. With this, it’s guaranteed by FHA. FHA is going to pay the shortfall.
So the problem with the press with reverse mortgages is we make good headlines. But they’ve had a lot of cases where for one reason or another people have got in a situation they could no longer afford to pay even their property taxes and insurance. They have no mortgage payment but in some cases, especially with the flood insurance issue that came up recently, people got where they couldn’t afford even those small payments. Or they chose not to pay them for whatever reason. And that’s pretty much the only way you can get foreclosed on with reverse mortgages is not paying your basic property charges.
Jamie: Now what are the basic qualifications of obtaining a reverse mortgage? One, the homeowner has to be age 62 years old. Correct? Or they have to be somebody related to or married to somebody that’s age 62. Right?
Malcolm: One spouse has to be 62.
Jamie: Right. Because that was a recent rule change I think we had talked about where the spouse can now be as young as 18 years old as long as the other spouse is 62. Correct?
Malcolm: Yeah. And it’s funny because the downward limit is 18. Scott actually had a meeting this week with a…the wife was about his age.
Jamie: I told you if you ever get a situation where you have an 18-year-old with a 62-year-old, I definitely want to bring that in as a discussion point.
Malcolm: 1980 date of birth, anyways.
Jamie: So, all right. One of the spouses has to be at least the age of 62. But what are some of the other qualification points for obtaining a reverse mortgage?
Malcolm: So, really it’s similar to a regular mortgage but easier to qualify. You do have to generally have decent credit. If there’s credit issues we can probably still do the loan, but there’s going to be some limitations on it. Each case is different. You have to have some income. We have to be able to document some income just to show that it’s a sustainable situation. Then beyond that, the house has to qualify. So condos generally are difficult. We do them, but they can be difficult. But it’s really not too difficult to qualify for a reverse mortgage.
Jamie: Can you do them on mobile homes as well or…
Malcolm: We can.
Jamie: …they are eligible?
Malcolm: There are limitations, double-wides only, certain age, that sort of thing.
Josh: Oh, when you’re lending to people that are 62 they only have a few years until retirement. Is there any risk in lending to people that are that close to a fixed income?
Malcolm: Well, about half of our borrowers are already retired and about half are still working. But, no. There’s no risk to the lender because there’s no payment.
Jamie: That’s the biggest thing that’s kind of hard to understand.
Josh: I’m just trying to catch up because I’ve never even heard of reverse mortgage.
Jamie: You’ve never seen the ads…
Jamie: …on TV with the celebrity endorsements?
Malcolm: Fred Thompson.
Jamie: Yeah. Fred Thompson. He just recently passed as a matter of fact. So how do interest rates compare on a reverse mortgage?
Malcolm: Because FHA is guaranteeing the end value of the house to the investors who buy these loans, interest rates are very aggressive. They’re very competitive. You’ll find that interest rates, the lowest rates we offer are in the low twos right now. And FHA charges a fee on top of that. So cost of money, the lowest you can get is about 3.5%, a little under that. So, pretty competitive with what you’d see on forward mortgages.
Jamie: What’s it take in terms of time frame for getting a reverse mortgage done? Can you get these done in a couple weeks? Does it take a month? What’s the time frame for getting a reverse mortgage?
Malcolm: Industry average is 60 days, start to finish. From the time we have the documentation we need, which often we can get together within a day or two, typically we’re looking at about four weeks until they see money.
Malcolm: It can take a lot longer than that if there are delays. But because we’re based right here in the Tampa Bay area and we’ve done so many of these–we’ve done well over 1,000–we’re very expert at them and we do get them done very quickly.
Jamie: And then I want to stress that that’s all you do. I mean, there are a number of different mortgage professionals out there that incorporate the reverse mortgage to one of their lending products. Access Reverse, that’s all you do. So you’re an expert in that field. That’s your niche.
Malcolm: That’s right.
Jamie: So people can learn more about this over at accessreversemortgage.com. And coming back from the break, I’m going to talk with Malcolm and Scott about how you can use a reverse mortgage to purchase a home as well. So the reverse mortgage for purchase program when we come back to That Business Show with Jamie Meloni, where business becomes show business.
Jamie: Have you considered a reverse mortgage as part of your retirement financial plan? For homeowners age 62 or older, a reverse mortgage from Access Reverse Mortgage is a safe, economical way to turn your home’s equity into cash or monthly income. Access Reverse Mortgage is a family-owned company based right here in the Tampa Bay area for the past ten years. They are A+ rated by the Better Business Bureau and Florida’s leading reverse mortgage provider. Call 727-347-0305 or go to accessreverse.com to start your research today, NMLS #4566. That’s 727-347-0305.
Jamie: And we’re back to That Business Show with Jamie Meloni, where business becomes show business each weekday morning at 8:00 a.m. here on 1250 WHNZ. You can learn more about the program over at tampabayradio.com. Currently in studio with Malcolm and Scott Tennant, both with Access Reverse Mortgage. To learn more about them, accessreversemortgage.com. And Scott, I want to throw it over to you. I mean, you can use reverse mortgages for purchasing a new property. Explain how this process works.
Scott: Yeah, absolutely. It’s not a very well-known product. It just came out in 2009. We actually did the first one in the country for the other co-founder of the company. He had bought a house over in Bardmoor with it. So a reverse mortgage for purchase simply put, it’s just a mortgage. You’re combining a down payment with a mortgage to buy a house. The biggest difference starting out is the down payment is larger, so I’d figure 30% to 50% down depending on your age. The older you are the less you have to put down. And the second big difference would be that there’s no monthly mortgage payment required after closing. (Remember you still must pay property taxes, insurance, any association fees or ground rents and maintain the home. Failure to do so will result in foreclosure). The way this would really fall into play is if you have a cash buyer.
Let’s say you have someone who has $100,000. And they’re looking for a house and they’re not finding what they want or in the neighborhood they want. They’re able to; if they’re 62 or older, combine that $100,000 with a reverse mortgage to buy a house. They’re able to then turn that $100,000 into $200,000 or $250,000, which puts them in a nicer area with a nicer house. Happier buyers all around and the end result is the same. They have a house with no monthly mortgage payment. They just have to pay their taxes and insurance and they’re able to retire without that burden of a monthly payment.
Jamie: Do you find that most people are even aware of this option? I mean, I wasn’t even…
Jamie: …aware of this until I met Malcolm last year and he’s explained it a number of times on the program. But, I mean, there’s just not a lot of information or marketing for this program out there. Correct?
Scott: Yeah. It’s difficult to market. Not very many people know about it. I’m really active in the various realtor organizations around. I’m on the board of the Pinellas Realtor Organization’s Affiliate Business Partners, and we do classes there once a quarter at least and try and teach people about it. But we find that even Realtors like you said yourself, are just aren’t aware that it exists. It’s actually funny. Most of our customers are actually Realtors who are doing it for themselves because they’re just learning about it. Because they’re the easiest ones to reach at this point and to explain what the program is.
Jamie: Yeah. I know your company does a lot of outreach and training through Pinellas Realtor Organization, the Greater Tampa Association of Realtors, radio shows, and news outlets. So you do a great job of spreading the word. I mean, how much of your business is reverse mortgage for purchase or is it not too much of a business still?
Scott: Mac, what would you say that…
Malcolm: It’s still not the majority. It’s less than half, probably around a quarter.
Jamie: So it’s still just hard to get people to buy into using the reverse mortgage to purchase a home. But it is a viable option for people that are age 62 or over.
Josh: It sounds like a very good option.
Jamie: It is. Yeah. No, it is. It’s just it’s hard to kind of wrap your hands around and to understand. And because it’s not widely promoted, people are leery of it.
Josh: Right. But the way he explained it, I mean, I totally get it now. You know what I mean?
Jamie: Right. Yeah.
Josh: The way you explained it is just perfect. I mean, this could help a lot of people.
Jamie: Yeah. And you also offer to go to people’s homes and sit down with people. It’s not like they have to come into an office in your area or what not. You come to their homes and you can explain this to people too. Correct?
Scott: Yeah. We encourage that. We try and meet face-to-face with everyone we can. Occasionally, we’ll send an application through the mail. But face-to-face is always best.
Jamie: Okay. You’re currently located right now in Pinellas County off of Tyrone, right? So go ahead real quick…
Jamie: …where are you located right now?
Scott: We’re right on Tyrone Boulevard, directly across from the mall. We’re next to the old Sound Advice building. It’s 2999 Tyrone Boulevard.
Jamie: Okay. But you will go to people’s homes and explain this to them personally. So an excellent resource there. It makes people feel like they’re really being taken care of. Also, Access Reverse is a family-owned business and that speaks volumes right there. You don’t have these large big bank providers that have these big celebrity endorsements. Mac, can you explain a little bit of the difference between these large service providers that you see on TV with the celebrity endorsements versus Access Reverse Mortgage?
Malcolm: Sure. I think everybody’s familiar with the Fred Thompson ads. He’s passed away recently. But basically, the industry is in two segments. You’ve got the large national companies. There are two or three of those that really are telemarketing operations. They’re quite high-volume and high-pressure in their tactics. And I guess we’re the other end of the spectrum. We’re really the reverse of that. I’ve told you before, we recently closed a loan. The people had been corresponding with us for five years and getting newsletters. And just they looked ahead and did their plan. When the time came to downsize, then they got in touch with us. We’re based here in the Tampa Bay area. All our loan processing is done right here. So during the process itself, you’re not calling in and getting next available operator kind of deal. You call our office, we answer the phones live. You know who you’re dealing with all the time. We do enough volume, we’re ranked number one, two or three in the state of Florida pretty much every quarter in volume. So we’re doing enough volume that we’re very professional and expert. It’s all we do. But the personal touch is still there. So we’re very different that way.
Jamie: Yeah. You choose not to do traditional mortgages. I mean, this is your niche product and I think that speaks volumes. So if you’re dealing with another mortgage professional out there and they say, “Yeah, I do reverse mortgages,” ask them how many they’ve done. They may say, “Well, I’ve done a couple,” and I can tell you they’re probably going to be learning as they do it with you on this reverse mortgage. Why do you stay away from other types of mortgages? I mean, it’s good to have a niche. But what attracts you to the reverse mortgage profession?
Malcolm: We just think it’s a very specialized product. Only 53% of reverse mortgages close, people that go on applications industry-wide, but we close over 80% of ours. And that’s the difference there. You mentioned kind of the curse of the industry, and that’s what I would call forward mortgage or traditional mortgage people that put a tagline in their ad, “We do reverse mortgages.” The average volume for the forward mortgage people doing reverse mortgages is typically one or two a year. So it’s just you’re dealing with somebody like you say, they’re getting their education on your file. You really need a professional company. And there are enough of us out there you don’t have to sacrifice.
Jamie: Now, part of the process is also obtaining an appraisal, which is going to come and look at the condition of the property. What are the criteria for the property to meet a reverse mortgage, or reach FHA guidelines I should say?
Malcolm: So generally it has to be in decent condition like with any mortgage. There can be repairs allowed if…
Jamie: Is it highly restricted? I mean, are they looking at a lot of things with the home? Or is it, if it’s livable and there is no health and safety conditions then it will usually pass the appraisal, would you say?
Malcolm: Yes, exactly.
Jamie: Because some of the homes with older people, they’re lesser maintained and they may have some condition issues. But do you run into appraisal issues with conditions a lot of times?
Malcolm: There’s always some conditions, but they’re generally minor things that we can clear up ourselves. Yeah. Like you said, if it’s livable and safe then…
Jamie: Yeah. Okay. Because I want to talk a little bit more about that coming back from the break. And also, I want to share with you the four myths of reverse mortgages. Here with us, Scott and Malcolm Tennant, both of Access Reverse Mortgage. To learn more about them, accessreversemortgage.com or pick up the phone and give them a call, 727-347-0305. Again, 727-347-0305. You’re listening to That Business Show with Jamie Meloni, where business becomes show business.
Jamie: Welcome back to the program, everybody. You’re listening to That Business Show with Jamie Meloni, where business becomes show business each weekday morning at 8:00 a.m. here on 1250 WHNZ. Please learn more about this show over at tampabayradio.com. Also, the show has expanded to include a sixth show each and every week. That show is called That Business Show: The Real Estate Edition, which airs Sunday mornings at 5:00 a.m. on 970 WFLA, where I and my co-host, Frank Coto, talk all about real estate, mortgages, taxes and insurance, pretty much anything and everything related to real estate. I’m sure many of my listeners are probably not up at 5:00 a.m. on a Sunday morning but that show is available on demand at tampabayradio.com, as well as on iTunes as a podcast.
Currently in-studio with Malcolm and Scott Tennant. They are with Access Reverse Mortgage. You can learn more about them, accessreversemortgage.com. Or pick up the phone and give them a call, 727-347-0305. Again, 727-347-0305. There are a number of different myths, so to speak, with reverse mortgages. You’ve got four here I wanted to go over with you. Myth number one is the lender owns the home. Explain this to the audience.
Scott: Yeah. I mean, it’s simply not true. It’s just like any other mortgage. There’s no transfer of ownership. Just the house is the collateral for the loan.
Jamie: So where does this myth come from? Why do so many people think the bank owns the home? I don’t understand this.
Scott: You know? I don’t know where it comes from. Mac?
Malcolm: There were programs back prior to the FHA program back in the ’80s, where an investor would make a deal with a homeowner, “I’ll give you $2,000 a month for the rest of your life,” or whatever the number was, “But when you die I get your house.” So then you had some people would live 20 years. An investor would lose their shirt. But some people died in six weeks and made headlines. So, I think that was the root of it. That’s why FHA got involved originally too.
Jamie: Okay. So you maintain ownership of the home. And so if a situation comes up where you need to sell your home you could sell the home then, correct? I mean, how does that work with a reverse mortgage?
Scott: You can sell it at any time. It’s just like any other mortgage. If you decide to sell a week after you get the loan, you’re more than welcome to. There’s no prepayment penalty at any time.
Jamie: All right. So, myth number one, the lender does not own the home. You retain ownership of the home. Myth number two, reverse mortgages leave a mess for your heirs. Explain this.
Scott: Yeah. Mac kind of talked about it earlier that the worst case scenario with a reverse mortgage after the borrowers pass away for the heirs would be that there’s no equity left. You can never owe more than the house is worth. Even if the loan balance is $1 million and the house is worth $10, the difference is covered by FHA. A lot of times what you’ll hear about is a son or daughter that didn’t know that there was a reverse mortgage involved and they thought they were inheriting a free and clear house and they find out they’re not. That’s what makes the headlines and that’s kind of where the myth comes from. But the reality is that there was a reverse mortgage there that the parents took out and maybe just didn’t tell their kids about.
Jamie: Okay. Well, does the home then transfer to the heirs as part of that? Or how does that work?
Jamie: Does FHA pay off the lender and then the home is then owned by the heirs? I don’t understand that quite right.
Scott: If more is owing on the property than the home is worth, then the heirs, they could potentially just walk away from the property and let the grass grow up around the house. And then the bank would eventually take care of it. Ideally, what they would do is they would list it with a realtor, maintain the house and sell it. And then, like I said, the sale pays for a portion of it and FHA covers the rest.
Jamie: But the heirs are not on hook as part of the process? It’s not going to come out in probate or anything like that if they didn’t leave a will or something?
Scott: No, not on the hook at all.
Jamie: All right. So, reverse mortgage myth number three, reverse mortgage closing costs are too high. How are closing costs comparable to other mortgages?
Malcolm: So reverse mortgage closing costs can be higher. But they can also…we do quite a few of them now with zero closing costs. There’s a lot more flexibility in the program than there used to be. The reason that myth exists is FHA takes an upfront fee. Well, they recently reduced that for some borrowers from 2% to 0.5% of appraised value. So, that’s been a big savings there. We’ve also got products now that give us more flexibility in subsidizing closing costs. The other thing is with a reverse mortgage you don’t know the ultimate amount of the mortgage going in because the amount you borrow at closing is typically the lowest amount you’ll owe, and then the balance goes up from there. So, they use kind of an arbitrary formula to determine closing costs on a reverse mortgage which does inflate them a little bit. But overall, I mean, we can do zero closing costs. It just depends on the program.
Jamie: Another myth, if I get a reverse mortgage I am selling my home to the bank. I think that’s kind of related to myth number one where the lender owns the home. But you’re not selling your home. This is a mortgage just like other mortgages; just the conditions or how it functions is different. So, Scott, explain this to us.
Scott: Yeah. Like you said, it’s just like the first one we talked about. There’s no transfer of ownership. It’s just a mortgage. It’s just a lien on the property. I do hear that one pretty often. Actually, there was a customer that did an interview on TV of ours that said in the interview that when she dies the house goes to the bank, and it’s just not the case. The house goes to the heirs and the heirs do with it what they want. They have to pay off the loan, refinance it, and sell the house, something. But it doesn’t automatically go to the lender.
Jamie: That’s the type of press that hurts your industry because it seems like every time I see something in the news about reverse mortgages it’s something along those lines. “The bank took my home,” or, “I’ve been foreclosed on and I wasn’t able to make the payments,” or something. There’s always some type of misinformation out there, would you not say?
Malcolm: Very often, yeah. Scott’s referring to the ABC News I-Team, investigative team, they did a piece on reverse mortgages, on July 28 actually. It was very balanced and very fair, one of the few you’ll see. We’re seeing a shift now in that press coverage. It’s starting to come around as people are starting to understand these. Reverse mortgages are becoming a mainstream financial product, and I think in five years if you don’t have a reverse mortgage you’ll know somebody who does.
Jamie: So you have a reverse mortgage. As long as you keep the property taxes paid and the insurance on the property, you’re really at no risk of a foreclosure. Is that a safe statement to say?
Malcolm: Yeah. If you’ve got Homeowner’s Association dues, obviously you have to pay those.
Jamie: There are Homeowner’s Association dues that could come along.
Malcolm: You have to maintain the house. But that’s true. It’s difficult to get a foreclosure on a reverse mortgage. And there’s been a lot of circumstances in the past that have been corrected that I think in the future you’re going to see very few. These are very safe.
Jamie: I recall an article in the Tampa Bay Times last year, and we spoke about it on a program, last year as a matter of fact, where the headline on a Sunday morning newspaper was “Reverse Mortgage Foreclosure.” And it had some lady standing out in front of her home. The headline made it sound like she had been done wrong by the lender. But if you had read the article you kind of find out that wait, this is her fault. She did not pay the property taxes on the property and so that’s understood or should be understand that you would be foreclosed in that situation. So it was really a hit piece that really contradicted itself if you actually read the article. But so few people actually read the articles. They see the headlines and it just puts a point in their head that, “Oh, wait. Reverse mortgage, those are just bad for us.”
Malcolm: Yeah, absolutely. That was a bad one. The entire front page of a Sunday paper was slamming reverse mortgages. Basically, you read the inner pages; the reverse mortgage had nothing to do with the foreclosure. That’s an issue too is we do have unfortunately some high-pressure companies in our industry that maybe put people into reverse mortgages who probably can’t afford to stay in their house anyway. So it brings up the importance of knowing who you’re dealing with. Check Better Business Bureau. Check FHA’s website. There’s a designation in our industry called Certified Reverse Mortgage Professional, CRMP. It’s a difficult certification to get. There’s only I think about 110 in the entire country right now. Three of them work with Access Reverse Mortgage. Three of the 11 in Florida currently, work with our company.
Jamie: That’s just an incredible point and reason to use Access Reverse Mortgage. In addition, I think the biggest point is the fact that that’s all you do. I mean, if I went to another mortgage provider and they say, “Yeah, we do reverse mortgages,” and knowing that they are a specialized mortgage product, then I would want somebody that is a specialized provider of those products. And Access Reverse can definitely help you out with reverse mortgages.
Malcolm: Jamie, Boston College did a really good study on using your home for income in retirement, not just on reverse mortgages but on other strategies. We bought up a quantity of those and if any of your listeners would like one, if they would email you or contact us we’d be happy to mail one out to them or email one out to them.
Jamie: Okay. We’ll put that up on the show recap which is found over on tampabayradio.com. Or people can just send me an email, email@example.com. Or they can pick up the phone and give you all a call, too. It’s 727-347-0305, again, 727-347-0305 and you’ll provide that information out to them. Also, you can learn more over at accessreversemortgage.com. Let’s talk about the different categories of buyers that use reverse mortgages. Who are the different people that are using these products?
Scott: For refinance, it’s kind of a wide range. And for purchase as well. We have a big portion of our customers now, people with significant income, significant savings. But they’re setting up a line of credit just for incidentals that may come up rather than relying on credit cards or having to take out a loan and scramble to get it done at the time. That’s probably 50% of our business is someone who at closing doesn’t even take any money. They just have a line of credit set up just in case. Then the other half is people that are paying off an existing mortgage. They want to get out of that mortgage payment. We have someone right now who, I believe they only have $3,000 or $4,000 left on their mortgage but the payment’s killing them. They want to just get it done with. So they’re going to pay off that mortgage, set up a line of credit, and actually I think they’re buying a boat too.
Jamie: Oh, wow. Can you use reverse mortgages…I guess if you can use them to purchase a home you can use them to purchase other things too. Or is that the case?
Malcolm: Well, if you’re buying a house, you’re going to use probably all the proceeds in the purchase transaction itself. But if you’ve got an existing home and no mortgage or a small mortgage, you’re going to end up with a line of credit. So you can use that money basically for anything you want.
Jamie: So what’s the future of Access Reverse? I mean, you’ve been in business ten years here. You’re based here in the Bay area. I mean, do you have any expansion plans? What’s the long-term outlook for Access Reverse Mortgage?
Malcolm: Well, we do have loan officers around the state. Two of my sons are active in the company. We see hopefully another ten or 20 years doing what we’re doing. Our focus is Florida only. We’re one of the few companies that do that. Our intent is to basically keep doing what we’re doing and trying to educate more and more people on this is a good product. At some point, my wife and I will retire. But then it will transition over hopefully to the next generation.
Jamie: Well, you’ve done a great job and it’s an amazing family business here, based in the Bay area. A+ rated by the Better Business Bureau, Access Reverse Mortgage. Scott and Malcolm, I greatly appreciate you all being in-studio and sharing your great entrepreneurial story with us today.
Scott: Thank you. Thanks for having us.
Malcolm: Thanks, Jamie.
Jamie: You can learn more about them over at accessreversemortgage.com. Or pick up the phone and give them a call, 727-347-0305. Again, 727-347-0305 and again accessreversemortgage.com. You’re listening to That Business Show with Jamie Meloni, where business becomes show business.