Ryan and our team at Celink are heading into the home stretch of fiscal year 2012. I am joyful at the thought of bringing a most trying year to a close and reveling in the stories of grandchildren as they prepare for a new school year. They’re shopping for clothes and supplies and anxious about what the next year will hold. When I ask if they’re ready to get back to the three R’s (reading, ‘riting and ‘rithmetic), they look at me as if I’m from another planet. “Poppy, what are you talking about?” This elicits peals of laughter from their parents, along with, “Dad, no one talks about the three R’s anymore!”
I’m not from another planet, but I am from another time in educational history. The three R’s were the basics: those foundational skills children needed early on to successfully navigate more complicated and challenging tasks in later coursework.
This got me thinking, the mortgage business has its own rudimentary requirements for success. I would call them the three C’s of the mortgage business, those basic, foundational conditions to successful mortgage transactions:
Credit // A strong credit report, an acceptable FICO score
Capacity // A borrower’s ability to make payments
Collateral // The quality of the property
Perhaps more now than ever, these elements take on additional importance for the reverse mortgage industry. If our industry is to survive and thrive in these trying times, the three C’s should be supported by another set of principles, ones that guide our actions as professionals serving an important sector of our community:
Clear conscience // We exist to serve others, not ourselves.
Confidence // We represent a great product in an industry committed to ethics.
Courage // The strength of our convictions makes us willing and able to face the uncertainty of the times and whatever challenges may come our way.
Our industry landscape has been forever altered by the massive storm on the forward side. The tsunami that ravaged the northeast coast of Japan in March 2011 generated 5 million tons of debris. More than a year passed before this debris began arriving on North American shores and it continues unabated today. The figurative tsunami of the housing market collapse happened years ago. The reverse mortgage industry experienced its initial aftershocks and this past year the “debris” generated by this forward-side mortgage crisis began landing on reverse mortgage shores. The concerns over anything that has the word “mortgage” in it have generated an incredible amount of misconceptions and misunderstandings about our product and industry. This is a mess we didn’t create, but we are compelled to address it. We can’t ignore the debris or pass it off as someone else’s job.
For those of us who have staked our professional lives in the origination and servicing of reverse mortgages, the product and the process are straightforward, and they have always been about providing responsible borrowers with a means of accessing a financial resource of their own making. Throughout its 20-plus years as a HUD-insured product, heartwarming success stories have always buoyed our spirits, and NRMLA’s members and its Ethics Committee continue to work diligently to address, weed out and eradicate altogether those who threaten the borrower, or the reverse mortgage product, through chicanery or unethical behavior.
I am confident that by getting back to basics, by making the commitment to keeping the three C’s in place for each and every new reverse mortgage transaction—and by supporting those efforts with a clear conscience, confidence and courage—our industry will emerge from the storms and challenges of the past few years stronger, better and cleaner than ever.
