Tim Nelson, a longtime reverse mortgage industry professional and reverse department manager at VIP Mortgage in Scottsdale, Arizona, spent 20 years in the home lending arena before shifting his focus entirely to reverse. With that focus came attention and appreciation for the reverse mortgage product, which led him to see an opportunity for him and his family.
Nelson is now a reverse mortgage borrower in addition to being an industry professional. He sat down with HousingWire’s Reverse Mortgage Daily (RMD) to discuss some of the details about his entrance into the industry as a customer, and what he has learned about the product and the industry since he started seeing them from a different angle.
Clear retirement tool
When asked about his transition from industry professional to customer, Nelson said that it wasn’t too much of a stretch considering that he has always viewed a reverse mortgage as a tool to deploy in later life.
“From the first day I entered the reverse mortgage space, I’ve always viewed it as a financial planning tool,” he said. “I’ve focused on financial planners, recognizing that the home is one of the biggest assets and can be strategically incorporated into a retirement plan.
“Given that approach, it always made sense that, eventually, when I reached that stage, I would apply the same strategy to myself. So, yes, realistically, I’ve always known this would be part of my plan.”
The journey began when he and his wife became eligible a couple of years ago. They have been married for more than 40 years, but there is an age difference between them.
“I wasn’t thinking about a reverse mortgage when I was thinking about getting married, and I married somebody four years younger than myself,” he said. “So, part of the strategy is having that line of credit available to both my wife and I as we get older. So, we needed to wait until she was 62 in order for her to make sure she has that line of credit available to her.”
In the summer of 2022, just after his wife’s 62nd birthday, qualifying age arrived and the loan closed roughly 24 hours later. They haven’t looked back, finding several potential scenarios that could be used to best take advantage of a standby line of credit.
Business and customer intelligence
But there was also value in the experience for Nelson as a reverse mortgage practitioner, he explained.
“As you develop and build business, especially with financial planners, there are so many strategic ways to use a reverse mortgage that we try to share with our advisers,” Nelson said. “One of the biggest complaints we often hear about the product is that it’s confusing. A big reason for that is loan officers don’t always ask the right questions to understand the borrower’s real needs.”
This can sometimes mean that many extraneous variables that might be irrelevant to a particular borrower might be discussed, overloading them with information they don’t need and adding to a sense of confusion. The problem can be compounded by retirement strategies themselves, which can be baffling on their own, Nelson said.
“Sometimes we just need to keep it simple,” he said. “We need to do a better job of peeling back the layers to understand what the customer wants to accomplish, how the reverse mortgage fits into that goal, and then clearly explain the solution — what it will look like now and in the future.”
For Nelson, of course, this process was easier. As a longtime industry participant and product expert, he knows the variables involved in overfunding the transaction to create a line of credit. This led to more fruitful conversations with his own financial planner, he said.
“As a reverse mortgage professional with 15 years of experience, I’ve spent a lot of time talking to financial planners about different strategies,” he said. “I had my own plan in mind, but when I sat down with my financial adviser after putting this in place, he suggested ideas I hadn’t even considered.”
Getting to the heart of strategy
Nelson spoke about some of the potential strategies he has found himself open to, and how his industry expertise helped inform the paths now in front of him as a Home Equity Conversion Mortgage (HECM) borrower.
“Whether the plan involves using a line of credit for long-term care or funding Roth conversions, we have the ability to strategically fit reverse mortgages into long-term retirement plans,” he said. “Having that expertise allows us to provide real value when crafting a retirement strategy.”
When talking with potential referral partners, Nelson said he always aims to emphasize that reverse mortgages are his specialty. This also lends itself to discussions about areas that the loan should not interact with in a larger retirement plan. And because that helps to narrow down the potential options, some of this also worked as a customer.
“By asking referral partners thoughtful questions about their clients and their approach, I show that I’m focused on creating tailored solutions to potential problems,” Nelson said. “Instead of simply asking if home equity is being used in retirement strategies, I aim to learn more about how the adviser works, their clients’ needs, and whether they’re open to considering home equity as part of a comprehensive retirement plan.”
Another advantage is that Nelson was very pleased with his own loan officer for a unique reason. “I’m the one that trained him, so, yes, I felt very confident in my group of loan officers,” he said.
