Chris Clow/RMD: Jim, you were a real estate agent and then a forward mortgage professional before jumping into the reverse arena. You spent just under 20 years in the business. Is it fair to say you’ve seen its highs and lows?

Jim Cullen: Yeah, definitely. I made the switch into reverse mortgages, quite honestly, not due to anything I initiated. Our area manager at Wells Fargo approached me in June 2004 and asked if I had ever considered doing reverse mortgages.

I hadn’t really thought about it because I didn’t know much about them. We had a guy in the area who was our reverse mortgage person, and she said, “I think this might be something you’d be really good at.”

So, I did my homework and some investigating, and I decided to give it a try. In August 2004, I went out to Boston for a week of reverse mortgage training. Wells Fargo had very good and thorough training — it was a solid week because you needed to focus solely on reverse mortgages. There was no mix and match with forward mortgages, which I liked because it allowed us to concentrate on what we were going to be doing.

Clow: How did Wells Fargo’s exit from the business impact you?

Cullen: Wells bailed out in the summer of 2011. A whole bunch of us switched over to MetLife, thinking it was a good move. However, eight or nine months later, in April 2012, MetLife also bailed out. I had to make a couple of moves. I never made a move on my own; it was always the bank or whoever decided to get out of the reverse program.

That was disheartening because it’s a good program, but if they weren’t making enough money or had other reasons, they decided it wasn’t necessary to continue. It is a niche product, obviously. Despite this, I made a couple of moves but always stuck with it. I always told myself that once I got into reverse mortgages, I would never go back to forward mortgages. Forward mortgages are a hard hornets nest, and I’m glad I never moved back. It was smart to stay in the reverse business.

Clow: A lot has been said about the reverse mortgages that were originated in the aftermath of the financial crisis, but the HECM program itself has gone through quite a lot of change since then. How do you compare today’s product to what it was in those days?

Cullen: Obviously, the safeguards that have been put in place have probably protected and kept the product around. But to me, the absolute No. 1 biggest issue right now — despite property values skyrocketing and other factors — is the focus only on the HECM program.

Being in Wisconsin and primarily originating almost everything within this state, we had no proprietary products. The only option back then was the Financial Freedom Cash Balance Plan, which you have to be an old-timer like me to know about. But all the new proprietary products are unavailable in Wisconsin, so we are strictly working with the HECM program.

Right now, with the principal limit factors where they are, especially with younger borrowers (in their 60s to mid-70s), you run the numbers for people and they see that principal limit. They calculate in their heads, “OK, my house is worth this much and this is what I’m able to pull out, and it’s going to cost me this much to do it.” It’s tough. It’s very, very difficult.

I think our friends at HUD [the U.S. Department of Housing and Urban Development] need to look at this and find a way to bump up the principal limit factors. I don’t mean giving away the farm, but I think the principal limits are so low right now that it is very difficult to make transactions work.

Clow: What’s your favorite memory of being in the reverse mortgage business?

Cullen: Well, I mean, on the whole, it’s obviously the people — the customers you serve. With this, it’s not like a traditional mortgage where it’s done so quickly. With the reverse mortgage program, with the HECM program, it takes a little bit longer and you develop a relationship with these people.

Before you do anything, you have to establish why they are thinking about a reverse mortgage and what they are looking to accomplish. Can we do that? Can we make it work? You develop a relationship and they have to trust you because this is a big deal for them. You don’t just fly in and say, “Wham, bam, I’ll see you later.” That will not work. You really have to develop that relationship.

I’ve done hundreds and hundreds of loans, and everyone has a story to tell. Getting to know that story and understanding what they’re doing is crucial. When you finally get to the closing table, sign that last piece of paper, and see the relief or joy on their faces, it’s incredibly rewarding. They often feel like they’re going to be in a much better financial position. It’s an emotional thing. You can be very objective and handle all the black and white, but there’s a lot of subjectivity involved in this process.

On a general level, that’s the thing — the people you serve and the people you work with. Our industry, in the grand scheme of things, is pretty small. Over the years, you get to know people both within and outside your organization. It’s almost like being in a club — the reverse mortgage club. It’s kind of a neat thing that way.