“Rules of the Game,” a popular interactive session from past annual meetings of the National Reverse Mortgage Lenders Association (NRMLA), returned in 2024 to the San Diego event that took place at the end of September.

Hosted by reverse mortgage educators Dan Hultquist and Jim McMinn, the pair aimed to once again point out how guidelines can often be misunderstood in the reverse mortgage industry. They each sought to “blow the whistle on long-held notions that will open your eyes to a better presentation of the reverse mortgage.”

The trouble with definitive statements

The first topic the pair covered was the trap that some reverse mortgage professionals might fall into by making “definitive statements.” These may run afoul of program regulations or other more nuanced realities of the Home Equity Conversion Mortgage (HECM) program.

“When you start using words like ‘will always,’ ‘guarantee’ or ‘never,’ those are definitive words that could be problematic if there’s an exception to the rule,” Hultquist said. “And as we know, it’s a little complex, there are exceptions to the rule, and that’s where lawsuits are.”

As an example, Hultquist began a statement that asked, “Is it true that borrowers can always …” before he immediately interjected.

“No, don’t use the word ‘always,’” he said. “There’s no guarantee. We have no idea.”

Using “wiggle words” to relay the reality of a particular rule or regulation helps to emphasize the point a professional may seek to make while steering clear of definitive statements that could be problematic, McMinn noted.

The audience called out some of their favorite examples: “generally,” “usually,” “sometimes” and “typically” were offered. While a certain rule might work one way most of the time, industry professionals should stay away from a definitive declaration that a rule or guideline will always work in the same way since that is where problems can emerge.

Presentation accuracy, staying in your lane

Keeping with the sports theme, the pair then described a need to be “accurate with our passes,” or in other words, accurate in presentations about the particulars of the product.

“When you’re going to pass that ball out there, make sure you know the guidelines,” Hultquist said. “Communicate them, and make sure everybody knows what routes they’re going to take.”

One example he offered is a statement that a borrower will never be required to make a payment while they have a reverse mortgage. While payments toward the loan balance are not required by borrowers, there are other payments associated with keeping a reverse mortgage in good standing. These include property taxes, homeowners insurance and — if applicable — homeowners association (HOA) fees.

“There’s got to be a caveat to that,” Hultquist said. “The caveat is not without qualifying language regarding borrower obligations.”

This is to ensure that a reverse mortgage professional stays closely tied to their own area of expertise. They shouldn’t wander into areas they may know about but may not be qualified to offer specific advice about.

“Don’t go out of bounds,” Hultquist said. “‘Staying in your lane’ is another way we talk about it. Don’t go out of bounds by giving tax advice, legal advice or investment advice. These are just some general rules of the game, like you don’t want to communicate with appraisers or counseling agencies or your unlicensed activity if you don’t have a license, things like that. You want to stay within boundaries.”

McMinn added that the particular expertise of reverse mortgage professionals may not be narrow, but presenting insights about other topics is simply inadvisable.

“We know a lot about this program,” he said. “We all live it every day, and we want to give advice to our customers and make sure that they know what they’re doing. But we want to stay within our lane, so let the legal folks do legalese. We’ll let accountants and the tax people do their thing, and then we can all come together.”

Learning the playbooks

The pair also recommended learning the “playbooks” for a particular strategy, particularly when it comes to the intersection between reverse mortgages and other disciplines.

“There’s a lot of playbooks out there,” Hultquist said. “It could be financial planning playbooks, maybe working with attorneys or real estate professionals. And servicing — know the servicing. I have a passion for compliance and servicing, and we have industry people that are fantastic to reach out to, but know the servicing playbook.”

Hultquist also said purchase strategies have their own sets of dynamics, and having a good understanding of particular subject matter you may be seeking to invoke makes it much easier to execute with success.

“Learn the playbooks so that we know what to do,” Hultquist said. “If you don’t know that playbook, then you probably shouldn’t be making that play.”