CEO, Michael G. Branson
Michael G. Branson, CEO of All Reverse Mortgage, Inc. and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 19 years to reverse mortgages exclusively. Mike has multiple “firsts” in his career, starting back in 1982 when he was part of the team at General Electric Mortgage Insurance Corporation that brought the first AAA mortgage-backed securities to market to being part of the team that developed and introduced the first fixed-rate jumbo reverse mortgage to market, which was sold to a private investor in 2007.
I started the mortgage banking industry as a loan originator for a very small mortgage banker in the late 1970s, and interest rates began climbing soon after I began my mortgage banking career.
Not long after I finished training, I was a brand new 18-year-old loan officer when interest rates rose above 10% in California. There was usury on interest rates for mortgage bankers at that time of 10%, so we could not close loans then.
Our company was owned by a savings and loan based in Minneapolis, Minnesota, and we were prohibited from closing loans in their name to avoid the usury since there were laws against interstate banking at that time.
The bank believed that if we closed loans in the name of the parent Savings and Loan to avoid usury, it would have violated the rules against interstate banking. In 1979, I moved into a “temporary” position in the loan servicing department to allow me to keep my job with the company when all origination ceased.
This redirection into the operations of the mortgage banking business allowed me to see what happens to people and companies because of fraud and other unethical practices.
I remained in servicing for almost 2 years, working with borrowers who were both victims of originator fraud and defrauded lenders. I saw the results of what it did at times to businesses and those individuals whose lives were ruined. When I moved into underwriting in 1980,
I had the opportunity to work with both retail and wholesale lending.
After just 2 years in underwriting, I was offered a position as the regional underwriting manager for a new mortgage insurance company being formed, General Electric Mortgage Insurance Corporation, which I accepted and continued to run through their merger with the second oldest mortgage insurance company in existence, American Mortgage Insurance Corporation.
As the Western Regional Underwriting Vice President, I became the company spokesman on the quickly emerging adjustable rate mortgage and bond programs for the West Coast. Since GE was the only company that could deliver an AAA-rated bond at the time, they were in constant demand. However, fraud and abuse for 100% insurance on AAA bonds where lenders and developers had no liability became rampant.
Again, I was called upon to help implement programs to cease the fraud issues. I also became a government FBI witness on some cases against major offenders.
Combating Loan Fraud
After leaving the mortgage insurance industry and rejoining the mortgage banking industry, I joined several companies during the late ’80s and early to mid-’90s. Fraud was a terrible challenge then, especially with wholesale or brokered business.
While with Plaza Funding, I devised a form titled “Consequences of Fraud,” which I began requiring all my accounts to read, complete, and sign. When the Senior Management at Plaza first discovered the use of the form, they were concerned that the form would drive away business. I was scheduled to go into the corporate office the next day, and my job was in jeopardy.
I told the President at Plaza that I was too familiar with fraud and what it could do to people and companies. I was unwilling to back down; if it meant my job, I was prepared for that eventuality. I drove to the corporate office the next day. As I was about to enter the President’s office, I was greeted and asked if I brought the form, to which I answered yes.
They used the form to show the representatives from MGIC (another mortgage insurance company in their office that day for an emergency meeting due to losses sustained) the steps that Plaza was taking to mitigate fraud to avoid being cut off! It worked, and the form became standard for all branches. In fact, MGIC asked if they could also use the form for other companies, to which we agreed, and that form still appears in most broker packages/agreements today.
The point is that the right thing is always right, even when it is challenging or convenient. I almost lost my job that day, and finding other jobs in mortgage banking at that time in the mid-90s would not have been easy. But this is how it should be and how we run our company.
Doing the Right Thing is our Culture
Doing the right thing in our business, reverse mortgages means doing what is suitable for senior homeowners. This means we do not “sell” a loan to our customers. We educate them about the loan program, the various options available, and the good and bad based on the information they are requesting.
We have talked many borrowers out of reverse mortgages because it was not a good option. Under federal lending laws, we must accept a borrower who really wants to apply for the loan anyway. Still, if they do, it will not result from our not telling them the whole truth.
One of my statements that I use often, and I hear it repeated by others and am very happy when I do, is, “I would rather you not get a reverse mortgage for the right reasons than get one for the wrong reasons.”
We repeat this mantra often, and this theme is repeated throughout our website, articles, and blog pages. When your staff sees that you are most interested in doing the right thing and that it is not just a slogan on the wall, they truly understand and will continually seek to do the right thing by your customers as well.
We had had the direct verbiage that a reverse mortgage is only suitable for some borrowers long before national spokespersons for other companies began to speak about it in their commercials.
I am happy to see other companies moving away from the straight pitch to sell the program and starting to admit to people that this loan has significant benefits for many. Still, it is only the right loan for some borrowers. From the start, I decided to base all our communication on this premise.
Our first reverse mortgage loan was for my own mother.
When I saw the benefits to my mother based on her circumstances, it would be a great option. It worked exceptionally well because my siblings and I were not looking to inherit the home, and none of us depended on a large inheritance from it when she passed.
While mom had her reverse mortgage, she could remain active, bowling, attending baseball games, and doing what she loved but had previously given up due to a lack of resources. The loan did exactly what it was intended to do for her – it allowed her to age in place with dignity.
Had she still been unable to live comfortably after the loan, I would have had to honestly tell her that she would be better off selling the home she loved and downsizing, but I am glad I did not need to and that she loved her home for as long as she was able to live in it.
Since then, we have closed thousands of reverse mortgage loans for senior borrowers. We have been “caught” doing the right thing by our staff on multiple occasions, and we believe this sets the tone for how they treat people.
All Reverse Mortgage, Inc. is not a non-profit organization. We rely on our income to continue paying our staff and expenses. Still, numerous times, we get down to where the loan is ready to close, but the appraisal comes in low, and the borrower needs more funds to close the loan.
In more than one instance, we have donated all our income to close the loan for the borrower anyway so that they could eliminate their mortgage payment and retain their home.
The sense of accomplishment our staff gets when they can be a part of this cannot be measured by their paycheck alone. That may be why, except for a few salespeople, we have literally 0 turnover of staff.
Mike has specialized in and continues to write about reverse mortgages for over 19 years and is the CEO and owner of All Reverse Mortgage, Inc. He has been interviewed for publications such as NRMLA, Forbes, Kiplinger, HousingWire, LA Times, Yahoo Finance, Realtor.com, and others for his work with reverse mortgages and his part in bringing the first fixed rate jumbo reverse mortgage (The Gold Reverse) to the market in 2007/2008.