About Our Authors: CEO, Michael G. Branson
Michael G. Branson (CEO All Reverse Mortgage Inc. and moderator of ARLO™) has 40 years of experience in the mortgage banking industry and has devoted the past 16 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 1970’s and interest rates began climbing soon after I began my mortgage banking career.
It was not too long after I finished training that I was a brand new 18-year-old loan officer when interest rates rose above 10% in California. There was a usury on interest rates for mortgage bankers at that time of 10% and so we could not close loans at that time.
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.
It was this redirection into the operations of the mortgage banking business that allowed me the opportunity 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 had both been the victims of originator fraud and who had defrauded lenders. I saw the results of what it did at times to businesses and to those individuals whose lives were ruined by it. 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 offer 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.
I became the company spokesman on the quickly emerging adjustable rate mortgage programs and bond programs for the west coast in my position as the Western Regional Underwriting Vice President. Since GE was the only company who could deliver a AAA rated bond at the time, they were in constant demand but 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 of the 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 80’s and early to mid-90’s. Fraud was a terrible challenge at that time, 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 and I was scheduled to go into the corporate office the next day and my job was in jeopardy.
I told the President at Plaza I was too familiar with fraud what it could do to people and companies and I was not willing to back down and if it meant my job, I was prepared for that eventuality. I drove to the corporate office the next day and as I was about to enter the President’s office, I was greeted and asked if I brought the form with me which I answered yes.
They used the form to show the representatives from MGIC (another mortgage insurance company who were in their office that day for an emergency meeting due to losses sustained) the steps that Plaza was taking to mitigate fraud to keep from 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 the right thing, even when it is not easy and not convenient. I almost lost my job that day and finding other jobs in mortgage banking at that time in the mid 90’s would not have been an easy task. But this is the way I believe it ought to be and that is the way we run our company.
Doing the Right Thing is our Culture
Doing the right thing in our business, reverse mortgages, means doing what is right for senior homeowners. This means that 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 really was not a good option for them. Under federal lending laws, we cannot refuse a borrower who really wants to apply for the loan anyway, but if they do it will not be a result of 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 that get one for the wrong reasons”.
We repeat this mantra often and this theme is also repeated throughout our website and in our articles and on our 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 have had the direct verbiage that a reverse mortgage is not right for all borrowers long before national spokespersons for other companies began to speak about it in their commercials.
I am personally happy to see other companies moving away from the straight pitch to sell the program and starting to admit to people from the start that this loan does have great benefits for many, but it is not the right loan for all borrowers. I made the decision from the start that we would 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, I could see that it would be a great option. It worked especially well because my siblings and I were not looking to inherit the home and none of us were depending on a large inheritance from it when she passed.
While mom had her reverse mortgage, she was able to remain active, bowling, attending baseball games and doing the things she loved but had previously given up due to 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 to sell the home she loved and downsize 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 and we do rely on the income we receive to continue to pay our staff and our expenses, but there have been numerous times that we get down to where the loan is ready to close but for the appraisal and then the appraisal comes in low and the borrower does not have the 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. Maybe that is 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 16 years and is the CEO and owner of All Reverse Mortgage, Inc. He been interviewed for publications such as Forbes, Kiplinger Retirement Report, HowsingWire, Reverse Mortgage Daily, LA Times, 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. All Reverse Mortgage, Inc. headquarters is located in Orange, California.