Fairway Impartial Mortgage Company and monetary software program developer MoneyTrax have teamed up for a brand new initiative designed to permit for simpler communication between reverse mortgage loan originators, monetary advisors and purchasers to extra effectively talk how residence fairness could be integrated right into a retirement planning technique.
By way of new software program, referred to as “EquityTrax,” Fairway and MoneyTrax have created a brand new providing designed to construct on ideas established by MoneyTrax’s current “Circle of Wealth” program by displaying how sure retirement plans could be affected by totally different ranges of saving, investing and incorporating a house’s fairness into monetary methods.
“Up up to now, it’s been actually tough to clarify reverse mortgages,” stated Harlan Accola, nationwide reverse mortgage director at Fairway in a webinar introducing the software program. “But if we properly explain how these things give a solution to many of the retirement problems that are out there, we change the world and we change the way retirement is done in this country.”
How the software program works
The premise of EquityTrax is predicated totally on two core ideas: monetary advisors must know lots concerning the potential options that they’re providing, and so they want to have the ability to talk what they know in a brief time frame even when the character of the merchandise or recommendation is inherently advanced. That is in keeping with Mark Guthrie, CEO of MoneyTrax.
“[Human beings are] visual learning and retention creature[s],” Guthrie stated on the webinar. “You can go look up all these statistics, but just in essence we all know that our brains function best in taking in information. Not by listening to somebody talk or by reading a book, but by looking with our eyes and seeing concepts and images and pictures.”
Circle of Wealth takes the idea of wealth planning through the use of an analogy associated to plumbing: totally different pipes and filters lead water to gather elsewhere, and for the needs of the software program, the “water” is the sum of money coming into the accounts of a selected shopper. By making use of the identical visible ideas to the incorporation of residence fairness into an individual’s retirement plan, they and their monetary planners can extra simply see and perceive the distinction that may be made by incorporating the fairness of their properties utilizing the brand new “EquityTrax” software program
By taking this visible strategy, EquityTrax can help in demonstrating to purchasers and advisors alike the value of a Home Fairness Conversion Mortgage (HECM) as a device which will help to extend liquidity and to keep up or maintain current investments, Guthrie stated.
Broadly talking concerning the reverse mortgage product class, there are a couple of key realities that trade gamers should cope with regularly, says Paul Donohue, retirement and reverse mortgage specialist at Fairway. One in all these is that there’s a excellent storm making a barrier of understanding concerning the product class, as reverse mortgages are an summary concept wrapped in a layer of stigma, he says.
“It takes some time for the consumer, who has got to invest some time to understand the concept [behind the reverse mortgage],” Donohue explains. “The MoneyTrax concept, which actually performs into the design of the EquityTrax program is about creating a visible expertise in order that the patron can perceive it extra clearly, and faster.
Simplifying the “counterintuitive” nature of the HECM product, Donohue says, can go hand-in-hand with the efforts that are guided by the thought of constructing belief amongst potential purchasers, their households and monetary advisors.
“It really does speed up the understanding, and the decision process that the homeowner’s got to go through,” Donohue says. “[EquityTrax] was designed to help homeowners understand the counter intuitive nature of the reverse mortgage.”
Driving rules behind the event of EquityTrax had been centered on readability and ease of accessing data, Donohue says.
“We want to clarify, simplify and demystify the HECM concepts to speed up and support the consumers understanding and decision process,” he says. “We also want to create a common language between the mortgage planner and the financial advisor, so we can serve the client from both sides of the table.”
The hope is that this streamlining of language and know-how will assist to serve the bigger aim of constructing belief and confidence from either side, strengthening a shopper referral course of that may usually be marred by confusion, dangers and uncertainties, Donohue explains.
Gross sales position and 2021 plans
On the gross sales aspect, the incorporation of EquityTrax is invaluable because it permits a possible shopper and monetary advisor to see how a reverse mortgage can work together with an abundance of economic methods, each earlier than and after the implementation of residence fairness. That is in keeping with Peter Sciandra, nationwide reverse mortgage gross sales supervisor at Fairway.
“How all the parts of a reverse mortgage will work in terms of what the balance on the loan will grow, to how [a borrower] can utilize the line of credit, or how they can take what their previous mortgage payment was and put that into savings can all be illustrated with EquityTrax,” Sciandra says. “You can do all sorts of scenarios for the borrower to show them the great flexibility they can have within their retirement going forward, to better manage their money and how it can work.”
That is additionally true when it comes to seeing how residence fairness can work together with different investments for a holistic illustration of an individual’s whole monetary state of affairs, and the way it may doubtlessly be affected by the incorporation of residence fairness, Sciandra says.
That being stated, for a monetary planner who may see the illustrations of EquityTrax, a powerful “firewall” is in place between the loan origination professionals and the monetary planner professionals, Sciandra says.
“A financial planner is not selling a mortgage,” he says. “What’s happening is they’re handing off the mortgage aspect of it to us. Our LOs to talk to their client about how they can use reverse as part of the financial plan, and then the financial planner brings it back in and can take [that information] to show the [impacts on the financial plan].”
When it comes to bigger plans, Fairway sees this new device as a key element within the gross sales repertoire of its loan officers, whereas additionally serving as a brand new element to the essential mission that Fairway’s reverse mortgage division sees for itself, Donohue says.
“Along with the financial, estate and insurance planning communities to help the baby boom generation succeed in retirement, this tool and Fairway’s reverse division’s mission is to have an important seat at the table to help baby boomers retire successfully,” he says.
The plan for the reverse division is to include EquityTrax wherever potential, Sciandra provides.
“The best way I can put it is [that EquityTrax] is a very big part of our plans as we put them together for the coming year,” he says. “Our goal would be to have as many of our loan officers using EquityTrax as possible.”