“Real estate is in my blood.” That’s what Kevin Guttman always tells people. Kevin’s parents were realtors and investors. Even as a little guy, his dad used to take him around to look at houses and just talk to him about real estate. Kevin started as a mortgage originator but in 2014, he decided to focus on reverse mortgages as he started seeing baby boomers retire at 10,000 people a day. This was the first generation that had to fund their own retirement. Kevin finds it very rewarding sitting with a senior couple at the point in their life where they really can’t afford a mistake, just to educate them about how reverse mortgage can help them and to show them how it can solve their cash flow problem or accomplish a dream they have.
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Reverse Mortgage Revolution with Kevin Guttman
I have the good fortune to be joined by Kevin Guttman of ReverseMortgageRevolution.com. Kevin, thank you so much for joining us.
Thank you for having me, Seth.
Let’s go back in time. I know you weren’t always in the reverse mortgage business. How did you get started?
I grew up around real estate in California. My parents were realtors and investors. I remember even as a little guy, my dad used to take me around to look at houses and just talk to me about real estate. Conversation around our dinner table every night was about the different people they were helping. Real estate is in my blood.
There are lots of different areas of real estate you could be involved in. Why reverse mortgages?
In 2004, I started as a mortgage originator and then in 2014, I decided that I want to focus on reverse mortgages, because I saw baby boomers were retired at 10,000 people a day. This was the first generation that had to fund their own retirement. They had a ton of home equity of perhaps having funded their retirement as well as they had hoped they were going to live longer than their previous generations. I just saw it as a way to really help that population.
There are tons of companies that will offer reverse mortgages. How did you choose the one you were affiliated with?
I made a switch to Fairway in 2014 and there were some more things I liked about it. One, we sell direct to Fannie Mae, Freddie Mac, Ginnie Mae, which means less documentation we need to receive from the borrower. It also means we have a very strong balance sheet. I liked the name Fairway. It’s founded to do things the fair way for people. I like the fact that we’re very friendly and generous to wounded warriors, for example. We’ve given away I think 30 houses from donations from employees, mortgage free. I just really like the culture. I like the people. It’s a great company. We’ve grown every year since I’ve been here. In fact, we’ve doubled almost every year since I’ve been here, close to $17 billion in loans in 2016. We’re at top nine mortgage company in the country, top thirteen out of 100 reverse mortgage company in the country. It’s an amazing company.
What do you like best about what you do?
I think it’s just so rewarding when you sit with a senior couple, a senior or maybe a widow even and they’re at the point in their life where they really can’t afford a mistake. Just to educate them about how reverse mortgage can help them and to give them some options. To show them how it can solve their cashflow problem perhaps or accomplish a dream they have. Help them leave a legacy or help fund insurance or medical situations or problems or challenges they have. It’s just very rewarding for everyday to be able to make a difference for people.
I know you’ve written a book of case study examples, people who have gone through this process. Talk a little bit about that.
There are so many ways that reverse mortgage can help people. This was a loan that’s overseen by HUD and the FHA, which is the Federal Housing Authority. I wrote a book just to show people the many uses that have reverse mortgage can have. It’s called The Swiss Army Knife of Retirement Cash Flow, stories that offer hope, peace of mind and financial certainty. It’s just stories of how people have used reverse mortgages to improve their life and to give them all of that hope, peace of mind, financial certainty. Quick story, I closed a loan for a girl, and she said, “Do you know what this has done for me?” I thought I knew it eliminated their mortgage payment but I said, “No, tell me.” She said, “Now I can sleep at night. I don’t have to worry about money. I’m not going to be stressed out about money anymore. You’ve taken that pressure off of me.” Those are the kinds of things that just warm your heart and make it worthwhile.
Why write a book about it?
There’s so much misinformation and myths out there about reverse mortgages. This is a way to educate people through story to say, it may not be what you think it is and you may not know what you don’t know. Here’s a way to just explain how reverse mortgage can positively impact people. By the way, the government changed some laws a couple of years ago to make it more attractive for seniors. Whereas before maybe loan was of a last resort, now we’re seeing even wealthy individuals take advantage of this to put their equity to work for them. There have been some great changes made and there are some things on the horizon are going to even make it better for seniors.
You talked about misconceptions. What are some of the most common misconceptions about a reverse mortgage? I know you talked about how even wealthy people are using it. What are some of the most common things you hear as to why people don’t do it?
I think the biggest thing I hear is that you’re going to lose your house, that somehow you lose title to your house. That’s not true. The homeowner always maintains title to their home. Of course, it needs to be said that with a reverse mortgage, they still have to pay the property taxes, homeowner’s insurance, maintained the home, etc. That’s what they do now anyway, so it’s nothing different. Another misconception is that they somehow going to owe the money even if they get over leveraged. In other words, if they owe more at the end, when they move out or sell the home, they are the heirs that are going to owe that money. The beautiful thing about a reverse mortgage is the house owes the money, not a person, not the homeowner, not the heirs that’s called a non-recourse loan. Even if they do end up underwater, which is a remote possibility, but unlikely, but it could happen. Even if that were to happen, every reverse mortgage under FHA comes with mortgage insurance. At the end, let’s say they live to be 100 and they owe more than the house is worth, they just hand the keys back to HUD or FHA. They walk away or their heirs walk away without any obligation that they owe because of this non-recourse loan.
That’s a great solution and I’m guessing lots of people do have that misconception that they’re worried about losing the house, or worried that their kids won’t get it or something like that. What is your biggest challenge right now in terms of getting the word out to the marketplace that this is really an amazing opportunity for them?
Reverse mortgages, a lot of the business comes through financial planners. Financial planners are the ones that sit with people and know their financial history. What it looks like going forward. Are they going to have enough money in retirement? A lot of what we do is we do seminars for financial planners as well as potential clients just to help them see that this could be another pillar that they can draw on with home equity. I’ll give you a quick example. When we do our seminars, we talk about three buckets. The first bucket is the income bucket. The second bucket is the asset or investment bucket. The third bucket is home equity. We encourage people to consider using the home equity bucket first and if they do, it allows more time for bucket two, the assets and investments, to grow and bucket one, if they delay social security, they get even more money as you know.
You talked about the amazing growth at Fairway, that you’re a part of. What do you think it is about Fairway that differentiates them from so many of the other mortgage companies?
I think it’s the culture. When I was looking to make a change a few years ago in 2014, I looked at a dozen different companies. At least coming from a bank which had very tight underwriting, antiquated systems. I really wanted to work at a mortgage company and I wanted to go someplace to work where it was fun and one of our core values is to have fun. I narrowed it down to two companies and actually left more money on the table to go with Fairway just because the culture is just amazing. I’ll give you a quick example, one of our core values is speed to respond and we’re one of the few companies that can actually close a mortgage in 30 days on the purchase. Most companies have 45 days or more. It’s those kinds of things that we do that just set us apart to where we really are one of the leaders in the mortgage industry. I’m very happy to be affiliated with such a quality company as Fairway.
Another thing that’s important to know, a few years ago, our CEO is being approached to sell to a venture capitalist firm. He said, if I’m going to sell Fairway, I’m going to sell to the people who built the company. That’s happening. He’s in the process of selling the company to the employees. I’m a minority owner, very minority. The point is all of us now have a stake in the game to where we really want to do the best we can for people just because we’re part owners of the company. I think that has made a difference too, just to up our game a little bit and just do the right thing for people all the time. Make sure that they’re happy and satisfied so they’ll refer people to us because I have a referral business, I work by referral.
As an owner it certainly gives you a different mindset than it’s just let’s say a W-2 employee. What else do you want to share about what you’re doing that you didn’t think I ask you?
I always say this, mortgage companies and loan officers aren’t created equal. It’s a very competitive space. For Fairway to be around since 1996, been through the financial crisis of 2008, come out of that stronger. I think it speaks a lot about Fairway. I think what people need to look at when they get a reverse mortgage, they need to ask themselves four questions, in my opinion. Is this the right product? In other words, is this product going to do what I need it to do? Is this the right time? The research shows from Boston College in Texas and the people that research these kinds of things, that the gist of that is the sooner somebody can take one, the better.
Age 62 is the earliest somebody can take one. Let me give you a quick example why somebody wouldn’t want to take it early. A reverse mortgage can come with a line of credit and it’s like investing. You don’t have a financial planning background. You always used to tell people start investing in their twenties so that when they’re in their 60s, they’ve got a 40-year history of growth of those investments. Same thing with a line of credit. This line of credit grows compound interest of 5% or more a year. You want to get that line of credit working for you as soon as you can. Soon is better than later. The third thing is, is Fairway, the right company? Do you feel comfortable working with Fairway and who they are and their values and their history and their reputation inside, and then am I the right person? Am I the right reverse mortgage plan with that you wanted to work with, because this is a complicated transaction and I always tell people, “You need to understand it and feel like this is the right thing for you to do.” We never pressure people. We just give them the different options and let them make their own decision.
Selling is telling us what it’s all about, education.
This is a big education piece. That’s why we have a lot of videos on our website. We wrote a book, etc., because we really want people to understand a product and how it can help them.
If someone who’s watching this or listening to this is interested in talking about a reverse mortgage, your state specific, right? The way you’re licensed?
Yes. I can originate loans in Colorado. However, Fairway has a network in all 50 states. We’re the only company in the country that you can sit down face to face either in our office or in your home, across from the desk or in your living room and talk with a reverse mortgage planner and get your questions answered. You don’t have to do it by phone or whatever. A lot of times seniors tell me, I did some research online, but when I decided to do, I wanted to sit down with somebody and look them eye to eye. We actually have people in all 50 states who can do that.
For our folks watching this, listening to this, interested in seeing how potentially reverse mortgage could work for them, send them to ReverseMortgageRevolution.com. On there, not only you have written an incredible, information guide, Betty’s Story, A Prudent Senior Citizens’ Guide to a Reverse Mortgage Loan. Then as your book is published and comes out, it will be up there as well, I’m sure.
We offer a free chapter of the book. For somebody that wants to get more information, they can go on there and get a free chapter. I encourage people to take advantage of that.
We’ve been here with Kevin Guttman of Reverse Mortgage Revolution. Kevin, thank you so much for joining us.
Thank you, Seth. I sure enjoyed it.
- The Swiss Army Knife of Retirement Cash Flow
- Betty’s Story, A Prudent Senior Citizens’ Guide to a Reverse Mortgage Loan
- Reverse Mortgage Revolution
About Kevin Guttman
Kevin Guttman began his career in the non-profit sector raising money for people in impoverished nations to have clean water, medical clinics, schools, and small business loans. After twelve years of traveling and spending time in a few dozen nations, he transitioned to the business world in 2004. Growing up in a real estate family, Kevin knew that once he joined the business world it would be in real estate or mortgage lending. He found his place in mortgage lending, and continues his work today as a trusted and reliable Mortgage Banker.
Kevin has helped hundreds of clients with their home financing needs. His vast experience within the industry makes him a valuable source of knowledge for his clients. Kevin uses his strong communication skills to explain to his clients their available loan options. He takes pride on his strong leadership to walk this clients through the loan process as they choose the best home financing option for their situation, family and home. Kevin works by referral from his partners and past clients. He is very passionate about helping retirees with their home financing needs. The key to Kevin’s success is being very client-centric to ensure a seamless loan process that is driven by strong customer service.
Kevin resides in beautiful Colorado Springs, CO, and loves living there. He considers himself very fortunate to be married to the same beautiful woman since 1988. Kevin is a father to five children and now a grandfather. When away from work, he is a voracious reader, sports enthusiast and even referees high school basketball and football games on the weekend. Kevin is also an ordained minister and serves at his local church as a volunteer pastor.