Reverse Mortgages for Life Transitions, Fire Recovery and Divorce, with Kal Antoun of SMPL Mortgage

0:00 Have to offer. Okay. Hey, welcome to the Reverse Mortgage Podcast and really excited to have here a woman who's committed to helping women and wealth and whoa. What was the third one? The three W's there. Women, wealth, and wisdom by educating them. Really excited to have today Kal Antoun who's with SMPL mortgage. Kal, thank you so much for joining us today.

0:20 Thank you, Bill, for having me. Real exciting. So talk about specifically how does a reverse mortgage help women with wealth and then how do you help them with the wisdom to get them there?

0:32 There you go. Thank you so much. That's a great question actually. So you know reverse mortgages are as you know they're an incredible product and just like you would save money in a retirement account or in a savings account. Same thing with your home, right? I work with a lot of women who are kind of finding themselves either at that stuck in the middle situation where they've lost their loved one, they're going through divorce, or they've never been married and it's just them and they're looking at retiring and what does this look like? Where's the cash going to come from? So, what we do is we talk about what are great financial goals for them. Oftentimes, they'll tell me, "Kal, I still haven't worked on my house. I don't want to pay three $4,000 a month. I would rather spend that money traveling with my grandchildren, with my girlfriends, what have you. So, reverse mortgage gives them that option, right? They can use a portion of their unused equity. We throw them into three different buckets. We can pay off an existing mortgage, therefore giving them an increase each month, you know, by not having to make that payment. We can set them up with a line of credit, right, that they can use or let it grow so that when they do need to use it's there for them. Or we can always set up, you know, 10-year payment plans where they can get a portion of that equity each month. And we have these conversations all the time, you know, what makes sense for them.

2:08 You know, the way I describe a reverse mortgage, and I'm not an originator, full disclosure, I just do real estate. To sell houses primarily probate, trust, real estate, working with attorneys across the country. But I describe reverse mortgage kind of like a Swiss Army knife. I have a Swiss Army knife right here at my desk, right? It's not a great knife for defense purposes. I have a I have a great knife that I use when I need for defense purposes. It's not great for cutting steaks. We have steak knives, but it's a knife. And then it's not a great screwdriver. It has a Phillips and a flathead both. Not particularly good, but it's right here when they need it. And I think the key of the reverse mortgage is it's not a great this or that, but it might be the right tool that you might need when you need it. So you mentioned a couple different scenarios. Let's take them one by one. First, the line of credit. Somebody has equity in a house. They don't need the money. Let's say they need any cash. They have stocks, bonds, equity, income, whatever. They're living their life. Their best life is good.

3:05 Why might somebody want the line of credit there? Building in the equity of the house. It costs some money to do that. What's the benefit of having the money available to them?

3:14 So, the benefit of having the money in the terms of a line of credit. So, first of all, in a reverse mortgage, it's a non-reourse loan. So, the only thing they can ever come after is your home, right? They can't come after all your know when the market goes down, lines of credit tend to either be frozen or they get converted into fully amortized with principal interest payments. But the beauty of a reverse mortgage line of credit is first of all you are not incurring any interest or principle on that if you don't use it. It actually is there as a safety net and it's there for when I'm going to give you an example. I love to use stories. I actually wouldn't do any of this stuff that I wouldn't do for my own family. My mom found herself at in her 80s with my dad who passed away. You know, very independent woman. She lived in a beautiful home. She was going to live and die in this home on her own terms. She though needed a line of credit because we didn't know she did not have long-term care insurance. So, who's going to take care of her besides my sister, my brother, and I? She needed full-time care, right? So, we set up this line of credit for her early on. It grew slightly through the years until she needed it and then she was able to draw down on it as a long-term care policy. She brought in inhome care, had a wonderful woman end up living with her for 10 years. My mom didn't pass away till 98 years old. And I'm going to tell you something. It's partial because of the reverse mortgage, because of the line of credit, because it gave her the freedom to know that she could live life on her own terms, pull it down when she needed access to it. She took a little bit out to help make her house a little bit more senior friendly. You know, the little bars on the on the bathroom, making the door a little bit wider for her little walker and what have you. So, there's a lot of benefits to having this line of credit ready when you need it.

5:14 Yeah. I have friends who their mother needed to go into a care facility,

5:24 Had a house paid free and clear worth about $2 million. Yeah. Had no loan on it, which is great. You have $2 of equity but had no liquid assets and at her age couldn't qualify for a normal line of credit. What she didn't what they didn't do was reverse mortgage because they thought well we'll just have her live with us while put the house on the market and sell it and how long could that take? It could take you know three or four months or so except for the house was in the palisade so guess what happens house burns down

5:52 Now a couple things. One, the house went down in value, and two, insurance is taking longer as they try to work out an appropriate settlement versus had they just advanced reverse mortgage for maybe $3, $500,000, they could have bought the property or put her in the prop, whatever they wanted to do and be on with their life, they still have to settle the house. They still have to, you know, deal with the insurance company at some level, but at least they would be moving forward rather than stuck with mom living in the house and in a situation that just isn't really tolerable. So again, I think I think the line of credit can be for some people like an insurance policy that you may not need it. You hope you don't need it, but if you do need it can really solve some problems.

6:30 Oh, Bill. Absolutely. And I'm sorry about your friend in the Palisades. I personally live in Altadena, so I know firsthand what this feels like. I am very lucky. I did not lose my home. Our the fire burned through our yard to our structures and all my neighbors around. I have a huge client base in Altadena, over 80 clients who lost their homes. A nice chunk of them who had reverse mortgages. And I'm telling you, those individuals with those lines of credit are really in good shape because they're not having to make payments,

7:04 Right? They're deciding on their own terms again, should I stay or should I go? They've got access to the money. So again, it a wonderful insurance policy. It's not true of all risk mortgages. Check with a consultant. But on the HECMs and the federally insured ones, it's true. There's no recourse. The loan terms don't change because of the fire, right? And so those people have the opportunity to access the cash even after the fire and they have to pay it off just because the fire burned down whereas the insurance otherwise who knows what that's

7:36 There's a million stories on that. Let's not go into that whole thing. There are and I always say check with your professional you know advisor to make sure you know what you're doing but yeah it is it the reverse mortgages is a wonderful product you know it's come through so many changes right I mean I do a class called the myths realities and misconceptions because my job is like I said I want to educate

8:00 I want everybody to know that this is a tool out there that is a good product it's heavily regulated changes were made you know in 2014 14, 2017 and ongoing and it could be the right product for the right person. It just is. It's a good product.

8:15 Well, not just the myths, but the truths of the old version of the product because I was an originator in my prior career and I did a few reverse mortgages. There was a lot of problems with a lot of fraud. A lot of the worst fears did come to fruition. Yes, the product has since been changed, been regulated, been limited, been a completely different product today. I call this reverse mortgage 2.0. The 1.0 was a disaster and people had these myths or these stories but they were true based on how the product was. But that's not how it is today. And that's really what caused me to get in this podcast is when I realized some of these changes that were made and I and I'm a real estate professional. I deal with lenders literally every day. The funny part was I was actually shopping for a house myself. I live here in California with my wife and I kind of fantasized about moving to Florida. Pay no taxes. We used to live in Florida. We're married in Florida. Yeah, I love South Florida. And so I, you know, we only have so much cash if we don't sell our house. We live four blocks from my grandkid. So unless I get divorced, I can't afford to get divorced and to move. So, but I have about $500,000 of other assets. And I was shopping and I realized that, well, I don't have just $500,000. I probably have about $800,000. I could probably get a $300,000 HECM for purchase, a line of credit. I mean, a reverse mortgage for purchase and not even have an extra payment and then add my $5,000 cash on top of that. So, let's talk about let's pivot a little bit from the line of credit usage to using reverse mortgage for purchase. So many of my sellers are buying a property for cash. They cash out a $2 million house in Altadena and West LA and they move to Florida, Nashville, Tennessee, Texas, wherever.

9:56 Buy a nice million-doll house for cash. I say, "Whoa. Get a line of credit for the maximum so at least you have the line of credit available or keep those assets in your bank or investment program to get to them. Talk a little bit about the purchase process of which is way underutilized just not even close to how it should be used.

10:15 100%. I mean reverse mortgages now it's barely one and a half 2% of the market which is which is just shame because it's out there to really help. So the reverse for purchase I call it the HECM for purchase. Now I'm also a divorce lending specialist. I studied with the doctor of

10:31 Well hold on hold on are you a divorce comma lending specialist or you're a divorce lending specialist a divorce lending specialist okay and I studied with professor Murray she's a Harvard grad and attorney and our entire focus is on using the HECM for purchase so let's use that example working with a client right now same she's going to move to Florida by the way it's her dream it's her goal you know later in life in her early 70s found herself getting a divorce first with her husband and they're going to, you know, sell the property. They're going to end up $2 million property. She's going to end up with about a million dollars. And you know, as far as cash goes, this is what she's got. Well, I'm like, why would you go take this million and pay cash for a property in Florida? You could purchase a million-doll property, but you'd only have to put down $500,000. You take your other 500, and I'm giving you very broad strokes, right? The numbers depends on the age, the area, you know, that type of thing. But the broad strokes are you put down the $500,000 on the purchase

11:36 With no payment due with no payments. You take $5,000 reverse mortgage for purchase. You take your other $500,000, you put it in the bank, and it's a win-win situation. Now, you bought a home, you've kept cash, and you have no mortgage payments the rest of your life on this property. And when you and we say the bank, what we really mean is invest the money. Hopefully you get about a 7% return, which $500,000 is about $35,000 a year of extra income that either grows your portfolio or extra income to you. $3,000 a month to spend on traveling or playing with your kids or grandkids or whatever you want to do with it. So

12:13 Absolutely, there's the money is taxree. You can do whatever you want with your reverse mortgage proceeds because that's your equity until you sell the house is free,

12:22 Right? I would imagine also in divorces reverse mortgages would be a good way to kind of start the settlement process. I find so often and fortunately we've had several of our closest friends go through divorces somehow. Miracle miracles I've been married for decades one day at a time. I'm still good. She has

12:42 I just celebrated my 40th wedding anniversary. Good for you. It is a miracle. I got my husband an award. He deserves one. Okay. I'm telling you as a husband he deserves one. We'll get enough credit. We'll have another anniversary in November if I make it. It's one day at a time. You know, I don't want to I don't want to spike the ball in the goalpost. My wife's in the other room, so I have to be nice. But I'm going to say that in divorce proceeds, so often I find that they're battling the battling, the battling, the battling. And part of the problem is they're kind of stuck in the same scenario they were when they got divorced. And if you can just get one of them out of the house or into a purchase into their new community and get started with their life and fortunately here in LA there's a apartment complex in our neighborhood that's very common for divorcees to move in while they decide what to do with the house and I always feel like you know if you can you come with some settlement and maybe you haven't sold the house yet but you can get $500,000 or so and go buy a condo or a house and move and meet some new people and get a new life it puts a little juice into the divorce process to move things forward. And so I would think the reverse mortgages would be a great again like a like a Swiss Army knife. It's not for everybody, but for that one person,

13:48 You know, I'll share a story with you. I'm working with a client who is going through a divorce. Another one that's not going to purchase. She's decided to stay. But it makes great financial sense for her. The house is worth a million. You know, everything's a million and a half,$2 million dollars out here, right? She, her husband, they own another property. She's, you know, foregoing the other property, but she wants to keep her house. She does not qualify for a mortgage. She doesn't know how to pay her ex-husband to give him his portion of the equity. The reverse mortgage is perfect for her. Yes. Because it allows her, and she has three children who all sat in on the meeting. I love to talk to the families and they all felt, "Mom, where else would you go to live in this kind of a home just to pay your taxes and insurance, right?"

14:36 Right. You can take the money out, pay dad off. We did set up a line of credit for her because they love this safety net, the little insurance policy for her moving forward as she ages. She has no payments. She's paid off. She took a little money to pay off some debt that she had, bought herself a new car, and voila, there she is. She gets to stay in the family home. She doesn't have to make a payment. She has a security net. Her ex-husband is happily going along his way. And this was all accomplished by the reverse mortgage.

15:09 You don't pay taxes on the house until you sell it. So, if you keep it, if I'm going to keep it, you're deferring those taxes in a future year when probably you're going to make less money. Generally speaking, the older you get, the less income you make once you get past a certain point.

15:22 And that's what I'm thinking. Why would I want to sell property in my prime earning years still when 10 years from now I'll probably just be living off my income and one year plan ahead, you know, and structure properly and take the losses then. So the again the tool vers, it's like a Swiss Army knife. There's so many different ways you can use it and I guess so many ways. So many ways we work with financial adviserss part of their strategy. You know, when the market's down, defer social security. I mean, there's all kinds of genius things to do with a reverse mortgage. It's why I love especially love talking to women. So, again, I go back to my mom.

15:59 Well, for the record here, I don't identify as a woman. I'm just I'm not sure if you're confused. I'm just saying straight up, okay? I love women. I'm married to one. I have a daughter who's a woman and a mother. Love women, not one. Just FYI.

16:14 I know. And I know that. I but I do I do a little h a quarterly meeting with women and we have women wealth and wisdom where I bring in professionals like you that talk about real estate. I bring in financial advisors. I bring in trust and estate attorneys and we talk about how could a reverse mortgage how to use your home the biggest asset you have. Right? When my dad passed away my mom didn't know how to write a check. She didn't know where the money was, right? She didn't know. And so, we have to empower one another to be able to understand these great things,

16:52 You know, and the tools that they have available to them. So, you start you talk about estate planning and wealth advisors. And, you know, generally speaking, I'm not one to promote get your reverse mortgage, take the cash out, invest unless you have something particular that you know you can get that kind of return. You know, I happen to have a business where we have a fund

17:11 That we use. We advance heirs. We advance estates money and we have return on investment that's kind of pegged to higher enough where I could borrow whatever I want and arbitrage into that. But most people don't have that and generally that's not a good strategy. The wealth advisor will talk you into it if you go for it, but really that's where reverse mortgages fell apart the first time around that got abused. That said, there are occasions where you can straddle something or bridge something that makes sense. Meaning you're not forced to sell a property. You're not forced to buy out a partner, you're not forced to sell something to pay something you love. Can you think of any examples when you've worked with wealth adviserss or estate planners where kind of the opportunity of pulling out some quick money solved a short-term problem not related to buying a house,

17:56 Right? So, and I agree with you, Bill, 100%. I don't advise pulling money out and investing it. It's not my thing either. I think you use your equity for things that you need. And when I'm talking to wealth advisors, it's those advisors that have clients that need to either defer the social security, right?

18:16 There's one now. Yeah. They maybe they have clients who maybe the stock market has gone down a little bit and they can't really take their RMDs yet.

18:25 And so they're trying to help them bridge that gap between taking the RMD or social security or whatever their financial situation is. And they're and they're still trying to make this large monthly mortgage payment. So that's when a financial adviser and myself would we would connect and think, well, how can we do this? How can we save him this $45,000 a month without having to tap into this or this yet, giving them those few more years that we need until we get there? And that's where reverse mortgage could be an amazing strategy for them as well,

19:00 You know, to stop the mortgage payment. Yeah. Yeah. Yeah. Okay. So, we've talked about a couple different ways to use the tool. Let's talk a little bit about the business side of it. As a businesswoman, you have a business called Generating Reverse Mortgage Business. Is your business focused more on looking for people who refer you customers, I.e. Wealth managers, you know, real estate agents, attorneys, or is it more direct to consumers where you're dealing with individual consumers you're educating and come to you or is a combination of both? So, Bill, I'm 100% referral-based. I am I am referral-based. I don't really interface with the general public. I love to do education. If I'm invited to speak, like you invited me, I'll come and speak. I did.

19:45 I work with the Arcadia Association of Realtors®, Pasadena Foothills Association of Realtors®, where I'll go in, give classes, give talks. So that I'll interface with general public but mostly my business is referral-based. I belong to several huge networking groups. I belong to several nonprofit organizations. I'm a past president, a board president for cancer support community here in Pasadena, now the San Gabriel Valley. And I, you know, and I have a large network of partners and friends that we all collaborate with. And that's pretty much how my business is run pretty much.

20:26 So I know you're one of the top in the business. If you were talking to a reverse mortgage professional starting out or struggling, they got into this business and they haven'tite yet found their wheels, what are one or two things you'd recommend them to do to either add to their business or get their business on the right start? Well, so I and I encourage mortgage advisors to learn the business because they need I would advise them to get the education. I'm going to tell you can go ahead and get a designation called the CRMP, which is the certified reverse mortgage professional. I am educated. I did not pass the test yet. It's a bit tough. It's through Nurmala, which is the National Reverse Mortgage Lending Association. I would recommend they get to they become a part of that immediately because they we meet you know once a year nationally and then locally so that you can stay in tune. But I my biggest my biggest suggestion to mortgage advisors is get the education you need. Become certified.

21:27 Yeah. Become certified so that you really know the product so that you can help make good decisions. You know it's about that. It's about the education. You know, I've been in real estate for decades. There's about I've taken five different

21:42 Probate rel related classes and I have designations really mean much. I took a class which is good. The designations don't mean much.

21:50 In real estate, we give out designations for five bucks, I think, or with a gumball. But the CRMP in my experience, the certified reverse mortgage professional

21:59 Done by NRMLA, the National Reverse Mortgage Lenders Association, I stumbled into them as I was building this podcast out. It is the most valuable designation I've seen in my career in real estate by far. By none, no exception. Not close.

22:14 I agree with you. And I have taken all the classes. I've studied with the best. I did not pass it the first time. I'm not going to lie. It was very hard. There's no prep classes and what have you. I'll take it again. I just haven't I haven't done it. But for me, it was about doing the education. Right. Right. The other piece of advice I would give to a mortgage advisor when you're speaking with someone that's interested in the product, ask a couple of questions and then sit back and listen. Listen to their why. Listen to ask, you know, nine out of 10 clients tell you, "Oh my god, I've heard it's just terrible and this

22:53 What did you hear?" Yeah. And then just listen and then support your answers with real facts with real things that they can take away from that. Right? That's the best advice I can give to somebody that wants to do this.

23:08 You know, in real estate, you know, I used to coach salespeople and I would and I know that most sales people are scared to get what we call objections. Somebody ask you a question that may sound like they don't like you. Gee, I want to list with a bigger company or a smaller company or somebody closer or this or that. And I would say to him, the answer to the customer's objection is your opportunity to show them how good you are as a professional. Because if you can't handle their objection, how you going to handle their sale, how you can handle their loan in your case. And if you handle it well, they're comfortable knowing that there's a problem that comes up and inevitably there's problems that you'll handle effectively, whether it be with getting the paperwork or getting it through your underwriting or whatever the process is. And so I think that's great advice, which is listen to the customer. And there's your real chance to shine by showing them that you are understanding of the product, you know what to do, and you can be effective with it. So, thank you for sharing. I appreciate that.

23:59 Absolutely. Absolutely. I have a client right now I've been working with a year and a half, giving his entire family. I do not push anybody and make my suggestions. I give them the education. And I get it. I get it. They're, you know, the American dream. Own your home. Don't have a mortgage. Especially the older generation. And some of them feel like it's oh my gosh, it's a failure that I'm getting this reverse mortgage and it has to come to them. They have to see the benefit in it, right? And I simply explain like anything else,

24:32 This is your home. You've earned the right to the equity in your home. Use it. Use it before you lose it.

24:40 And using it is sometimes not just selling the house and putting in cash. Sometimes using it as getting a bank to lend you money or give you the right to borrow money. You know, it's interesting. The line of credit is so powerful. I have a I'm buying a real estate investment here closing here in about 3 weeks and I set up a line of credit to buy to buy the property and thinking, you know, I have cash and then I needed some credit for the rest. And I got it, you know, a few months ahead of time and but I didn't need drawn it till I closed escrow. And so I let it sit there and the bank one day just sent me a notice saying we cancelled lan access it for over 30 days like oh I just applied for that I have to go through the whole process again to get a line of credit and then of course it shows a cancelled line on my credit was like a mess versus reverse mortgage they can't do that so I think

25:28 No that's the beauty of that they won't shut it down they don't take back the limit that they've given you it's protected it's protected

25:38 Chase Bank will shut you down Bank of America shut you down shut you down reverse mortgage age that's insured by the federal government can shut you down. That's a part of the deal. And so this is a chance to make yourself a VIP in the banking world with using your own. You're really using your equity. Not even using it. You're just saying, "I have it." And the bank goes, "Okay, we'll recognize it and you can use it whenever you want. Please use it. We'd love you to use it." So, you don't have to.

25:59 Exactly. Well, Kal, obviously, very easy to talk to. You're very educational. I learn a lot every time I talk to you. For somebody who wants to learn more about you and or reach out, we'll put on the board here your website and then a banner with your contact info. Is that the best way to get your phone number and your email on the board?

26:14 Yes, absolutely. There's my phone number, my email. That's our website if you'd like to check out myself and our team at Simple Mortgage. And I got to say I just I love what I do. I will do this the rest of my life. I love it.

26:28 Well, it sounds like it. I think that's the other thing in talking to you that you sound like you really enjoy it and you say it with a smile and you always have. So, thank you for your service. Look, I started this podcast because I believe we as an industry should be doing we the real verse mortgage industry should be doing 10 times more reverse mortgages. We should be doing 10 times more%

26:48 Lines of credit than we are. Every customer I have has a house free and clear. I tell them why get a line of credit. Get a heck of a lease or a line of credit or something to protect your equity. Everybody buy us for cash to get some sort of either reverse mortgage loan or line or something at that time. To me, I just think there's 10 times more business out there than there than there is right now. And how you do that, you need to have a great consultant. And Kell, I think you're one of the best. So, thank you for your time today. I really appreciate it.

27:14 Thank you, Bill, for having me. I appreciate it. And for the rest of you, this is the Reverse Mortgage Podcast. We do it every week. We interview top producing originators like Kal as well as managers and vendors to learn how to be more effective in serving our customers using the reverse mortgage tool. Very powerful tool. I'm a real estate broker, but I have customers who should be using this more often in their b in their practice as far as buying a house instead of paying for cash or if you have equity, how to unlock that and use that. If I can help in any way, please reach out. If you like this podcast, please like, subscribe, put comments down below. If you want to be interviewed or know somebody who should, send that to me as well. I'm at Bill Gross Probate on social media.