Everyone has a reason for doing something—a motivation that drives them to a higher purpose in life. While some may plot the the next phases of their lives in an organized storyline, others find their true callings as a byproduct of life’s unexpected circumstances.
At least that’s how it all turned out for John Kennedy, a Seattle-based Home Equity Conversion Mortgage (HECM) advisor for top-20 reverse mortgage lender The Federal Savings Bank. At 90 years old, Kennedy has been actively focused in the reverse mortgage industry for the past two decades—almost as long as the HECM program has been in existence.
Conventional wisdom would indicate that most 90 year olds would have retired long before their ninth decade, but Kennedy isn’t like most 90 year olds. Rather, he’s chosen to remain active in the reverse mortgage industry for the better part of 20 years.
A World War II veteram, public speaker and author of articles focused on financial planning, Kennedy prefers to limit his clientele to his peers, many of whom are predominantly seniors. Apart from his work with The Federal Savings Bank, Kennedy is also a founder of the Aging in Place Council of Washington, charter member of the Alliance for Retired Americans, as well as a member of both the Puget Sound Alliance for Retirement Americans and National Council of Senior Citizens.
Kennedy recently caught up with Reverse Mortgage Daily to talk about what drew him into the reverse mortgage industry and why he continues to remain focused on HECMs to this very day.
RMD: How long have you been focused on reverse mortgages?
JK: I first began investigating HECMs in 1995. I don’t know when I wrote my first application, but it was somewhere between 1995 and 1999.
I’ve been involved with reverse mortgages for about 20 years.
RMD: What initially attracted to you begin working with reverse mortgages in the first place?
JK: I’m a financial planner by trade. I was originally licensed in securities back in 1960. At that time, I was a mutual funds salesman for Putnam Mutual Funds, and I was dualy licensed in securities and life insurance. I then got involved with Financial Freedom Senior Funding Corporation in its early days during the 1990s, which was just a natural maturation from what I had done before.
Somewhere around 1999-2000, HUD made regulations that would not allow a person to be involved with reverse mortgages who was also licensed in life insurance. They felt it was a conflict of interest, so I had to choose between being licensed in life insurance or licensed in securities.
Why choose reverse mortgages? [At the time] practically no one was involved in reverse mortgages; I was one of the first people in the State of Washington to get involved with them.
It used to be that I was getting a lot of customers just from making a solicitation either by mail or some kind of advertising, or by giving seminars at the local library. I would get customers because people had their home and read about being able to borrow and not pay it back.
[In deciding between securities and reverse mortgages] it was just a matter of which is the better product? I knew a lot of financial planners, so I could refer securities business to them.
RMD: Why have you continued to focus on reverse mortgages for so long?
JK: Of course, it was so I could make some income and I was pretty good at it. I have an in-depth background and understanding of reverse mortgages amongst the top people in the industry. It’s something I know.
I get a self satisfaction out of helping people do something they don’t know how to do. At 90 years old, you don’t really get retired. I feel I’m much more productive in helping people solve their financial problems.
So [continuing to focus on reverse mortgages] is partly a matter of self satisfaction and partly a matter of necessity.
RMD: How long have you been with The Federal Savings Bank?
JK: I’ve been with The Federal Savings Bank for over a year now, so it hasn’t been too long. They are a good organization, federally chartered so I can do business in all 50 states rather than just one.
And the company has some powerful people to work with, including [Senior Vice President, HECM Division] Rob Balmer, [Executive Vice President] Mike Crossett, and [Senior Vice President, HECM National Division] Maggie O’Connell, who I’ve known since the 1990s when we were both with Seattle Mortgage Company.
RMD: Reverse mortgages have undergone some serious program changes since the late 1980s, when HUD rolled out the Home Equity Conversion Mortgage program. How have you kept up to speed on all of the new rules since then?
JK: Mostly by the internet. There is an awful lot of information on the internet. That, and of course my employer, The Federal Savings Bank, keeps me up to date and informed. They are a solid organization and have some very capable people. Of course, the company was created by veterans—mostly West Point graduates—which is pretty impressive.
RMD: I understand you are a veteran as well.
JK: I’m a veteran of World War II. I was born in 1925 and the war [for the U.S.] started in 1941. When I graduated high school in 1943, I went directly into the U.S. Navy. All of the able-bodied men went into the service, while the female population went to work in the factories, shipyards and so forth. We had an all-out effort.
I spend about 30 months in the Navy during WWII, and after I got out in 1946, I qualified for the G.I. Bill of Rights and went to college.
RMD: Did you find any similarities between serving in the military and working in the reverse mortgage industry?
JK: Not necessarily. I didn’t know about investments at that time. When I was in high school and then went to the Navy, my major interest was sports—I was a jock.
I didn’t know what Pearl Harbor was, but I soon learned on December 7, 1941. It was a Sunday and I was walking home from church, and somebody came out and said the Japanese bombed Pearl Harbor.
So I went into the Navy and when I got out I qualified for the G.I. Bill of Rights and went to school. Instead of using [the grant] for vocational school, I used it to study philosophy and graduated from Seattle University. I then went to Loyola University in Chicago to study psychology.
That gave me a lot of insight into many, many things and has been a basic background of my life since then. With my degree in philosophy and psychology, I learned than I can learn any subject matter just by going to the university and getting all the books they had on a particular subject on their curriculum.
RMD: So how did you make the transition from philosophy and psychology to the finance world?
JK: At the time, I was married. I had a wife and a child, and that kind of changed the program. I had to figure out what to do to make a better living than what they pay an amateur psychologist. At the time, society was different—there wasn’t a great demand for psychologists, except for teaching, but it wasn’t a practical vocation back then. So I changed direction at that time to industrial sales back home in Seattle. It was a matter of adjusting to circumstances.
After a period of years, I was working with Crucible steel company, but it wasn’t a very fulfilling job. That’s when I became interested in finance and got recruited as a mutual funds salesman for Putnam. It was just a matter of finding a vocation, which was a bit more satisfying than selling steel.
RMD: In your experiences, what was the most impactful change that has happened since you’ve been doing reverse mortgages?
JK: Of course, the 2008 financial problems were quite impactful. That scared people out of doing almost anything.
Prior to the crash of 2008, people were starting to increase their use of reverse mortgages. Because of the housing market bubble, they could take advantage of housing values that were rising too fast.
When we had the crash, people not only got scared, but the values of their homes went down and some of them got underwater [on mortgages]. The whole economic system got blown up. It was a national catastrophe. That was serious for everybody.
RMD: In your opinion, what are some of the biggest misunderstandings of reverse mortgages that you’ve encountered with people?
JK: There has been a lot of misinformation and there has been a lot of negative publicity, and so a lot of people are having negative attitudes toward reverse mortgages and don’t really want to investigate them because of that.
The fact is that most people don’t have a background in finance or economics, so it’s difficult for them to have a feeling of confidence in their judgement in regards to a financial product like reverse mortgages. That is partly the problem, but mostly it has been misinformation.
The publicity and public relations, in my opinion, are the most powerful things for reverse mortgage.
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