Word Of Mouth Marketing & Referrals Help Reverse Mortgage Business Grow

More accurate information about reverse mortgages is becoming widely available, forcing myths – such as, “The bank takes possession of the deed” – to the sideline. Information about reverse mortgages also has begun to spread through referrals and word-of-mouth, increasing confidence that they are a legitimate solution for cash-strapped seniors looking for a way to stay in their homes.

According to Judith O. Smith, a Fort Worth, Texas lender, reverse mortgages in the past have gotten a bad reputation because of their complexity, exemplified by nearly twice as many documents to sign at the closing table, compared with forward mortgages. “And, the amortization schedule can be very intimidating to potential borrowers,” says Smith, noting that “if people are not expecting this, or it is not clearly explained, it can be a real deterrent.”


Prior to offering reverse mortgages, Smith had spent decades making traditional, forward mortgages. She was contacted by a former employer interested in closing his business and coming to work with her and learning about reverse mortgages. “As someone whom I trust and respect, when he told me that he was interested in reverse mortgages, I knew it was something I needed to learn more about,” says Smith. So, together they attended workshops and seminars and eventually became more confident in the ability to identify potential problems and opportunities.

Today, Smith’s firm closes between 25 and 30 reverse mortgages per month and as many as 10 of those might have come through a referral, she says.

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  • I’ve said since I’ve been in this business (two years: just a baby compared with the rest of my peers) that the FHA HECM application process is flawed with
    bewildering paperwork for Seniors. In my opinion, the whole step to apply for an FHA HECM could be done with very few pages. Until an FHA Appraisal is done, the numbers on the GFE are just a guess. I’ve seen
    inflated Line of Credit figures which do not take into consideration possible home repairs required to meet
    FHA standards. Unless one is GOD or owns a chrystal ball, who truly knows what a home is going to be worth 5, 10, 15 or 20 years from the closing date. I always fall back on the FHA/HUD/GOV insurance program to assure my fellow Seniors they won’t leave a debt for their Children if they take financial advantage of an FHA HECM. The program is a Blessing; the existing application process is an unnecessary, paperwork nightmare.

  • Why do we still have to rely on word of mouth marketing and referrals to get the truth out about Reverse Mortgages? This is a highly regulated government program, not a scam. I think the media is finally becoming better educated but they never mention it’s a “non-recourse loan”, which helps explain part of the “high fees” they never fail to mention. Have we just made it too complicated? Why not just compare it to a conventional mortgage?

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