The National Reverse Mortgage Lenders Association released additional details regarding its proposed public awareness campaign to help improve the image of reverse mortgages in the eyes of the public.
The primary message of the campaign will be that dealing with NRMLA members, “seniors can borrow with confidence”. The initiative’s purpose is to inform the public, policy makers and the press about the virtues of reverse mortgages, the practice of responsible lending, and the commitment of NRMLA and its members to help seniors make informed decisions that consider both the attributes and vulnerabilities of this product said the association.
“There is a pervasive feeling within our industry that both the reverse mortgage and the professionals who deal in it have been unfairly misrepresented,” said NRMLA. “The negative portrayal of the product and of industry participants has impacted both business and morale. The fact that this is a well-thought through, creative and compassionate financial product that provides comfort and aid to seniors at a critical juncture has been drowned out by an ongoing barrage of criticism that too often is based on lack of understanding, misinformation or convenient clichés.”
To help reverse this trend, NRMLA is proposing a national public relations effort to inform the press created by a major outside firm with vast experience in image makeovers as well as well as an aggressive education effort to inform both federal and state government officials. In addition, if affordable, the campaign would include a marketing effort aimed directly at consumers that puts the industry out in front of the discussion instead of on the defensive.
In order to make these plans a reality, NRMLA has proposed a budget of $1.5 million for 2010 and $1.5 million for 2011 which will be funded in three stages. The first will be compromised of the association contributing $20,000 from its 2010 budget to retain the services of a public policy advocate to address immediate, time sensitive issues of concern. The next stage will look to members for contributions, any contributions of $25,000 and up annually will receive a seat on the”Executive Advisory Board” of the initiative. The final stage will consist of a $15 assessment on each reverse mortgage loan closed by both wholesale and retail departments of lenders. Wholesale lenders are being asked to remit on behalf of their brokers said NRMLA.
While the industry expects to see volume drop from last year, the proposed budget goals seem to be within reach. If the industry endorses 80,000 units (conservative estimate) during 2010, the campaign would receive $1.2 million in funding directly from those loans. This leaves a shortfall of $300,000 which would be made up by members and other vendors direct contributions.
NRMLA is pushing hard to get the ball rolling on the initiative as soon as possible and we were told the association plans to announce a list of initial lenders who have agreed to participate in the coming days. According to the proposal sent to members, companies who wish to take part have until March 26th to confirm participation.
According to people we’ve spoken with, lenders want to make sure everyone is on board before agreeing to participate. Several lenders (both big and small) have expressed concern regarding a lack of details about exactly what will be done with the money, but it sounds like everyone is on board.
However, one executive at a reverse mortgage lender in the top 20 expressed his concern to RMD and asked, “is a board of the biggest players, combined with NRMLA staff the best way to represent the voice of the entire industry?” Without being able to write a check for $25,000 he said that smaller brokers and other participants won’t have a way to ensure their interests are protected and voices heard.
Other people voiced the same sort of concerns about the process and everyone agreed the most important issue is transparency for how the campaign is run and funded since all originators will be contributing to the fund even if they can’t or decide not to contribute enough to be a member of the executive advisory board.
According to NRMLA, the funds allocated will be managed by association and the executive advisory board comprised of both NRMLA members who support the fund and those appointed by the Board’s Executive committee. Exactly how much of the funds will be spent on each part of the campaign isn’t yet known but without agreement from the big lenders, the awareness campaign won’t happen.
Since the top 10 lenders in the business control almost half of the total market share in volume, they will be responsible for funding the majority of the campaign.