Online Reverse Mortgage Search Traffic Remains Flat, Consumers Losing Interest?

Despite an increase in the number of baby boomers using the internet, reverse mortgage lenders tell RMD finding consumers on the web and converting them into closed loans continues to be a challenge.

Several reports have shown that seniors are turning to the internet more and more for information on a regular basis.  In fact, a study published by AARP said almost half of those surveyed between the ages of 50 and 64 said they’re extremely or very comfortable using the Internet.  If they’re comfortable using the internet, are they looking for reverse mortgage information?

According to data from IBIS software, the number of consumers using its customers reverse mortgage calculators continues to decline.  Data from a same group of lenders shows the unique number of consumers using its reverse mortgage calculators has declined by at least 10% each month over the last year.  The only time this group of lenders saw an increase is when they actively promoted the company on the web using press releases or receiving links from the media.

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Are consumers losing interest in reverse mortgages?

Data from the search giant Google’s (NASDAQ:GOOG) Insights for Search shows that consumer activity has remained fairly consistent over the past 12 months.  However, activity has fallen by more than 50% since its peak in early 2008.  (See chart below)

 

 

With lenders lowering the costs for reverse mortgages, one could expect an uptick in interest on the web, but we’ve yet to see anything.

Golden Gateway, a reverse mortgage lender based in Oakland, CA, has received significant amounts of praise from the mainstream media for its user friendly calculator and focus on the web said it’s seeing a change in the type of people using its calculator.

While it couldn’t provide data on the number of consumers using its calculator, after the principal limit reductions it started seeing a reduced number of qualified leads and has since changed its marketing approach significantly said Eric Bachman, CEO of Golden Gateway.

“We’ve been focusing on the credit union and other channel relationships we’ve developed rather than television and search engine marketing,” said Bachman. “We’ve found much higher quality (and more likely to be qualified) prospects coming from our channel partners.”

Despite the new challenges in developing qualified leads from the web, Bachman is confident online will be an important component and says even older seniors are using search more and more.  “The biggest issue with search is white noise,” he said. “You get a lot of traffic that is not qualified, so you have to get really good at qualifying the prospect online and during “triage” in the first conversations.”

Even if consumers aren’t finding lenders online, companies are seeing an increase in the amount of prospects who are comfortable communicating online.  Jason Levy, CEO of Guardian First Funding Group told the National Reverse Mortgage Lenders Association in an interview that 10% of its prospects are really tech savvy.

“In fact, many of them already have Skype, because they have friends and family in faraway places,” he said.  Soon the company will begin to offer appointments via Skype and through software like “Go to Meeting” to review documents and communications with consumers.  “I am not saying that the communication mode can apply to the entire business, but I want an infrastructure in place to handle these customers — after all, boomers are the fastest growing population online,” said Levy.

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  • There seems to be a general disconnect between the drastic lowering of the average age of borrowers and the information in this article. There are still many questions about marketing on the social media is effective when it comes to mortgages. It seems these questions relevant when it comes to advertising on the Internet as well.

    Then there is Ronni Bennett and her articles on “Time Goes By” about getting a reverse mortgage. She writes of her experience of emailing lenders: “Of the eleven email messages, three were immediately returned as undeliverable due to this or that technical problem. Of the remaining eight, three contacted me within 24 hours. As of today (Thursday afternoon), I have not heard from the other five and am now as disinterested in them as they apparently are in my business.”

    While there is a lot of lip service in the industry about the value of Internet marketing, it is odd that less than 28% of the lenders responded to Ronni. While we all know the number of originators have drastically tailed off, it is odd that the response rate was this low. If this is the typical response rate, what impression are seniors getting about our industry? Could we in part be at fault for the drop in the number of searches?

    If the Internet is the future way of introducing HECMs to baby boomers, with the percentage of borrowers who are computer literature up substantially, why aren’t we seeing more searches? The industry needs to have better direction than anecdotal evidence. We need to see real returns before allocating larger percentages of limited advertising and marketing dollars to the Internet.

    • The financial benefit to the borrower should be the only reason to sell a reverse mortgage. There should be lender liability for negative consequences to the elderly. Then people will feel safe to purchase this complex prodiuct. Right now people don't feel safe.

  • Sandy,

    Wow!! I think you need to reread your statement. The financial benefit to the borrower is not the only reason one sells reverse mortgages. I will not sell one that results in a loss to me or my employer.

    There are negative consequences to lenders. I guess you have been keeping up with the fines HUD has issued or the findings of the NY AG against at least one reverse mortgage lender. There have also been criminal proceedings against some.

    Why is it you feel you had to make this reply to my comment? I really do not catch your drift.

  • Sandy,rnrnWow!! I think you need to reread your statement. The financial benefit to the borrower is not the only reason one sells reverse mortgages. I will not sell one that results in a loss to me or my employer.rnrnThere are negative consequences to lenders. I guess you have been keeping up with the fines HUD has issued or the findings of the NY AG against at least one reverse mortgage lender. There have also been criminal proceedings against some.rnrnWhy is it you feel you had to make this reply to my comment? I really do not catch your drift. rn

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