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.
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.