Reverse Rate Offers New Lead Program, Attracts Borrowers After Counseling

NewImageReverse Rate, a lead provider for the reverse mortgage industry announced a new type of campaign earlier this week.

The company is now offering leads where seniors have already been through HECM counseling, a requirement of the Department of Housing and Urban Development.

“We’re looking to do something in the industry that hasn’t done yet,” said RJ Johnson, president of Reverse Rate. “I’ve been an originator since 2001 and we’re trying to go beyond what traditional lead companies are doing.”

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By utilizing a national television campaign without a celebrity spokesperson, the company started a test run of the program during the 4th quarter of 2010.  After having initial success, Reverse Rate is rolling it out to new reverse mortgage lenders.

While the company isn’t doing large amount of volume yet, if there is enough interest, there is plenty of room for growth said Johnson.

 

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  • I was wondering how they obtain names of prospective borrowers who have been through counseling? I tried calling the number on their ads a few times to inquire, but only got a voice mail message stating that no one was available at the time. Perhaps this item in RMD and my comment could help get an answer to that key question?

  • As indicated in the above article, we use national TV ads to attract our perspective leads. We then educate on the process of getting a reverse mortgage, and one of those steps are to complete HUD counseling. After completing counseling, we deliver the leads to our lead buyers to help them with furthering their education, application, and funding of their reverse mortgage.

    • Thanks for the reply, RJ. So, if I understand correctly, you educate a consumer and suggest they go for counseling, then they follow up with you to let you know they’ve completed counseling (and presumably have a counseling certificate) and then the leads are delivered. is that correct? Do the consumers know that this is the procedure?
      Thanks for responding to my earlier question so quickly.

    • RJ,

      One of the issues we have in California is how and when a borrower receives the Important Notice statement found in California Civil Code 1923.5 (a) shown in part below. As stated in the opening clause of that provision it is clear that a lender cannot take an application unless that lender gives the Important Notice to the borrower before the borrower receives counseling. How are you handling that issue as to borrowers whose security for the HECM lies in California?

      “1923.5. (a) No reverse mortgage loan application shall be taken by a lender unless the loan applicant, prior to receiving counseling, has received from the lender the following plain language statement in conspicuous 16-point type or larger, advising the prospective borrower about counseling prior to obtaining the reverse mortgage loan:

      IMPORTANT NOTICE
      TO REVERSE MORTGAGE LOAN APPLICANT
      A REVERSE MORTGAGE IS A COMPLEX FINANCIAL TRANSACTION. IF YOU DECIDE TO OBTAIN A REVERSE MORTGAGE LOAN, YOU WILL SIGN BINDING LEGAL
      DOCUMENTS THAT WILL HAVE IMPORTANT LEGAL AND FINANCIAL IMPLICATIONS FOR YOU AND YOUR ESTATE….”

      While many counselors like borrowers coming to them first and HUD seems to believe it is better done that way, the California law makes that all but impossible.

  • Wow, that was a mouthful…
    Here is simple answer. Since we work with a limited number of partners we tailor our program to meet the needs of our partners. Ever Lender has their own unique process, sales cycle, and work flow. Hope that helps!

    • RJ,

      Thank you for your frank answer. Federal laws, 50 state laws, and territorial laws can put a real wrench into what looks like a great idea or marketing machine.

      Do you consider yourselves the agent of your customers? Are interest rates or other terms related to the loan discussed with prospects?

      While you probably have the best intentions, legal issues are significant and simply deferring to the orders of your customers is probably an insufficient defense. But then I am no attorney….

      Good luck with your venture.

  • Massachusetts will treat this as acting as a loan officer and you will need to be licensed. If you are acting in any part of negotiating loan terms (ie, educating) you need to be licensed to offer such loans.

    • Bill,

      Inside the rules? If individuals who are not licensed or at least registered MLOs are explaining the program and providing basic finanical information, how is that inside the rules?

  • Mr. Johnson,

    I was forwarded your company’s information by a collegue and have a couple of quick questions for you. If I’m understanding your process correctly, once a consumer contacts your company, they are told that they need to complete the HUD counseling, correct? And, once you get verification of the certificate of completion from a HUD-approved agency, you are then able to forward the leads to a lender? Please correct me if Im wrong on those two points. Finally, I am interested to find out if you refer these consumers to the HUD website for a counseling agency, or do you maintain lists of these agencies to use as referrals to an agency in their state?

    Thanks very much for your anticipated response.

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