While the measurable results of social media marketing efforts are largely to-be-determined for reverse mortgage lenders, several lenders are beginning to enter Twitter, Facebook and other social media channels. While they say it is too soon to measure success, not being present online is a risk they say they are not willing to take—even knowing there are some compliance aspects to consider.
There are an estimated 15.5 million Facebook users in the United States over the age of 55 according to data from iStrategy Labs, which tracks Internet use among different age demographics. The online space is only becoming more populated with potential reverse mortgage borrowers, as the 55+ age group saw a 60% increase from 2010 to 2011. Reverse mortgage lenders have not exactly been spearheading social media marketing efforts, but some say they are willing to give it a shot, despite the unknowns.
“I don’t exactly know what it’s going to do,” says Jim Cory, CEO of Legacy Reverse who operates a Twitter account under the name @LegacyJim. “It’s very hard to measure with any social media. Kind of like branding, it’s essential in a lot of ways but it’s very intangible.”
Over the course of a year, Cory has garnered more than 1,200 followers on Twitter through daily tweets on industry-specific news. But whether those followers have led to any sales is still unclear, he says.
“I do know we have generated some Internet traffic from Twitter and Facebook, but I don’t believe it has converted,” he says.
Reaching the actual borrowers in order to make a sale may be another story, but using social media channels to build a network and connect with other professionals can be at least one component of developing a social media strategy.
“I think that leveraging social media outlets to inform and educate financial planners, attorneys, lead generators, etc., to create referral business will have a cascade effect that can help our industry expand,” says Joe Hansler, a reverse mortgage sales executive for a bank lender.
Greenlight Reverse, based in Irvine, Calif., has begun to launch more consumer-facing social media efforts with an eye toward content to capture the senior audience.
“Content is key when marketing to seniors,” says Paul Scheper, division manager for Greenlight Reverse. “Blog posts, tweets and Facebook updates needn’t be perfectly composed, crafty, clever or even that creative. They only thing they need to be is relevant to the types of people you’d like to turn into customers. We typically discuss exercise, nutrition, longevity and other ‘Dr. Oz’ tips. But, seniors also seem to be clicking other areas of interest like psychology, music, humor, motivational quotes, self improvement, travel and arts.”
When discussing actual product information, however, it is important to exercise caution because of the rules in place to protect consumers, such as the Truth In Lending Act (TILA).
“I would be cautious of marketing anything related to pricing or fees, as these are sensitive areas in our space, and with today’s execution levels it could have some negative impacts,” Hansler says.
The rules are essentially the same as for other forms of advertising, but it’s largely uncharted territory, says Larry Platt, K&L Gates financial services attorney.
“You can assume it’s the same and assume in the future regulators will come up with an overlay for social media,” Platt says. “It’s already happening on mutual fund side. They’re coming up with special rules on social media, but they’re really just saying the same thing.”
The biggest trouble areas are where loan officers are not adhering to advertising rules in their social media channels, and the parent company is responsible for their marketing message, Platt says.
“The real problem is renegade salespeople,” Platt says. “Companies themselves can come up with online websites and contact responses that are fully vetted with their legal dept and comply with the laws. It’s when loan officers go off on their own and use things like Facebook, Twitter and other types of social media to advertise products that they may not comply with the rules. For example, TILA requires that any disclosure of rate info be disclosed in form of APR. Quite often when sales people go off on their own they speak in common language. It’s what the conusmer understands, but not what’s compliant.”
Keeping track of the messaging that loan officers are employing is an important consideration for the lenders, Platt says.
“You find legal department go to great lengths to create scripts… that kind of vetting can be lost when salespeople use social media. The employer is responsible.”
The lenders currently using social media, however, say by keeping the messaging simple, they are staying compliant and are also staying ahead of the curve.
“If it becomes the next medium for generating business, we don’t want to be the guy that’s just starting,” Cory says.
While that part is still just a possibility for reverse mortgage lenders, one thing is still certain: these social networks are not going away.
“The Internet is everywhere” Scheper says. “Increasingly, seniors are accessing the Internet wherever they go and whenever they want. If you plan to stay in business for another five or 10 years, you’ll likely end up using the Internet in some way to promote and market your services. Starting now just means you’ll be better positioned to take advantage of future opportunities as the Internet becomes more and more integrated with the reverse mortgage borrowing segment.”
Written by Elizabeth Ecker