Reverse Mortgage Marketers See 3 Very Different Types of Seniors

The reverse mortgage industry faces an interesting marketing challenge today, based on the fact that the 62-plus population is largely segmented into two—or even three—distinct groups of “seniors.”

Recognizing the differences is paramount in communicating with potential reverse mortgage borrowers, say some of the chief marketers in the business, who shared insights during the National Reverse Mortgage Lenders Association annual convention in San Antonio last week.

Whether working on the phone or in person, the panel shared views on working with younger borrowers versus older ones and recognizing those differences.


“It’s important to layer messages,” says Mary Smith, director of marketing for Genworth Financial Home Equity Access. “The boomer segment, for example, wants to retain financial control and rebuild investments.” Those borrowers who are aged 62 to 65 may also look to defer Social Security payments, she said, which is part of the message to which they will best respond.

The next group, which Smith identifies as 66- to 75-year-olds are most interested in preserving savings and retiring on their own terms. These may be better clients for the Home Equity Conversion Mortgage Saver product, Smith says.

With so many different choices when it comes to working with a lender or broker, the differentiation has to be made not on price, but on connecting with the customer, says Paul Fiore, vice president of sales for American Advisors Group.

“We really have to place a big emphasis on the difference between the World War II  generation and the baby boomer generation. They are very different clients,” he says.

The World War II generation is not generally not as comfortable with debt, he says.

“They’re not debt managers. I don’t see older seniors carrying credit card debt. They pride themselves on paying off the debt and those who do have debt become overwhelmed by it.”

Those differences can translate directly into different needs. And there may be even more than two different groups.

Alain Valles, president of Direct Finance Corp., says he segments the market into three sets of borrowers: “young” (55-65), “middle” (65-75) and “older” (75 and older).

These three groups are often looking for very different solutions and may approach a conversation with an originator very differently.

The young group generally has a strong opinion and will speak their opinions, Valles says. Those who are older want to be heard and may share their stories of the last 40 to 50 years. The middle group, on the contrary, wants to be educated. It translates into their decision making process.

“The older are forced to make a decision. They didn’t want to end up here. They’re not happy to see me,” he says. “The middle like to delay it. They want more information but hope not to need it yet. For the younger group, [the reverse mortgage] might become more of a financial planning tool. They say, ‘I can’t wait to turn 62 and give Alain a call.'”

Written by Elizabeth Ecker

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  • As of yet no one has provided a single response as to why using reverse mortgage proceeds to defer Social Security benefits is a wise use of those proceeds.  Yet once again we read that it is a good way to entice seniors to discuss reverse mortgages.  This is a tacit approval of an idea which is KNOWN to be nothing more than a gamble as to a full return of the monies risked let alone accrued ongoing costs.  No one has added that our industry should be giving full, adequate, and properly structured warnings about the strategy. 

    Until someone in the industry can show how the average 62 year old will gain significantly by using the reverse mortgage Social Security deferral strategy, it should cease.  This is WORSE than most strategies for using reverse mortgages to purchase deferred annuities and at least as bad as the others.

    It seems we do not learn.  The annuity practice did not cease until Senator McCaskill put her provision against annuities and MUCH more into HERA.  It seems our salespeople beg for negative press and restrictions on the sale of our products.  Are we really this reckless?  

    If this practice continues and negative action is taken in Congress, those promoting this PROMOTING this strategy will not soon be forgotten.

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