Call Center or Branch Model? Some Reverse Lenders Say Both

As the lender landscape for reverse mortgages has changed over the last 18 months, so, too, has the model for origination types in the market.

Some lenders that have long utilized a phone-origination approach are adding originators in the field, and some others with experience largely based in branch offices are managing and growing call center operations for the first time. Where the balance lies depends largely on the lender, but those who have tested both models say the successful lenders will be able to offer all options to reverse mortgage borrowers in the future.

Maverick Funding, which has for several months hovered near the top-10 lender by volume list, currently has a slightly larger team of inside loan officers, but has recently added originators who will focus on being in the field.

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“We are definitely looking to grow and expand on both tracks,” says Josh Shein, vice president/branch manager for Maverick Funding.

Even lenders that have a strong history of working with dozens of call center originators are beginning to “test the waters” on an approach that utilizes both sales models.

One Reverse Mortgage, for example, operates phone sales teams in offices both in Detroit where its parent Quicken Loans is based as well as in San Diego. The company is looking into the option of adding originators to the field for the first time. “We are a bit early into the process of investigating this model, but we feel it may be a nice complement to our web center” says One Reverse President Gregg Smith.

Different Approaches Net Different Results

In spite of the obvious differences that come with a face-to-face meeting versus a phone call origination process, the loans produced by each model can have some stark differences.

Associated Mortgage Bankers recently ramped up its call center operations and has quickly grown its reverse mortgage division to closing more than 300 so far this year.

While loans originated through its phone sales team tend to be greater in number, the company finds, the loan amounts, on average, are noticeably higher for the field-generated sales team.

“The outside sales force has been consistently contributing 25% of [our loan] units, but the loan sizes are larger,” says Kevin Blakeney, senior vice president of the company’s Reverse Mortgage Division.

AMB’s team spans a slightly larger group of field originators, whose leads are self-sourced and often come from relationships with financial planners and builders. Those originators average between one and two loans per month, Blakeney says, with the call center employees averaging around five loans per month in comparison.

But managing two different operations types comes with challenges, especially when it comes to providing leads. Boots on the ground originators tend to be self-sourced, depending largely on referral relationships with financial planners, or attorneys or other advisors who work with those approaching or in retirement.

“As the size of the teams grow in the field and/or at office locations, the management and support is essential,” Shein says. “Separate sales managers will be required for each team as they grow and have different requests and needs on a day-to-day basis.”

The tools provided to the sales team, can also make a major difference when exploring the different channels. “We found it was more efficient to work over the phone, but we have a very high degree of control over how the product is presented,” says John Mitchell, founder and CEO of Reverse Mortgage USA, which also counts itself among the top-10 lenders by volume and utilizes both branches as well as call center origination teams.

Reverse Mortgage USA, which counts about two thirds of its origination team in its inside sales force, uses a very structured script, Mitchell says, which makes the call center approach more even more effective.

“Some may have call centers, but without a structured script,” he says. “If a loan officer physically meets with the borrower, it tends to be more effective. But we make it work on the phone because we’re so structured.”

Whether lenders are “testing the waters” as in the case of One Reverse Mortgage or have an established model that relies on both types of origination channels, many lenders agree there are merits to both and that the most successful companies will utilize all possible sales outlets.

“I think we are all recognizing that you can’t reach out and contact the significant number of potential borrowers without a multi-pronged approach,” Shein says. “Often people who will call in to a TV ad, or go online will not be the same people who will work closely with their financial and other professional advisors, so in order to reach out to more seniors both approaches to sales must be pursued.”

This edition of the RMD Report is sponsored by national appraisal management company Landmark Network.  

Written by Elizabeth Ecker

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  • With endorsement growth now appearing to be stymied at about 2% (a genuine improvement), all of this talk about growth in excess of that amount seems more like bragging about how they are consuming a greater share of the market.

    Those who did not realize that the same company can have both a successful call center as well as a successful boots on the ground operation simply have not been paying attention to their competitors. In these hard times, those who are not flexible and multiple in their marketing approach will see their market share shrink.

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