Reverse Mortgage Lenders Crack into Mainstream Media to Educate Consumers

Education is key to overcoming any misunderstandings. And in an industry like the reverse mortgage sector, dispelling myths about Home Equity Conversion Mortgages (HECMs) is more important today than ever.

In efforts to set the record straight on reverse mortgages, some lenders have recently tapped into mainstream media outlets to get their messages across to a wider pool of potential borrowers and the general public.

One of the most recent pieces of national news coverage arrived late last month from Fox News, which ran a video segment titled “How to Have a Reverse Mortgage Success Story.”

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The piece, covered by Fox News legal analyst and “The Property Man” Bob Massi, delved into the world of reverse mortgages and the couples who used the loans to achieve certain goals during retirement.

Also featured during the six-minute story was Josh Shein, senior director of Home Point Financial Corporation and a reverse mortgage specialist formerly with Maverick Funding Corp., which was acquired by Home Point in April.

Reaching out to real estate professionals and other experts outside of the reverse mortgage space is critical for the industry to build awareness of the HECM product, Shein tells RMD

“The more people that understand a reverse mortgage and are knowledgeable of the persistent questions and concerns borrowers have of them, the more they understand that a reverse mortgage is a positive thing and a helpful thing,” he says.

Questions like “how does a reverse mortgage work?” and “what happens to the home?” are common concerns among borrowers, but they are also important for non-industry professionals, like real estate agents and financial advisers to know as well.

“It also drills down to the local level, which can turn into something bigger in the sense that any person who is an expert and is doing shows, writing letters, etc., should be educated on reverses and should be working with us to cover the topic,” Shein says.

Changes ‘for the better’

For the Fox News segment, Shein spent “a good deal of time” with the self-proclaimed Property Man talking about the reverse mortgage product, including how the loan works as well as different scenarios borrows can use a reverse mortgage.

“It allowed us to have a good dialogue and really hit on the key, major points that come up with reverse mortgages all the time,” Shein says.

About one week prior to the segment with Shein, Massi provided insight in another Fox News piece about how the new reverse mortgage rules under the Financial Assessment aim to reduce risk for borrowers.

“People need to be aware of these changes, and if you are interested in it [a reverse mortgage], you have to go to people that know how to do this kind of business and get these guidelines and see if you qualify,” Massi said in the video segment.

Another major media news outlet, ABC Action News Tampa, recently touched upon the topic of reverse mortgages in efforts to educate its viewers on these financial products. Discussing the pros and cons of reverse mortgages, the segment interviewed a couple who had taken out a reverse mortgage to improve their retirement situation.

The segment also interviewed Mac Tennant of St. Petersburg, Fla.-based Access Reverse Mortgage, who talked about how rule changes, such as upfront draw limits and the cessation of lump sum payments under the fixed-rate HECM, have changed reverse mortgages “for the better.”

Not explicitly discussed during the two-minute segment was the most recent rule change to befall the HECM program, which some suggest has actually been something like a blessing in disguise for the reverse mortgage’s reputation.

Antidote for a bad rep

The new credit underwriting processes and residual income analysis required for the HECM program under the Financial Assessment may have complicated the jobs of loan originators and processing staff alike, however, these new program requirements may just be the antidote the reverse mortgage needs to cure its tainted public perception as a loan of last resort in the eyes of the general public.

“As we’re getting more acclimated and experienced with the Financial Assessment, we’re learning that it is ultimately doing good for the industry,” Shein says. “It’s a positive. And it’s resulting in people like Massi giving this product more credibility and allowing people to really feel that a reverse mortgage is logical and a more appropriate product for the senior homeowner.”

Shein noted that the borrowers spotlighted in the segment featuring himself and Massi obtained their reverse mortgages from American Advisors Group and The Federal Savings Bank, respectively.

But while those two case studies showed how reverse mortgages can play a significant part in the financial planning of someone’s future, there are plenty more potential borrowers out there who might be missing the opportunities a reverse mortgage can provide for them. And it all comes back to a lack of education about the product.

“There are a lot of borrowers we can help and should be working with—a lot more than we are right now,” Shein says. “Any type of media we’re involved in to ensure that accurate information is being conveyed to homeowners is going to help us as an industry, help our businesses and help grow the product.”

Written by Jason Oliva

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  • Let us not carried away. The positive press is great and much needed but it is just the start of what we need. While we may be hearing positive things, our endorsements lack. So far not even an collaborative effort by the major lenders in the industry resulted in increased endorsements since it started and ended in fiscal 2014, our worst year for endorsements since fiscal 2005.

    We are not growing but rather trying to regain the ground we started losing in fiscal 2010 which resulted in fiscal year 2014 being THE worst fiscal year endorsements in nine fiscal years. The total was not even half the total we had in each of three years (fiscal years 2007, 2008 and 2009) of endorsements which also occurred in that same nine year period.

  • Jason wrote a good article, especially highlighting the importance of education. I know Jason was referring to every individual from originators to processors, underwriters, wholesale account executives and the management of each department.
    Naturally the education to the consumer is the ultimate goal, objective and primary concern for all of us. However, all of us need to be educated thoroughly before we can be expected to educate and provide the service our seniors deserve.
    Admittedly, the news media has taken a kinder approach toward the reverse mortgage product and we can use a heck of a lot more of it.
    However, we can’t lose sight of what The_Cynic has said in the comment Cynic gave. The comment in my opinion is right on tract!

    I feel that we are making strides as well as getting accustom to the FA ruling and other changes such as the NBS ruling. I still fall back on the education part of this article.

    All of us in the reverse mortgage space must take advantage of all that is offered to us in our industry. We have AAG, Urban, Sun West and other major investors that offer all kind of training programs and even issue monthly training calendar schedules.

    Also, Shannon Hicks at Reverse Focus has a fantastic personalized training programs they offer to small to medium size companies, I tool it and even received a certificate at the end of it.
    All and all, I guess I put my two cents worth in my comment but like I said in the beginning, the article from Jason was good, we cant emphasize enough on the importance of educating ourselves and embracing all the changes for what they are as well as embracing them in a positive way.
    John A. Smaldone

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