The reverse mortgage industry has a long way to go in its efforts to grow consumer awareness of the Home Equity Conversion Mortgage (HECM) product. But there are several key areas of improvement where the industry can start to widen the net for greater consumer education.
Whether it’s the need for more diversified marketing messaging, increased public relations outreach or more emphasis placed on educating consumers on key product features, reverse mortgage professionals agree that the industry can only benefit from heightened public awareness of the reverse mortgage as a viable retirement asset.
But challenges remain, specifically in regards to scale of the oft-considered niche of reverse mortgages, which represents only a sliver of the broader mortgage market.
“To improve penetration, the industry needs multiple players with some capital behind them to be able to go out and market the product with some substantial budget and begin marketing a variety of messages,” says Teague McGrath, chief creative officer at American Advisors Group (AAG).
The largest reverse mortgage lender by volume—with 9,271 loan year-to-date in 2015 through August, according to the latest industry data tracked by Reverse Market Insight—AAG’s national reverse mortgage marketing campaign featuring TV spokesman Fred Thompson has ostensibly made the former U.S. Senator the face of reverse mortgages in the eyes of the public.
But while other top industry lenders like One Reverse Mortgage—with Henry “The Fonz” Winkler as spokesman—and Live Well Financial have also rolled out national TV ads, the industry needs more lenders marketing the product—and in different ways, too.
“Once we start diversifying the message, the penetration will improve,” McGrath says.
The most recent changes to the HECM program may also be considered a boon to helping the reverse mortgage industry dispel past misconceptions and further awareness that these products can be valuable retirement assets to help fund longevity.
“With the new Financial Assessment guidelines in place, and many financial experts already lauding the merit of the changes, it is a good time to spread the word to larger, one-to-many distribution channels,” says Mike Gruley, director of reverse mortgage operation at First Financial Reverse Mortgages in Plymouth, Mich.
Large organizations and businesses with wide communication networks can more efficiently distribute this good news to their members, customers, clients, employees, further enabling the chances for the message to become viral, Gruley says.
In the reverse mortgage industry, where the saying “there’s no such thing as negative publicity” has never been more wrong, initiatives geared toward public relations can help put to rights some common inaccuracies of the HECM product.
“I think our best chance is to continue and even increase the PR effort,” says Bruce McPherson, certified reverse mortgage professional (CRMP) with Retirement Funding Solutions in San Diego. “I still see inaccuracies in every article I read. And none of them clearly educate consumers about the stand-by LOC and why it’s so important to secure one NOW before the 10-year LIBOR increases.”
Know some other areas where the reverse mortgage industry can improve awareness of the HECM product? Feel free to email your responses to joliva(at)reversemortgagedaily(dot)com.
Written by Jason Oliva