Show, Don’t Tell: How Reverse Mortgage Sales Need to Change in 2016

In written storytelling, a message is more effectively communicated when the writer shows, rather than tells when explaining details within the narrative. The same holds true in reverse mortgage sales, especially when signifying the roles of loan officers as either sales professionals or educators.

Reverse mortgage loan officers are essentially educators. They meet with prospective borrowers and provide all of the necessary information needed to assist the borrower in making an informed decision for whether a reverse mortgage is right for them. But when it comes down to making a sale, there needs to be a distinction between educating and selling, according to a panel of sales leaders at the National Reverse Mortgage Lenders Association annual gathering in San Francisco last month.

“There is an education to the sale, but along with it comes a close,” said Kevin Blakeney, senior vice president of the national field sales team at American Advisors Group (AAG). “Going into the consumer’s home and giving them as much information as possible, but not showing them how this product is going to relate to that person and help get them over the finish line to take advantage of the product and sell them—that’s where fundamentally I think we’re missing the boat here.”


Every sale has an educational component to it, whether it is buying a home, a new car, cell phone, TV or just about any other consumer good or financial product. Reverse mortgages are no different. As much as loan officers feel the need to educate prospective borrowers on every single detail about reverse mortgages, this conversation needs to shift from simply telling a senior what a reverse mortgage is, to showing them how it might benefit their particular situation.

“We don’t want to go out there and teach how a reverse mortgage works,” said Richard Thorpe, national retail sales channel leader at Reverse Mortgage Funding. “Instead, we want to go to a client and show them what a reverse mortgage does.”

There’s a major difference between simply telling prospective borrowers about a reverse mortgage and showing them what this loan will personally do for them, Thorpe added.

The “kitchen table” approach to reverse mortgage sales is common, where a loan officer meets with a prospective borrower in his home to discuss the ins and outs of a Home Equity Conversion Mortgage (HECM), covering everything there is to know, from the basic definitions of term and tenure payments to going over the various costs and figures.

While this might provide an overview of what a reverse mortgage is, doing a data dump like this neglects to address the underlying problems a borrower might have. Failing to address these issues could be the ultimate reason that customer might refrain from getting the loan.

For example, borrowers might just be sitting there at the kitchen table, a bunch of thoughts running through their mind about everything that’s wrong in their life and not know how to explain it to the loan officer who is just rattling off information and not really addressing any of his problems.

“You need to start digging deeper with them and understanding what their problems are and then you can educate them on what a reverse mortgage will do for them,” Thorpe said. “We all know how it [reverse mortgage] works and can explain that, but the reality is that’s not their problem. Their problem is: what is a reverse mortgage going to do for them, not how does this product work?”

Reverse mortgage sales professionals should not necessarily feel the need to teach prospective borrowers Reverse 101, said Nancy Pedone, vice president of national sales at Responsible Reverse Mortgage, Inc.

“They don’t care about that,” Pedone said. “All they need to know is what it means to them and we need to identify the benefits. That’s where we need to go with that, and then move onto the sales process.”

Rather than inundating prospects with a barrage of information, reverse mortgage sales professionals need to tailor the conversation in such a way that bridges “features” of the product to a description of the “benefits” of what a reverse mortgage can provide a particular borrower, given his or her financial situation.

“Educators work on features,” said Paul Scheper, national retail sales field leader for Liberty Home Equity Solutions. “Sales professionals work on benefits. It’s all about the duct tape on the mouth and two ears; you have to listen. Always be caring and always be questioning, and help them [prospective borrowers] cross the bridge from a feature to a benefit.”

Written by Jason Oliva

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  • Factually, counselors create revenue by the number of prospective reverse mortgage counselees they educate. Reverse mortgage educators are paid for how many reverse mortgages they close. Reverse mortgage educations receive no compensation for how well they educate, the number they educate, or what the content of their education is; educators generally do.

    How is the success of educators and reverse mortgage originators generally measured? Educators by how well their students do on standardized exams and reverse mortgage originators by their sales volume.

    Any product which is new to the prospect requires the salesperson to educate. What reverse mortgage originators should not be doing is providing totally unbiased education. Most do not.

    Put simply, no one in the chain of the reverse mortgage process has the duty to sell other than we, the originators.

  • This is a good article written by Jason and the timing couldn’t be better. Loan originators need to be good educators for our seniors, they also need to be well educated as well, especially with all the changes in our industry today.

    However, I feel very strong about what needs to be done right out of the gate when the loan originator sits at the kitchen table with their prospective senior borrowers.

    First thing that I feel needs to be done is to uncover the need! Find out why your seniors are looking into a reverse mortgage, once the need is uncovered, then go into answering questions and educating your clients.

    Once that need is uncovered, the loan originator has the foundation established, which can lead them into closing the transaction.

    Just remember, we have a fiduciary responsibility to our seniors, let us make sure their needs fit a reverse mortgage profile.

    A reverse mortgage is not for everyone but it is getting harder and harder to try and find a reason why it is not, especially with all the retirement planning opportunities a reverse mortgage offers today!

    John A. Smaldone

    This is the expressed opinion of John A. Smaldone only and does not represent an opinion of Willow Bend Mortgage or its affiliates.

    • John,

      In many ways your comment is on point but placing the highest priority on finding the need is a long held sales tactic. It most certainly is not educational but it is a key part of a sales technique.

      It is hard to understand why it is wrong or inappropriate to “sell” HECMs especially if one believes that it is the best answer to the senior’s situation. We even tailor the amortization schedule based on the needs of the senior.

      As to it getting harder and harder to find a reason that a senior should not get a HECM is somewhat true but the product has not changed that much. In fact many of the financial models which show the effectiveness of getting a HECM were created using Savers showing it was true over five years ago and for some of us old timers at least since November 2008 we have taken that position due to receiving a single national lending limit of $417,000 from HERA.

      • RMAdvisor, I appreciate your reply back to me. You are right to a point, no, finding the need is not educational and in my opinion is not even a sales tactic.

        If a loan officer does not first establish the need and why their potential senior borrower wants a reverse mortgage in the first place, it is like starting the interview process in the middle!

        Naturally education is a priority and it always will be but education comes before you meet with a prospective client.

        We that have experience in our industry assume to much.

        RMAdvisor,You say that finding the need is a long held sales tactic. Again, I do not look at it as a sales tactic at all as I explained above. The point I am making is that many new people in our industry do not know the importance of finding out what the seniors inner need really are!

        There again, I feel very strongly about finding the need and why the senior client wants a reverse mortgage right out of the gate!

        Some seniors may only be fact finding, that is fine but at least you know what your clients mission is before you start advising them. Once again, it comes back too education, you can’t advise unless one is educated!

        Thank you,

        John A. Smaldone

        This is the expressed opinion of John A. Smaldone only and does not represent an opinion of Willow Bend Mortgage or its affiliates.

      • John,

        If you are pharmaceutical salesperson, you generally do not go to a mechanic to leave a sample of Crestor. However, that same pharmaceutical salesperson does not go to all physicians’ offices trying to get orders for the same drugs. They try to learn the drugs that a doctor is interested in and then work with that knowledge.

        That same principle applies to medical supply sales specialists as it does to farm equipment salespeople and the farmers in their sales region.

        Without understanding need, all salespeople are ineffective. Efficiency requires knowing customer’s needs. Those who understand this don’t waste their customers time by making a cold
        call trying to sell an air compressor to an attorney when what they need is a better forms service.

      • John,

        No, I perceive what you are saying but in my experience it is a common sales technique.

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