5 Ways Reverse Mortgage Pros Can Grow Their H4P Business

As more Baby Boomers retire and become eligible for reverse mortgages, their desires to relocate later in life present a huge market opportunity for the Home Equity Conversion Mortgage for Purchase (H4P) product. Although production has yet to takeoff, there are several ways reverse mortgage originators can position themselves to grow their H4P business.

Currently, H4P commands a miniscule share of reverse mortgage volume. In the past 12 months ending February 2016, H4P production accounted for roughly 4.4% of total HECM endorsement volume, according to data RMD obtained from Reverse Market Insight. That’s less than 5% of 55,213 loans recorded during that time period.

Several overarching factors could be the reason why H4P, in its seven-year existence has not yet caught wind for its sails. Certificate of Occupancy timelines, along with a lack of education for builders and real estate professionals are often cited as the biggest hurdles to growing the H4P market.


These challenges, however, are no excuse for originators not being able to seize the market opportunity lying in wait.

More than 5.1 million homes were sold by licensed real estate agents in 2014—approximately 14% of which were sold to buyers age 62 and older, according to figures from the National Association of Realtors.

This home buying activity, coupled with broader U.S. aging demographic trends, is brewing a perfect storm for the H4P market over the coming years, says Chris Bruser, a Tampa Bay, Fla.-based Certified Reverse Mortgage Professional with Retirement Funding Solutions.

Roughly 80% of Bruser’s business revolves around H4P. Last year, he closed about 60 HECMs, at least 45 of which were H4Ps. On average, Bruser estimates he closes about four H4P loans per month.

Chris recently shared with RMD several practical tips for reverse mortgage originators who want to expand their H4P business.

1. Build referral relationships

Whether focused on HECMs or H4Ps, regardless of product type, cultivating relationships with non-industry professionals is a tried-and-true approach to generating additional business. It also provides an opportunity to educate professionals and their clients about reverse mortgages and how these loan products can best serve their individual needs and circumstances.

Bruser attributes most of his H4P business to his relationships with several regional builders specializing in the 55+ active adult market, as well as real estate agents and financial advisers. His first relationship developed after simply networking with conventional mortgage professionals.

Growing a referral business is a combination of things, Bruser says, including actively marketing in your local area, hosting educational events and promoting your business in other ways. But mostly it begins by word of mouth.

“One of my relationships was introduced through a conventional mortgage professional who didn’t specialize in reverse mortgages,” Bruser said. “When he heard about a builder who was looking to learn more about the [H4P] product, he decided to choose me.”

Attending conferences and events geared toward mortgage professionals, financial advisers, builders and Realtors can help reverse mortgage originators spread the word about H4P and HECMs more broadly.

Forging these types of relationships can be critical to growing your personal pipeline, however, you can’t make these connections if you don’t leave the office.

2. Leave your desk!

It’s easy to get bogged down sitting at a desk all day checking emails, following-up with prospects and waiting for the phone to ring. Yes, these are important tasks that can help drive your business, but actually getting out in the community is what’s going to grow your business in the long run.

“Some people get stuck at their desk sending emails,” Bruser says. “You have to do that, but nothing beats getting out there and networking.”

Bruser suggests spending a whole day going around town with a stack of marketing materials, leaving flyers with nearby banks, real estate offices, financial planners, and with others who work directly with older adults. Then you can follow-up with the people you met that day either later that night or the next morning.

3. Promote, promote, promote

Active marketing is a key component to growing any business. For a HECM product that continues to grapple with a variety of misconceptions and its loan-of-last-resort reputation, it becomes even more important for reverse mortgage pros to enlighten the public of what HECMs can really do, not what they have done in the past.

Aside from posting a bunch of flyers around town, actively marketing the H4P also means being heard in the community and tapping into the media that’s most likely to be seen, read and digested by your target demographic.

Local radio shows, TV stations and print papers/magazines are several media platforms on which to deliver reverse mortgage messaging. The same goes for internet channels and social media platforms such as Facebook, LinkedIn and Twitter, to just name a few options.

“We [reverse originators] know more about this product than anybody out there,” Bruser says. “We need to get in front of people who have an interest in listening. It’s a numbers game, just like any other form of marketing.”

4. Host seminars

Hosting seminars, whether for the professional or consumer crowd, is a great way for originators to make themselves known as THE reverse mortgage experts in their markets. These events can also pave the way for additional referrals coming down the pipe in the future.

Leading seminars for consumers, Realtors, builders and other professionals continues to drive a significant portion of Bruser’s H4P business. Just last week, Bruser led an H4P seminar at an Orlando RE/MAX office. The broker who invited Bruser to speak at the session found him through a mutual financial planner contact in the area.

“He [broker] liked the H4P program so he said, ‘Let’s do a seminar at my office,’” Bruser said.

The seminar conversation lasted about 1.5 hours and attendees included a mixed group of real estate agents, CPAs, an individual from a title office, among other professionals.

Rather than PowerPoint people to death, Bruser brought a whiteboard and informational sheets to help attendees understand the concept of H4P first, before walking them through more technical features such as amortization schedules and loan comparisons.

“It helped clarify some of the mystery behind the product,” he said.

Bruser hosts 3-4 seminars each month. In some cases, builders with whom Bruser works will compile a list of people who visit their website and are interested in learning more about the HECM program.

Seminars provide prospective clients, as well as professionals, the ability to understand the HECM and H4P products first-hand to assist in their home buying process.

“It’s allowing them to understand the program in person,” Bruser said. “That way, they can make a more educated buying decision.”

By simply just having knowledge of the HECM program, whether consumers or professionals use that knowledge or not, Bruser says they at least know about this option as a choice for either themselves or for their clients.

5. Be patient

Anyone who has worked in the reverse mortgage industry knows there is no place for immediate gratification. Getting a reverse mortgage is a major life step for many people. As such, talking with prospective borrowers requires a great deal of patience and nurturing.

Bruser, who has been focused exclusively on reverse mortgages since 2006, became interested in the H4P product once it was first introduced in 2009. It wasn’t until four years later in 2013 that his H4P business really started “ramping up.”

The reality is not every Realtor, builder or financial adviser is going to return your calls, or even express an interest in recommending reverse mortgages to their clients at first.

Instead of feeling discouraged, think of growing your H4P business like a farming operation. Those initial conversations may not have yielded any new referral business yet, but like seeds, they need time to grow and develop.

“Think of yourself as a farmer—the seeds you planted 4-5 years ago are now bearing fruit,” Bruser says. “You need to have a long-term perspective. Be persistent, but don’t get disgruntled. Chance favors those who persist.”

Written by Jason Oliva

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  • As to overall good marketing and sales practices, Chris is right. Getting out there is the first step to changing things. Farming is a very old style of marketing used successfully but differently in the real estate industry for decades.

    Chris is fortunate to have his base of business in one of “the 52 biggest metropolitan areas, Tampa-St. Petersburg” which also “has the highest share of seniors in its population at 18.2%” as of 10/30/2014.

    To expect Chris’s success outside of his business home of Tampa Bay is not realistic. Selling H4P is difficult unless your senior population is growing or already is a high percentage of the population. We find both of these conditions in abundance in Tampa Bay.

    How difficult things are, not only are fiscal year-to-date endorsements dropping but so are fiscal year-to-date H4P totals –just not as bad.

  • Chris Bruser brought up all good points and is doing what needs to be done, just as The_Cynic had indicated.

    However, Florida is not the only place the H4P program can be successful. I have to disagree with my friend The_Cynic in this case. I feel wherever homes are being sold and where ever you have realtors as well as builders, the H4P program is a viable product to offer!

    Getting out there to market the product is a must, call on the broker first and foremost, meet with he or she, show them the benefits of the H4P program and how they can increase their sales by having it available.

    Ask your self this, if you were that broker and I came in and sat at your desk and I told you I had a program for seniors 62 years of age and older. Then I told you that with my program you can advertise a home for sale and part of your ad could say:

    “If you are a senior 62 years of age or older you could may be able to buy this home under a special program available! If you, the senor have a sizable down payment to put down, of approximately 45% or less, you may be able to finance the rest and have no monthly mortgage payments for the rest of your lives”!

    Would that perk the ears up of that broker, you better believe it would!

    The same can work for builders with their models, specks and homes close to completion. The H4P product has been underestimated and under sold by us in the reverse mortgage space. I feel many have had a mental block against it and there is no reason we should!

    Yes, we have certain obstacles to over come, the “Occupancy Certificate”, no big deal! The largest obstacle is the construction period while the home is being built. Until HUD can figure out a way of doing a construction/perm loan, we have to forget about a newly started home, with the exception of planting a seed with that builder!

    We have to many other fish in the sea to fry, just as I pointed out in this comment. Take advantage of the H4P, do what Chris Bruser is doing with it, regardless of what geographical area you live in. So what if Chris has a bigger market than you do, believe me, your market is big enough for you, you can bet on that one!

    John A. Smaldone

    • >>Would that perk the ears up of that broker, you better believe it would!

      Yep, saying that always perks up their ears. But those ears get dropy, when they hear the whole story. Maybe the ad should mention the Buyer must pay all costs, including the customary home warranty agreement Sellers normally purchase, and most other fees, typically paid for by the Seller.

      • Raymond,
        That theory is self perpetuated by the reverse mortgage world that knows little to nothing about dealing with Realtors.
        Do you really think a commission only, type A personality person, like a real estate agent, is going to hesitate suggesting a product that sells a home with no monthly P&I payments because the seller can’t buy the buyer a warranty? Or any other “customary” closing costs usually paid by the seller.
        Not to mention there is a very legal and ethical answer to that problem that makes all parties very happy.

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