Generally, someone who is looking for a conventional mortgage is not necessarily interested in a reverse mortgage, but getting the information into the “forward” space is especially important to further educate the public as well as traditional loan officers about reverse mortgages, according to industry marketing experts.
The number one hurdle is still education, Tim Harder, vice president of business development at 1st Reverse Mortgage, said at the 2016 National Reverse Mortgage Lenders Association (NRMLA) 2016 Annual Meeting & Expo.
“The discussion today is about education for the forward mortgage loan officer,” Harder said. “A lot of them feel that this is the loan for, as they say, old people, or the loan of last resort.”
A majority of forward loan officers believe that reverse mortgages are not an option as part of a holistic financial plan, said Harlan Accola, CRMP, national reverse mortgage director at Fairway Independent Mortgage Corporation.
“Some of them [forward loan officers] are out there telling clients not to get them,” Accola added. “That’s what I found out when I came to Fairway, that loan officers just didn’t know what they didn’t know and they would specifically advise against it.”
A vital marketing tool
In addition to educating those within the mortgage industry about reverse mortgages, another way lenders are breaking down barriers is by instead of looking at how to sell a reverse mortgage to someone who is interested in a forward mortgage, they are looking at the product more as a marketing tool, Harder explained.
“It’s not so much about the [reverse mortgage] loan right now, it’s more about using the reverse mortgage as a marketing tool to allow them to get in front of more real estate agents, more builders and more financial planners to promote all of the products they have,” he added.
Exposure is also a huge component to marketing the reverse mortgage product to the forward space, explained Ken Krajewski, managing director and head of reverse mortgage lending at The PrivateBank and Trust Company.
If a company is part of a bank that does do forward mortgages, getting to know the bank tellers can work to get the education out there about the product.
“Every bank should be some place we [reverse mortgage professionals] are approaching,” Krajewski said. “We talk to bank tellers a lot about those customers who are overdrawing their accounts—that’s a great opportunity to talk about reverse mortgages. When you see people coming in and cashing in their CDs, that’s another great opportunity to talk about the product.”
Talking to the bank tellers about when Social Security checks are sent out and stopping into a location on that day when people are cashing those checks is another great time to educate people about the reverse mortgage product, Krajewski adds.
Looking toward 2017
As we move into the new year, 1st Reverse Mortgage is taking the approach of sharing the reverse mortgage product as a “new offering” to the forward mortgage industry, where there are limited new products coming out.
“Unlike 2007 and 2008 when there was a plethora of new products out there, there really isn’t a ton of new products in the mortgage industry right now,” Harder said. “If refi volume drops down, the forward mortgage side of the business is going to wake up and a reverse mortgage could be seen as a new product for someone who has been avoiding us or shying away from the reverse product in the past.”
Just getting a business card out there from the reverse mortgage industry will stand out among all of the realtors and forward mortgage business cards, Krajewski explained.
“Nobody else has a reverse mortgage card,” he said. “You can talk to 100 realtors; they don’t know one reverse mortgage person. Try to be that one reverse mortgage person.”
The product does sound a little too good to be true, Krajewski adds. But while it is too good to be true, people should be getting out there and educating the public as well as all the other professionals who are valuable contacts for the reverse mortgage industry.
Written by Alana Stramowski