Originators and other players in the reverse mortgage industry say that they’ve seen a notable shift in the way Home Equity Conversion Mortgages are covered in the general media, and public-relations monitoring data backs up those observations.
The National Reverse Mortgage Lenders Association uses a third-party public relations firm to track mentions of HECMs in the news; during the period from August 2016 to the present, 36.9% of all reporting on reverse mortgages was positive, with neutral mentions accounting for a further 56.1% — and negative stories representing just 6.4% of the total.
These hard numbers reflect a trend that many in the industry have observed in recent years, particularly as respected news outlets such as the Wall Street Journal and Forbes have reported on independent scholarship from researchers such as Wade Pfau, Harold Evensky, Gerald Wagner, and Robert Merton.
Brett Kirkpatrick, a partner at Harbor Mortgage Solutions, Inc. in Braintree, Mass., said his clients frequently bring in clippings of positive reverse mortgage articles from outlets such as Forbes and the New York Times. This of course was not always the case: Kirkpatrick said general opinion suffered from an “echo chamber” of rumors and negative reports feeding off of each other for years,
The tide began to change within the last four years, with Kirkpatrick pointing to an August 2013 column by popular financial-advice columnist Jane Bryant Quinn as a key turning point. Previously a HECM skeptic, Quinn began recommending reverse-mortgage lines of credit for certain borrowers in their early 60s as a retirement strategy. Kirkpatrick also applauded the National Reverse Mortgage Lenders Association’s efforts to meet with members of the popular media and educate them about the finer points of HECM.
“Those articles are definitely reaching our clients and our potential clients,” Kirkpatrick said.
But despite the positive numbers, there’s still opposition in certain markets. Danny Phillips of Southchase Mortgage in Foley, Ala. says he frequently faces resistance from prospective clients who tell him that “they” say reverse mortgages are scams. He always has the same response: “Well, what’s bad about them?”
“They can never tell me,” Phillips said.
Phillips went so far as to reach out to the local NBC affiliate after one of its news programs ran a sensationalist story about a woman who faced a reverse-mortgage foreclosure. Phillips pointed out that the report was light on specific details, and used the terms “foreclosure” and “reverse mortgages” as a type of attention-getting scare tactic.
“There shouldn’t be any foreclosures,” Phillips said. “(But) people with forward mortgages get foreclosed on. That doesn’t stop anyone from doing a forward mortgage and buying a house.”
Phillips said that Southchase first concentrated solely on regular “forward mortgages,” but that he became interested in HECMs after his parents got older and needed help with money for their retirement. Even though Phillips’ mother ended up having to go through a foreclosure after she moved into a nursing facility and the property was slow to sell, Phillips said he still sees the benefit of reverse mortgages, and began offering them to his own clients.
He said any changes in the popular opinion of HECMs that he’s seen in his neck of the woods were due to his work making connections with local banks.
“It’s through my efforts,” he said. “I would love some help.”
Written by Alex Spanko