As a plethora of new proprietary products have launched this year to fill holes left by changes to the Home Equity Conversion Mortgage program, lenders are refining their target audiences — and the best ways to reach them.
On the surface, HECM marketing and proprietary marketing look similar. Both are targeting seniors who want to access home equity as a solution in retirement. But as fewer borrowers qualify for a HECM because of lower principal limit factors, proprietary innovators have had the ability to expand their customer net this past year.
With the introduction of the Equity Edge products — which are geared toward borrowers as young as 60 and have homes valued at $700,000 or more — Reverse Mortgage Funding’s chief marketing officer Jean Noble said their customer base is “so different” from what it used to be. Along with higher-value homes, the Bloomfield, N.J.-based RMF looks for borrowers interested in a line of credit or debt consolidation, as well as non-Federal Housing Administration-approved condo owners.
“And for people who are closing-cost-sensitive, Equity Edge is a nice solution for them,” Noble told RMD. “Or some people come in with a significant amount of mortgage and credit card debt that can’t be paid off with a HECM. Equity Edge can extinguish both.”
Equity Edge borrowers pay title and appraisal costs, but no upfront origination fee or mortgage insurance premium.
For the Mahwah, N.J.-based Longbridge Financial, the new Platinum product’s target audience consists of homeowners with properties valued at at least $350,000, according to executive vice president for sales and marketing Melissa Macerato. The Platinum launched in August and is a single-draw, fixed-rate reverse, with proceeds up to $4 million.
“That’s the number one thing — home value,” Macerato told RMD. “Whether it’s through paid search or direct mail, we’re looking for higher home value leads. Also, we’re looking at non-FHA condos — really any over $400,000 — and borrowers who want more money upfront.”
Noble said some of RMF’s best marketing leads come from its very own database, with the company identifying people who may not have qualified for HECMs or other loans — but could qualify for one of the new products.
“For example, we may have leads in our system who saw a TV commercial or ad, but were too young,” she said. “So just by combing through the database for those under 62 and doing a multi-level marketing campaign, we get them up to speed on the new products.”
While higher home values continue to be the company’s main focus, Finance of America Reverse president Kristen Sieffert said FAR is going to implement a “fresh take” on their education-focused marketing within their web and social properties. The Tulsa, Okla.-based FAR currently offers the HomeSafe, HomeSafe Flex, and HomeSafe Second reverse options.
“We’ve invested significantly in our digital approach and we will soon be updating our messaging to make clear that we are more than just a lender — we’re a retirement solutions provider,” Sieffert told RMD. She added that educating financial planners does and will continue to play a significant role in their marketing strategy.
When it comes to reaching their audience, Noble said RMF deploys a mix of media.
“Some of our customers like consuming information online, through direct mail, by phone, or e-mail,” she said.
To qualify leads, Longbridge uses lead purchases, paid search, as well as marketing within their own pipeline — and then focuses on e-mail and direct mail to reach the potential customers, Macerato said.
Written by Maggie Callahan
Editor’s note: An earlier version of the article misstated the minimum home value for Longbridge’s Platinum loan. RMD regrets the error.