With a series of disruptive changes affecting the reverse mortgage marketplace over the past two years, companies that offer reverse mortgage products have had to adapt their strategies to adjust to changes that can adversely affect who can qualify for a reverse mortgage in the first place.
These and other realities unique to the modern age of reverse mortgages were discussed in a webinar on the topic of marketing in the industry’s ‘new normal,’ hosted last week by RMD.
While the overall profile of a Home Equity Conversion Mortgage (HECM) borrower hasn’t changed much over the past few years, one thing that has changed in a positive direction is the fact that home values for typical borrowers are higher. This is according to Mary Smith, SVP of sales and marketing at Liberty Home Equity Solutions.
Same borrower profiles, higher home values
“Our typical borrower has home values well over $300,000 on a national basis, and that’s pretty good news,” Smith said. “In addition to that, we’ve seen home values increase by close to 20 percent in the last two years, and over 30 percent in the last five years. This is very encouraging from both a borrower and industry standpoint, because they have more equity.”
While borrowers are generally more adaptive to technology today compared with years past, this hasn’t done a whole lot to change the profile of a typical borrower, Smith added.
“Certainly today’s borrowers are more tech-savvy than what we saw 10 years ago,” Smith said. “But, I think from what we’re seeing, they still have those same basic needs that they did historically. They need money to help them live a better retirement, and they’re looking for security and peace of mind as they age, and that hasn’t really changed.”
Finding new customers in the places that they spend a lot of their time is crucial in any industry, and in terms of reverse mortgage borrowers, more of them are spending more time on connected smart devices and on social media. Appealing to seniors there is becoming increasingly important, according to Cliff Auerswald, president of All Reverse Mortgage, Inc.
“I don’t go out after one specific profile, because I’ve created an informational base online,” he said. “We attract anyone looking for info on reverse mortgages, and the type of traffic we receive really hasn’t changed. I can tell you there are more users on mobile devices than ever before, but that’s a given.”
Addressing a wider product landscape
Also increasingly important for some companies is how to introduce borrowers to the wider array of options available to them among HECM and proprietary reverse mortgage products. As the landscape of product offerings continues to expand, marketers have to determine how they approach marketing different kinds of reverse mortgages to different sets of borrowers. For Jean Noble, Chief Marketing Officer at Reverse Mortgage Funding, LLC (RMF), it begins with an “umbrella” term to capture all kinds of products.
“When we do traditional things like printed brochures, we use the general term ‘reverse mortgages,’” Noble said. “Within a brochure, you’ll eventually get to a page that gives a comparison of all the different products that are available out there. But, we’re just talking on a high-level perspective. Our role as a marketer is to get someone interested [and] educated a bit, but it’s where that really experienced loan advisor comes in to […] do a really thorough needs analysis and then can suggest a loan program to really fit [that borrower’s] needs.”
While RMF has largely retired the use of the “HECM” acronym in marketing materials, Noble added that if you find some leads have been generated from that term specifically, it is likely a very good one because it’s evident of a potential borrower who has done more in-depth research. That usually means that borrower is seriously considering getting a reverse mortgage, she said.
The next generation
While much of the reverse mortgage industry is currently focused on the baby boomer generation, the older members of Generation X will be turning 62 in just a few short years. The industry has yet to pivot to potential Generation X borrowers, but that groundwork can be laid by appealing to the adult children of current borrowers, which fit the profile of the next generation, Smith said.
“I think it’s very, very important that you include the children of seniors in awareness marketing and the general conversation,” she said. “It’s not so much for lead-generation, it’s just to make sure that the positive awareness of the product is there, and that has to go beyond just the customers that we’re targeting today. Whenever we’re doing general PR, we try to make sure that we coast across that generational outlet.”
While baby boomers deserve the majority of attention from the industry at the moment, that won’t always be the case, Smith recognizes.
“Before we know it, the Gen X’ers will need a reverse mortgage,” she said.