How Originators Respond to Negative Reverse Mortgage Media Coverage

It’s no secret that in terms of the ways it’s communicated to the public as a financial product, the reverse mortgage has had difficulty in both gaining and maintaining public trust. Reputational challenges abound for the industry when trying to connect with potential borrowers, which can be impeded further depending on the kind of media coverage that the product and the industry receive.

After last month’s publication of an investigative article by USA Today concerning reverse mortgage foreclosures, RMD contacted several originators to gauge just how this widespread negative reverse mortgage coverage can be.

Whether accessed through vending machines on street corners, through complimentary copies sitting under the doors of hotel rooms or through a highly-visible online presence, we asked if that coverage has the potential to change conversations with borrowers.

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Upset borrowers, counselor conversations

At least one originator shared that his company received calls from past borrowers about the content of the USA Today article, but not because it gave them concerns. Instead, they reacted with indignance at the news outlet’s lack of reverse mortgage understanding according to Malcolm Tennant, president and co-founder of Access Reverse Mortgage Corporation in Largo, Fla.

“Most of our borrowers are more educated about the FHA HECM program than were the USA Today writers,” Tennant told RMD. “Our borrowers’ outcomes are overwhelmingly positive and the press publishing this outdated, sensationalized click bait once again dissuades many who could really benefit from the reverse mortgage from even considering it.”

Still, the presence of this type of media coverage does have a presence in other parts of the reverse mortgage origination process, including in counseling conversations.

“The negative media coverage does come up on a regular basis during counseling,” says Jennifer Cosentini, housing director with Cambridge Credit Counseling Corp. in Agawam, Mass. “Our role as counselors is to educate, and once we explain why and where the negativity comes from, the clients feel empowered with their new knowledge and want to share it with all the naysayers.”

Recognizing, responding to potential consumer reactions

Other originators take a more active role in managing the potential reactions that borrowers could have to negative reverse mortgage coverage. After reading the article, Michael Zwerling, sales manager at New American Funding in Tustin, Calif. recognized that it had the potential to adversely affect the origination of new loans and the closing of loans already in process.

“We took the initiative to send out blast emails and voicemails to all of our leads and loans, with the goal of delivering value to our elders through the use of information,” Zwerling told RMD in an email. “Sales is a game of offense, not defense.”

In voicemail messages sent to customers, Zwerling encouraged them to contact his office directly if they had any questions, concerns or worries after reading the USA Today article. Direct emails conveyed the same message, but in examining the aftermath of the article’s publication and the company’s efforts, the final effect of the news coverage quickly became clear.

“The article had literally no impact on our business,” Zwerling says. “None of the loans in our pipeline brought it up or decided to back out. None of the prospects that we were nurturing to begin the process, mentioned or brought up the article.”

An educational opportunity

When coverage like the USA Today series enters the conversation with customers, interpreting the content can be an opportunity for further borrower education, some originators say.

“I’m all about education, so when I sit down with my clients, the first thing I ask them is what they’re trying to accomplish,” says Rich Pinnell, reverse mortgage loan officer with Guild Mortgage in Redding, Calif. “In asking them that question, I almost always wind up asking them about the things that they’re worried about, as opposed to the things they’re trying to accomplish.”

Those worries can often extend from reverse mortgage media coverage, which can then lead to typical borrower worries regarding what the reverse mortgage could mean for family members in the future. After addressing those concerns with more information, any remaining hesitation leads Pinnell to have direct, confident conversations with prospects about the claims that coverage puts forward.

“We [just go through and] pick it apart,” he says.

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  • Rich Pinnell from Guild Mortgage asks the same question I have asked for 21 years. The same question that my mentors Jeff Taylor and Roger Reynolds taught me to ask. “What are you trying to accomplish?”
    Good on ya Rich.

  • Interesting article! I agree, seniors are becoming more educated on the reverse mortgage, they had to if they are looking to get into one. So many of the new originators of today getting into the business are NOT educated. Therefor, many of our seniors have discovered those in our industry have not been doing them or a lot of their friends justice.

    Times are very different today, the reverse mortgage is a more complicated program than it was prior to 2015. Originators nee to be well informed and kept up on changes almost daily. However, many are not and many companies out there are not requiring tier originators to keep up with the times. Consequently, our seniors suffer! It does not have to be this way, we still have a viable industry and one that serves such an important need to our deserving seniors!!

    John A. Smaldone
    http://www.hanover-financial.com

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