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.
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 “Our borrowers’ outcomes are overwhelmingly positive and the press publishing this outdated, sensationalized click bait once again dissuades many who could really benefit from the reverse mortgage from even considering it.”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.