There’s a great deal of responsibility that comes with being a leader in the reverse mortgage industry, but when someone recognizes the importance and impact of their work, that can make leadership in your industry both important and necessary. That impact is something that stays with Mike Kent, the president of Liberty Home Equity Solutions, since he often hears directly from his customers about the ways that a reverse mortgage has made a difference in their lives.
When sitting down with RMD for the latest episode of The RMD Podcast, Kent describes how having direct conversations and correspondences with reverse mortgage borrowers was something he had to get used to, while such things also became something he valued about the reverse mortgage industry in general.
Customer response as motivation
“I’m always kind of amazed at the amount of letters, emails and calls I get from customers, and that was part of the job I had to get accustomed to,” Kent tells RMD. “Having that kind of level of customer interface. It’s been a long time since I’ve been one-on-one with individual customers. It goes all the way back to my loan officer days, so I talk to quite a few customers.”
In some cases, learning about the tougher financial situations of borrowers emphasizes what he feels is important for Liberty to deliver in facilitating a reverse mortgage loan, which is different from other financial services businesses.
“I think the part in this business that’s a little different than others – and I don’t know if it’s just me – but [customer perspectives inform] the amount of pressure I feel to make sure we follow through and get that job done,” Kent says. “That sometimes can be a fairly significant responsibility. You can get pulled into some of these individual circumstances and the next thing you know, you’re virtually living it with the customer. So, that’s tough part of it, but it’s also just an incredibly rewarding part of it.”
In terms of changes that the reverse mortgage industry has experienced over the course of his career, Kent relates general optimism about what they mean for customers since changes to the Home Equity Conversion Mortgage (HECM) program are primarily designed to offer a refined product to the customers that are served.
Citing changes the industry has undergone related to homeowner taxes and insurance, institution of an initial funding level, and changes to principal limit factors (PLFs), Kent says they are all made in an effort to strengthen reverse mortgages for the long-term, as well as motivate innovations from proprietary products.
“I think a couple of years from now, when we look back with that longer lens, we’re going to say [these changes were] really smart things for the program, because what they did is opened the door a bit wider for proprietary products to get a better foothold in the marketplace,” Kent says. “If you want to have innovation in the reverse mortgage market, you’re not going to get it through a government program. You’re more than likely get it through the private sector.”
That’s not to say that there isn’t optimism to be had specifically about the Federal Housing Administration (FHA)-sponsored HECM program as well, however. The changes made to the program will help ensure the HECM program’s viability into the future, Kent says.
“I’m overall quite optimistic about our future, too, in part because of those changes we made that will ensure that at least this product offered by FHA will be able to continue on serving serving seniors,” he says.
The future of the industry
In addition to expressing positivity about the recent launch of Liberty’s EquityIQ proprietary reverse mortgage, Kent sees the future of the reverse mortgage industry as growing on both the proprietary and HECM sides of the business, he says.
“With the HECM product itself, I think we’ll see steady growth over the next five years,” he says. “Nobody’s going to accuse it of being rapid over five years, but I think it’ll be steady. And then, I think where we’ll see the most significant growth from where it is today, over the next five years is probably in proprietary products, and maybe other equity release products.”
The reverse mortgage product may also begin finding its way into more prominent positions on other product menus, Kent predicts.
“I think that reverse mortgages in general over the next five years, I think they’ll start finding places on the product menus of non-reverse mortgage lenders, like forward lenders, and we’ll probably see some banks get back into the industry.”
For the full conversation, be sure to listen to episode 6 of The RMD Podcast, available on iTunes, Google Podcasts, and wherever you listen to your favorite podcast content.