At a time when reverse mortgage lenders are finding themselves with a broad, more robust product landscape, finding new ways to connect with borrowers and simplify the reverse mortgage process becomes increasingly important. With additional product options comes new ways for technology to play a part in multiple levels of the business, and reverse mortgage companies are paying very close attention to the ways that technology can be used to enhance operations.
This was the predominant theme shared by reverse mortgage professionals at ReverseVision, Open Mortgage and American Advisors Group (AAG) in a recent webinar conducted by RMD discussing how technology can be best leveraged to understand competition and client profiles in the reverse mortgage business.
The current technology landscape
One of the only current constants in the reverse mortgage technology landscape right now is change, and it then becomes a matter of how the emerging tools can make the necessary functions of the reverse mortgage business simpler and easy to use, particularly on the side of the loan originator. This is according to Patty Wills, national retail reverse mortgage sales manager at Open Mortgage.
“It’s a matter of having technology that we can create and make simple, smooth and intuitive, so that it can work for everyone, while creating an experience for the customer that provides the information smoothly and simply,” Wills says. “So, our program allows the loan originator to work in a CRM that’s easy and intuitive to use, and then push the needed information into RV when they’re ready.”
Looking at the loan originators as a kind of customer in addition to reverse mortgage clients is helpful, because it allows the entire technology conversation to be condensed into accomplishing the most industry-specific tasks as simply and efficiently as possible, Wills says.
“Our goal is to match the technology with the customer,” she says. “A complicated program that few can use effectively is really not useful. We need something that can provide something clear to our borrower customers, and something that even [a less sophisticated user] can employ intuitively in a way that can work for them.”
Another problem that technology can help to address is the general lack of reverse mortgage information that exists in the traditional lending arena, according to Wendy Peel, VP of sales and marketing at ReverseVision.
Peel detailed looking at industry statistics provided by the STRATMOR Group in which 1.3 million traditional loans had been done for seniors age 60 and over in 2017, while in the same period of time only 55,000 HECMs were conducted for the same demographic. Placing comparison tools into loan origination software that visualizes the differences between a traditional loan and a HECM can largely produce more HECM business, she says.
“These are very powerful tools,” Peel says. “We know that in a blind taste test, borrowers are actually going to choose a HECM over a HELOC, yet the data is not showing that that’s happening. So, [we ask ourselves] how we can build tools to help with that. […] Let’s play the hand that we’re dealt, and let’s focus on the things that normalize it and make people feel confident to help change the hearts and minds of [reverse mortgage perceptions].”
How tech can connect with borrowers
One of the very common misconceptions about the senior demographic in general is that they are either technology averse, or technology illiterate. That just simply isn’t the case, according to Kimberly Smith, SVP of wholesale lending at AAG.
“The bottom line is that the old misconception that our demographic is not using the computer, or is computer illiterate, is completely misguided,” Smith says. “We see more and more interaction from a wide variety of customers online on the computer. So, that’s probably one of the things this industry has to wrap their head around and use for [technology] strategies going forward. There’s a shift in the reverse industry as originators realize they need to be versed in several solutions, and that will help them position the reverse appropriately.”
Picking up on Wendy Peel’s data concerning the use of a HECM over a HELOC when a borrower has the ability to compare the two, Smith points out that the reverse mortgage industry generally does not conduct enough of those direct comparisons with borrowers when laying out what options are available to them.
“As an industry, we’re not doing a good job of side-by-side comparison,” Smith says. “Borrowers have either seen the HELOC or they’re seeing the reverse, not a side-by-side. So, technology solutions, such as the ReverseVision Sales Accelerator that ReverseVision offers which actually shows a side-by-side side comparison [between] a HELOC and a reverse is a very valuable sales tool.”
Allowing borrowers to directly compare different mortgage products, as opposed to being given only one choice of an option to use, also helps originators directly by changing the psychology of the sales scenario, Smith says.
“If you’re putting two products [in front of the client], let’s say a HELOC and a reverse mortgage side-by-side, it opens up the dialogue and a different sales conversation with your consumer,” she says. “And the conversion rates will go up.”
The future of tech and reverse mortgages
While younger generations are often singled out as primary users of technology and its incorporation into daily tasks, older Americans are using technology far more than people think they do. This is especially apparent in the financial services space, and industries are going to have to acclimatize themselves to the greater use of technology by clients. The reverse mortgage industry is no exception, Peel says.
“Seniors actually use technology more than any other demographic according to point of sale data,” Peel says. “They are more likely to actually tie their bank accounts and everything else in at the mortgage process than even younger borrowers because, frankly, they’ve done it. They’ve done loans before, and they understand what is needed, so it’s a no-brainer for them. So, that part of the equation means that LOs adapting to help serve their borrowers in a different way is going to be important for the future.”
The future prosperity of the reverse mortgage industry also rests upon the ability for it to be seen as another loan product, as opposed to something wholly separate from other lending options, Smith adds.
“Our industry has to continue to innovate and integrate. There are so many great tools designed for the conventional mortgage lending space that we should, and could leverage for reverse growth,” she says. “We also have to continue to work closely with the broader mortgage market. Way too often reverse is seen as different, and we need to bridge that [gap].”
One way that the AAG wholesale division is accomplishing this is by incorporating mortgage statistics into conversations with borrowers, Smith says.
“[This] gives quantitative evidence of consumer experience from the sources our mortgage peers know and trust,” she says. “That’s just one other lever that we can use to help the entire mortgage industry see us as simply another product rather than a completely different industry.”