No business in America has been spared from the widespread impact of the COVID-19 coronavirus pandemic, but reverse mortgages are different insofar as the products are designed to alleviate additional financial burdens that may be afflicting seniors. Coming into a new role in charge of marketing reverse mortgages during such a unique time may be disruptive, but Timothy Harder says he’s ready for what comes next.
Having recently joined Madison, Wis.-based Fairway Independent Mortgage Corporation as its national reverse marketing specialist, Harder’s years of prior experience in the reverse mortgage space coupled with the company culture of Fairway lead him to see the challenges currently faced by the nation as a unique opportunity to expand business. From identifying the new possibilities in the sector to landing at a company like Fairway, Harder describes having an outlook that is also prepared for new challenges.
‘Blue ocean’ of opportunity, old challenges amplified
After having recently moved to Oklahoma with his wife and working in an entirely different business, Harder identified some unique potential that was building in the reverse mortgage space when he decided to transition back into it after having previous roles at Mountain Pacific Mortgage, and 1st Reverse Mortgage USA.
“Looking at developments and what’s going on with reverse mortgages and the economy, it was easy to see what I would call a blue ocean of opportunity coming down the pipe with reverse mortgages,” Harder tells RMD in an interview. “I felt that the timing was right to get into the mortgage business. And so I did my due diligence, and my research in looking at several different companies. Fairway was at the top of my list.”
Harder then reached out to Fairway’s National Reverse Mortgage Director Harlan Accola, and the two had a conversation about what they each thought the state of the business was, as well as what it could be.
“We found a good fit there,” Harder says. “It was an easy conversation to have, starting off well and ending well.”
In terms of how the current moment is different in terms of presenting the reverse mortgage product category to potential clients, many of the same challenges surrounding product education persist. However, the circumstances of the pandemic have augmented the old issues to the point that they’ve become even more pressing, Harder says.
“That’s not true just with COVID, but I certainly believe that COVID has accelerated the potential challenges coming down the pipe with the economy,” Harder says. “Along with the education to homebuilders, real estate agents, financial planners, bank and credit union presidents and managers, this product is continuously being more and more well-received. As we know, with 10,000 people turning 62 every day, this will be one of the answers to the future Social Security problem.”
New challenges stemming from COVID-19
While many of the perennial challenges may be amplified because of the current situation in the country, there are also plenty of new challenges spinning out of the pandemic that affect seniors, particularly those who are at a critical point in making the transition from working into retirement, Harder says.
“A lot of seniors have lost their jobs, and there’s a good chance that many of them will not get their jobs back as the economy starts to open back up,” Harder says. “Companies will open up with less employees going forward in a lot of areas of the country. The combination of the stock market challenges, the limitations on work going forward with seniors and the fact that 10,000 people a day are falling into our category just opens up that there needs to be some alternatives for retirement.”
That much is increasingly true for people in their early-to-mid 60s as much as it continues to be true for those in their 70s and 80s, Harder says.
Meeting seniors where they are
In terms of connecting with more seniors, it has to center on meeting the most pertinent trusted advisors that seniors — specifically baby boomers — maintain, Harder says. That primarily means banks and credit unions.
“A lot of us baby boomers are very comfortable with bank lobbies and doing our banking in person,” Harder says. “The younger generations are more used to electronic banking, but the baby boomers still have relationships with bankers, especially as you get into smaller towns and rural parts of the country. The bank president or the bank lending departments, and it’s the same thing with credit unions.”
Seniors’ continued affinity for banking in-person and relying on the relationships they’ve built at their bank often means that those same seniors seek counsel from those organizations, especially when it comes to both the forward and reverse sides of their mortgage questions.
“In addition, banks and credit unions are working more hand-in-hand with real estate agents, homebuilders and financial planners,” Harder adds. “Those three categories are also the trusted advisors for anybody purchasing or using their services. And therefore, the landscape is the continued education of banks, credit unions, realtors, homebuilders and financial planners. I believe it’s now all starting to come together, as we all felt it should have come together 5-7 years ago. Now, it seems to have a lot more momentum and traction in terms of people being more receptive to reverse mortgages.”
Standing out from competition
In terms of how Harder hopes to differentiate Fairway from its competition in the reverse mortgage space, much of it stems from directing the company’s efforts into areas that he knows will help to elevate the position of the company’s reverse offerings, he says.
“In this arena, what I bring to the table is multiple years of experience dealing with community banks and credit unions,” he says. “That’s a unique relationship, and it takes time and patience to build trust, and to educate and have a rapport with them. What I can do is continue to build that while the loan officers and branch managers continue to work on their day-to-day loan responsibilities. Then as the relationships come together, I can help make a clean handoff to the branches to facilitate the local banks and credit unions.”
In terms of making a more concerted push to local banks who may seek out reverse mortgages to solve a problem they may have related to delinquent loans, it’s unfortunate that’s happening but also fulfills the need for reverse mortgages in the first place, Harder says.
“It’s at least fortunate that we can continue to help seniors stay in their homes,” Harder says. “Certainly nobody asked for COVID, and to be quarantined and to lose their job overnight. But if the reverse mortgage can facilitate holding off a foreclosure or taking somebody out of forbearance and eliminating their mortgage payment, that is a very good thing. It’s unfortunate the way it’s had to come about, but it is here and we’ve all got to deal with that.”
Based on April 2020 endorsement data compiled by Reverse Market Insight (RMI), Fairway is the eighth largest reverse mortgage lender in the country, with 1,266 endorsements over the prior 12 months.