Tech Brings Forward and Reverse Mortgages Closer Together, Expanding Opportunity

As the COVID-19 pandemic has necessitated the reverse mortgage industry to more quickly embrace new kinds of technologies in order to continue efficiently keeping the business moving, the additional benefit that comes with that transition is that operational processes are being brought more closely in-line with the way the traditional, forward mortgage space operates.

This is according to a panel of reverse mortgage professionals during the National Reverse Mortgage Lenders Association (NRMLA) Digital Summer Meeting in July. As reverse mortgage professionals continue to explain to clients how the specifics of a reverse mortgage transaction works, the ability to use technologies that they may have already become familiar with from an interaction with the traditional mortgage business could help to overcome some of the stigma that can sometimes remain attached to the reverse business.

More familiarity breeds more comfort from clients, forward originators

Forward mortgage originators have had the latitude to incorporate the kinds of technologies that the pandemic has pushed the reverse side of the business into rather quickly, but with that greater uniformity of process between forward and reverse can come more comfort in terms of engaging with the reverse mortgage business from the perspective of the client. This is according to Steven Sless, reverse mortgage division manager with Primary Residential Mortgage, Inc. (PRMI) and branch manager with the Steven J. Sless Group.

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“For forward originators, it’s no big deal to do a Zoom call or to use DocuSign. They’ve been using DocuSign forever,” he says. “The more that the reverse industry transitions over to being comfortable using these technologies, and they become just part of everyday business, I think the more we’re able to turn to [our clients] and say that reverse isn’t all that different from forward.”

This would be true at least from an operational standpoint, Sless says, since obviously the processes related to the product specifics, the educational journey associated with it and the details of the sales cycle are distinguishable from the forward business. Aligning the technology landscape more closely with the forward side, however, can provide additional borrower comfort and potentially even new referral partnerships from forward originators.

“I think we’ve seen an uptick in our forward originators referring business into our group, because we’re able to communicate with them via Zoom,” he says. “And then, I think the reverse industry is starting to slowly become very similar to the forward space in that we’re okay adapting to technology. The more we do that, the more we’re going to be able to draw in forward originators. The reverse business is going to expand because of that.”

‘Standardizing’ mortgages

This potential was also observed by Steve Irwin, president of NRMLA. Having those in-depth conversations while making the individual distinctions about the unique elements of the reverse mortgage product category is something that can help take away some of the apprehension that some clients may feel prior to considering a reverse mortgage option, he says.

“A mortgage is a mortgage is a mortgage,” Irwin says. “Understand it’s a unique, protected class of client [and that] there are intricacies and nuance in the sales and in the way it works. But the execution is very similar to the forward side.”

Between elements like the mortgage itself and the deed of trust, it remains the overarching realm of mortgages whether it falls on the forward or reverse side, he says.

“It’s not something frightening, but is something that can get more standardized, and more efficient.”

Making tech fun and personal

One of the other key elements that can allow for the reverse mortgage business to further engage with aligning technologies is to make the process fun for some seniors, since contrary to popular belief, many older clients actually find it exciting and interesting to engage with technology as opposed to that process being off-putting, Sless says. When asked directly whether or not clients have shown reservation about the prospect of being on camera, that has not been his experience.

“I don’t think they do,” Sless responded when asked by RMD whether or not clients are reticent about feeling nervous about being on camera. “Our experience has been that the borrowers love it. But I think it’s important to point out that we don’t just use video to have face-to-face [conventional] meetings with clients.”

As an example, Sless described using Facebook’s Messenger platform to connect with a client so that he could see a recent remodel of a kitchen that they may have spoken about, and the familiarity with Facebook and seniors’ presence on it makes it easier to connect and have those kinds of conversations, he says.

“We’ve been able to use video, not only to engage on a deeper level with our clients, but also to get a better idea of what their house looks like,” he says. “For them to take pictures with their phone, and text them to us or email them to us. We try to avoid texting [sensitive information] due to security issues, and we don’t want sensitive documents texted to us. But if it’s something simple, then yeah: text it to us. If there’s not personal information on it, text it to us.”

That lack of fear for getting on camera isn’t uniform, however, as Christina Harmes Hika, originator with the C2 Reverse division of C2 Financial Corp in San Diego, Calif. Has encountered clients who exhibit some apprehension for getting on camera. To get around that, she’s sure to take the time to craft video messages on a personalized basis to increase the potential client’s engagement.

“I think it’s really important for clients to understand their entire range of options, and you have to make it simple,” she says. “In California, our home values are in a range where we can do both HECMs and proprietary loans. So, my videos go over all the options and the differences specifically for that client.”

If an individual client has specific provisions that are relevant to their situation, then it pays for the extra step of customization to be taken so that they can refer back to that video in the future and understand how the loan interacts with all of their individual circumstances, she says.

“I think people will only really listen well and understand when it’s relevant to them and their situation,” she says.

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