Reverse Mortgage Leaders Aim to Increase Diversity for Customers, Industry

Reverse mortgage industry leaders have pledged to prioritize an increased focus on diversity and inclusion both within the ranks of business leadership, as well as in the customers served by the reverse mortgage industry in order to better accommodate the growing interest observed in the product category over the past few years.

This is being done at the levels of both the industry’s trade association as well as at the customer level, according to industry leaders who spoke during an executive committee meeting at the National Reverse Mortgage Lenders Association (NRMLA) Virtual Policy Conference last month.

RMD also reached out to one of the co-chairs of a new committee established by the trade association to briefly discuss what the industry hopes to accomplish, and the potential effects such a focus could have on the reverse mortgage business.

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Trade association efforts

In a meeting of the NRMLA executive committee taking place at the Virtual Policy Conference, NRMLA board member and Longbridge Financial CEO Chris Mayer discussed the creation of a new committee at the association that is just beginning to take shape dedicated to expanding the diversity and inclusion of the industry and its base of customers.

“We’ve built a new committee this year to work to increase diversity and inclusion in our membership and leadership,” Mayer explained. “With the broader business world and government focused on racial justice and including all people, no matter what their gender and race, we as an industry need to address these issues, both in our organizations and in our work.”

The new Diversity, Equity and Inclusion (DEI) Committee is co-chaired by Patty Wills, national sales manager for reverse mortgages at Open Mortgage, and Misha Hill, customer experience specialist team lead at Finance of America Reverse (FAR). In addition to a greater emphasis on racial equality evident in the government and in wider business today, Mayer also briefly discussed the more specific efforts of the reverse mortgage industry in widening access to the products and services it provides to a wider segment of the population.

“I know many of us are working every day to ensure that there’s broad access to reverse mortgages for all groups and communities,” he said. “This is something that is really important for us as an industry to think about, and NRMLA has been taking on these issues. And we’ll be doing more in this regard.”

One of the aims for the new committee is to serve as a conduit for industry businesses who wish to broaden company cultures around a greater level of inclusiveness, according to the association’s website describing the mission of the new committee.

“NRMLA will be a guiding force for reverse mortgage businesses who are interested in promoting a corporate culture that embraces diversity, equity and inclusion,” the association says on its website.

NRMLA President Steve Irwin penned an update to association’s members in the May-June 2021 issue of NRMLA’s “Reverse Mortgage” magazine publication about the launch of the new committee, where it was clarified that efforts surrounding the committee are starting immediately. He described a “palpable” energy level from the group members, while recognizing that some “difficult conversations” may lay ahead. That does not detract from the “exciting path” he sees for the association and the committee in the future, however.

The customer side, business benefits

In a question-and-answer portion of the executive committee meeting, an attendee asked if the goal of greater diversity and inclusion is one shared on both the business and customer sides of the reverse mortgage industry, and Irwin said that it is.

“That is our goal,” Irwin explained on the panel in April. “[Our goal] is to have our memberships embrace, speak to, acknowledge and name our efforts to be a more diverse, equitable and inclusive association and industry.”

DEI Committee Co-chair Patty Wills discussed how embracing a wider level of diversity and inclusion could already be in the proverbial “tool kit” of reverse mortgage professionals, because the product category’s primary demographic of seniors can often be a difficult one for other people in the wider business world to connect with. On top of that, though, many reverse mortgage professionals already find themselves going out into their communities to connect with as many different types of people as possible.

“Many of us have spent years going out into our communities, into people’s homes and sitting down with people from every background imaginable,” Wills tells RMD in an interview. “We look for total diversity in our customers, and it’s very enlightening to go out and engage.”

At the end of the day, it also just makes good business sense for the industry to try and broaden its proverbial “umbrella,” and to reach as many different types of people as the industry can, she says.

“I do think it’s good for business,” she says. “I think the fact that it’s good for business helps us in looking at our mission statement, and in putting it together. [We always have to ask] where business is going, and all of that is part of using everyone’s skills. It’s critical that we do that.”

Government efforts

The stated goal for the reverse mortgage industry to become more diverse and inclusive also matches the stated priorities of the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA) and the Consumer Financial Protection Bureau (CFPB), three government entities that have direct relationships with the reverse mortgage industry at various levels.

Since the inauguration of President Joe Biden and the confirmation of HUD Secretary Marcia Fudge, addressing issues of racial inequality has been a stated policy priority of the new administration and the goals of Fudge’s HUD, according to official statements.

Additionally, Acting CFPB Director Dave Uejio – serving in the role as presidential nominee Rohit Chopra awaits Senate confirmation – has stated his desire to identify patterns and spotlight inequalities the Bureau may observe in its operations.

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  • First, do no harm – Hippocrates

    The perception prevalent in communities of color is that HECMs are a predatory loan. Care to guess why?

    Watch the latest AAG ads. Tom Selleck insisting in a plaintive, almost irritated tone that reverse mortgages are not some trick to steal your home. Considering what AAG must spend on market research it’s clear they’ve identified a problem if only as a sales obstacle.

    Plotting the HECM tax defaults across Los Angeles county, predominantly African-American communities like Compton, Inglewood, Long Beach, and South Central are overrepresented. Hispanic suburbs like La Puente also show a high incidence of default.

    Clearly there’s access to HECMs, but is there a benefit to these communities or groups by increased HECM participation?

    I know this may offend more than a few, but HECMs are usually a loan of last resort to hang onto a lifestyle that is no longer affordable, or just to survive. The ads of attractive seniors strolling barefoot on the beach living their best years are pretty much BS.

    My involvement with HECMs is mostly in default, foreclosure & probate providing a view of what occurs 10 years down the road. I can tell you loan access was not the problem, use and sustainability is.

    The 2013 Reverse Mortgage Stabilization Act was the first attempt to address sustainability, both for the borrower and the MI fund, with the predictable result of fewer qualifying. Subsequent program changes reduced this further.

    So how will participation be increased in targeted communities? Underwriting standards relaxed? LESA eliminated? Upfront MI waived? PF table change? I can’t see too many other ways. What protections will be put in for the borrower?

    It’s great the NRMLA president feels a “palpable” energy level and “exciting path”. I seem to recall Angelo Mozillo making similar comments about Countrywide and the CRA in these same communities.

    I have a counter proposal: what if we figure out how to care for our existing HECM population before starting something new. The Keep Your Home California reverse mortgage assistance program was funded with a paltry $10M for T&I defaults. Restarting that would most immediately help these communities of interest.

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