The reverse mortgage industry is comparatively much smaller than its forward, traditional mortgage counterpart, but the pace of demographics and the necessity for more Americans to adequately prepare for retirement are just two of the major reasons why the reverse mortgage industry could grow increasingly important over the next several years.
This is just one thought shared by Clayton Collins, founder and CEO of HW Media, LLC. The company features several different media brands offering news, insights and commentary across the entirety of the American housing industry through publications like HousingWire, RealTrends and FinLedger. At the end of June, HW Media added Reverse Mortgage Daily to its catalog of brands, acquiring RMD from previous parent company Aging Media Network led by RMD’s founder, John Yedinak.
To better understand the philosophy that guided HW Media’s acquisition of RMD, we sat down with Collins to discuss his own journey to understanding reverse mortgages, what led the company to seek out RMD as a new acquisition and why the future of the reverse mortgage industry holds promise for many Americans seeking to find sources of cash flow in retirement.
Where the interest in reverse mortgages comes from
For Collins and the other members of HW Media’s leadership team, much of the interest in the reverse mortgage category is demographic-driven, he says. That led to a previous reverse-centric acquisition in the form of ReverseReview magazine, which was folded into the existing coverage of HousingWire at the time that deal was made.
“We’ve watched where the [reverse mortgage] market is going in the overall real estate and housing ecosystem,” Collins said. “While we’re not a lender ourselves, we do look to align with parts of the industry where we see growth. I think that’s the smart way to operate a business, we go after markets where there’s the opportunity for long-term growth, and hopefully we can be in the right place at the right time and help professionals grow their business at the same time that the market’s growing, and grow together.”
The strategy for HW Media has evolved as time has gone on, Collins says, and RMD will remain a distinct brand that will crossover with other brands’ coverage at synergistic opportunities.
“We believe, at the HW Media level, that having separate publishing brands inside of [a particular] sector’s focus will help us serve the distinct audiences that operate in these niches, but also have institutional knowledge to pollinate content across the ecosystem. And so with the Reverse Mortgage Daily deal and bringing RMD into the HW Media family, the strategy isn’t to fold RMD up inside of HousingWire. We want RMD to live on as a growing, distinct brand.”
Exposing a forward audience more broadly to reverse
Another major potential benefit of RMD becoming a part of HW Media is the newfound ability to potentially introduce more reverse mortgage concepts to a well-established forward mortgage audience that engages with the existing brands, including HousingWire, Collins says.
“What we really hope and what we aspire to is we have a forward audience who is thinking about demographics, every single day thinking about how to serve first-time homeowners better,” he says. “But also, how do we serve the seniors, the retirees in our housing ecosystem that are at a different inflection point in their homeownership journey? The knowledge, content and audience that we gain through RMD will help us better inform that forward audience about what the housing lifecycle looks like on the later end, but also helps the RMD audience by bringing a little more awareness of the reverse product to the forward side of the industry.”
This does not count solely for originators, which remain a critical component of the equation, but also many of the professionals that reverse mortgage loan officers themselves ae often seeking out for referral partnerships, Collins says.
“The real estate professionals, brokers and everybody else who advises current and aspiring homeowners, as well as senior homeowners on what the best decision and best product for them may be,” he says.
The importance of demographics
It’s also important for any housing stakeholder to understand the importance of demographics, particularly as the population ages, Collins says.
“If anybody thinks demographics don’t matter, just pay attention to the residential real estate market,” he says. “No matter what a pandemic or any other challenges can throw at a housing market, these demographics are going to plow right over those challenges and provide strength to the forward and single-family homeownership ecosystem.”
That only becomes clearer when looking further down the road at the way that senior-specific demographics are shaping up for the future, he says.
“If we look to the senior side of the market, over the next 20 years, the percentage of Americans aged 65 or over is expected to expand from less than 15% of our total population to over 20% of the total population,” Collins explains. “That is a massive swing in 65-plus Americans, and the challenge there is data from the Urban Institute is showing that this 65-plus demographic is massively underfunded when it comes to retirement savings.”
For seniors who have an underfunded retirement plan, an issue will rather quickly present itself when they try to maintain their current lifestyle, or pursue other endeavors they may not have had while occupied by a career. A reverse mortgage is one potential path forward for a senior so that retirement can be adequately funded, he says.
“I get super excited and bullish on the future of helping homeowners access housing wealth, [so they can use] the equity they have in their homes to fund the things that they want and need to do in retirement,” Collins explains. “There are a lot of other demographic trends that we pay close attention to. Clearly some of the areas that Aging Media is working on in senior care and home health, those are going to play into how some of these demographic trends play out. I’m excited to be on the mortgage side, and hopefully provide this end of the market the information they need to expand their businesses, and to make smarter and faster decisions.”
Find the full interview with Collins on the latest episode of The RMD Podcast, available now.