Earlier this week, multi-channel national mortgage lender Guaranteed Rate announced the appointment of mortgage veteran Ryan Ogata as its new EVP of reverse mortgage lending. With a mission of “super-charging” the division, Ogata is new to the reverse side of the business but expressed a resolute attitude about the mission itself and making a difference in the company’s reverse mortgage activities.
RMD sat down with Ogata to discuss his impressions of the reverse mortgage product, and how he hopes to make an impact in the space.
Chris Clow: Guaranteed Rate has gotten more involved on the reverse side of the mortgage business over the past several months. Where did that idea, attitude and enthusiasm come from ahead of your appointment?
Ryan Ogata: I think it’s really more a question about the converging forces that are happening right now. I think a lot of companies, including ourselves, are looking at reverse as being something that makes sense in terms of what’s going on right now.
If you look at the amount of home equity that’s held by baby boomers [along with] the other statistics surrounding what the average retirement account [balance] is, along with the economic climate that we’ve been in for the last couple of years, I hate to say it but the product exists currently [in peoples’ minds] as something of a loan of last resort. From that standpoint as a necessity, there’s probably going to be much more interest from the consumer in seeking out this product, because it just fills the void right now with the various kinds of headwinds we’re facing.
So I don’t think that’s really unique to Guaranteed Rate, it’s probably more unique to the industry at large, where forward companies are starting to take a closer look at reverse.
Clow: Tell me a little bit more about your prior interactions with reverse. I assume it’s probably come up over the course of your career, but what previous interactions with the product category did you have? What was your perception before you learned more about it?
Ogata: I would say my perception is probably the same as most people. They would probably attribute some negative stigma to the product. Just to give you some background about myself, I’m from the San Francisco Bay area and I’ve been doing this for over 20 years. But with housing prices in the Bay Area, it’s traditionally a jumbo market, and that’s just been the way of the world that I’ve existed in up until now.
I never thought in a million years that I would be selling reverse, it came about when I, too, was just looking at some of the demographics and statistics, along with the opportunities here. I felt [like reverse] is probably at the beginning stages of something that’s probably going to take off, and just become a much larger part of the overall product mix [compared to what it] has been historically.
Clow: When this idea was presented to you, was this something that you were excited about? What kind of opportunity did you see for jumping into this kind of leadership position for what is considered a niche product?
Ogata: First off, I love Guaranteed Rate. I’ve been here for just about six years, and I’ve had a great run. I started off as a regional manager in Northern California, and then they moved me into a division role for the Pacific North, and this is an opportunity at what I think is the best mortgage company in the industry.
That company is asking me to [expand] a product which I think is going to be a major part of our product offerings. So, from my standpoint, I’m very grateful that the company was willing to take a risk on somebody like myself, and say, “you’ve got the skill set that we think is going to be required for us to be successful in this space.”
Clow: Some people could make an argument that certain parts of this business seem set in its ways. Is that something you’re hoping to impact by assuming control of the company’s reverse mortgage operation?
Ogata: Let me give you some context for my answer. In the forward space, the size of the market is relatively defined. And what I mean by that is that in any given year, interest rates might work in our favor, and there’s going to be a certain amount of loans out there to refinance and improve borrowers’ financial position.
What that means for a forward originator or a forward mortgage company is that what you’re ultimately competing for is market share. As long as your slice of the overall pie is getting larger, you’re doing your job. We’re very fortunate, I think we just claimed the number two spot for retail originations [according to Inside Mortgage Finance], so I think we do a great job.
Clow: Makes sense. So how does that impact your perspectives on reverse?
Ogata: When I look at the reverse space, and I look at the existing transactions, I see that as a limited opportunity. And then I think larger, since we as a company have an opportunity to possibly change the narrative, change the perception of what this product is, and create a market for it that doesn’t currently exist today.
When you really take the time to deep dive into how the product works and the overall financial plan, and [how it allows a borrower] to use their equity to create a stream of cash to carry them through their years, the product has a lot of positive attributes to it that I just don’t think people pursue because of the negative narrative around the product.
So, long story short, there are very few opportunities in the mortgage space to actually go out and create a market. And that’s what I see when I look at our opportunity with reverse.
Andrew Pohlmann, Guaranteed Rate CMO: To piggyback off of that, I think one of the things that we’ve seen is that we historically, as a company, have been very purchase-centric. You could argue at different points in the day, we probably have more interactions with real estate agents than we do with consumers sometimes because that’s a big source of our referral partnerships.
But one of the things that Ryan has done recently is opened up that conversation to financial advisors. Although we have a great source of business that comes from advisors as a source, this is a product that many of them are not aware of, have not considered before, and really changes what’s in their arsenal to help their consumers have a more comfortable retirement.
Look for more from Ryan Ogata and Guaranteed Rate soon on RMD.