Sometimes, when a person finds a path into a career it can manage to become more than just a job. For Wendy Peel — who found her way into the reverse mortgage business through a passion for marketing — being a part of the industry became more than a profession. Instead, it evolved into something of a mission.
This is according to a conversation with Peel, who recently sat for an episode of The RMD Podcast which is available now. After spending several years with reverse mortgage loan origination system (LOS) ReverseVision, Peel found an opportunity to set up a reverse mortgage consulting practice with the BlackFin Group, and described for RMD some of her observations about the industry based on that experience.
Becoming an advocate
In terms of her work with BlackFin in the consulting practice, Peel describes how she went from an industry professional to an advocate by viewing the experiences of those around her.
“I watched very good people in this industry work so hard, and not really move the needle,” she says, describing the ongoing process of product education for consumers and other businesses. “I am a passionate person for the underdog, and I honestly felt like there were disconnects between the technology and how the direct-to-consumer sales market was evolving. And honestly, in terms of the messaging to both the borrowers and even to the industry, I was shocked at how many people in the actual mortgage industry were so wrong about this lending program. So wrong about it.”
Peel also describes an increased level of empathy with the reverse mortgage demographic as the years go by, she explains.
“I’m getting older myself, I started paying attention,” she says. “One of my favorite aunts got a 30-year fixed mortgage at the age of 67, so she could put a deck on her house. Nobody even talked to her about a reverse, it wasn’t even an option. That really hit me.”
Seeing a difference firsthand
She also described a conversation with acquaintances at a wine bar in her neighborhood when the topic shifted to reverse mortgages. The owners of the wine bar asked if anyone knew about the products, and Peel then informed them about her place in the industry.
“Their father was on care, and they were spending money out of their pocket, she and her siblings,” she explains. “He’s sitting on a [home value of] a couple million dollars here in Southern California, and they’re paying for nurses and other care. And her mother not in great shape either, so I got to see the product firsthand and how it worked. I believe in it.”
Like many reverse mortgage professionals, Peel contends that the reverse mortgage is not always something that can universally work for every senior, however it’s important to include the product in an overarching conversation about retirement financing.
“It’s silly [that the reverse mortgage product] is not part of [that dialogue],” she says. “With what’s gone on in the last several years, I’m fearful that a lot of people between the ages of 55 and 65 have taken out a cash-out refi at 80%. At 80%, you’re not going to qualify for a reverse mortgage and the retirement crisis is even going to grow direr. It saddens me that people work their whole lives and are sitting on equity, and they’re not able to have a decent quality of life.”
Rate volatility, counseling
Another component that plays into the retirement situation in the United States today is the mortgage rate environment. Rates have become materially affected by economic volatility with lenders taking steps to pivot on pricing and product features recently, but Peel believes that the repercussions of the rate environment may not be as severe for reverse as they appear to be on the forward side.
“Honestly, I don’t think rates are going to impact [reverse] as severely as traditional mortgage is being impacted right now,” she says. “And the reason I say that is because once the borrowers learn about the product, they’re a little less sensitive because the math makes sense to them. But in the bigger picture, I am worried about new borrowers coming into the market. […] If interest rates rise and we go into a flat LTV, a borrower is not getting a reverse mortgage. And at a flat growth rate, which is likely to happen even if it’s a slight recession, I don’t see us going into a crash the way we did in 2008 in our industry, because the regulations have worked.”
For Peel, this also brings the issue of counseling to mind since the likelihood of a borrower moving through the full reverse mortgage loan process grows significantly after they’ve attended the required counseling session. However, counseling can also be seen as a detractor, she explains.
“I was wondering with all the regulatory changes, what is the purpose of the counseling?,” she asks. “I understand that in the past this product was considered predatory, but with basically a 55% LTV, is it predatory at this point? I don’t think so. I think that the opportunities are to really educate at the policy level about how the changes that have already come into play might make it smoother for seniors to age in place, which the majority want to do.”
The potential impacts of a recession
Peel is also not convinced about an impending recession having a crippling impact on the reverse mortgage industry, she says.
“I think we are going to slow down, but it’s a typical supply and demand problem,” she says. “If you look at anything right now, people over-ordered because there are supply chain issues, and now everything in the world is on sale. Now they think they might have too much inventory because of the pending recession.”
On top of that, the senior demographic has remained generally conservative in their spending, she says, which will help them. That’s not to say that rocky roads are totally avoidable for the mortgage business at large, however.
“Mortgage as a whole is going to see a lot of challenges, without a doubt, because they’re going to have to think about strategy a little differently,” she says. “The interest rates stayed low for as long as they did being coupled with the housing prices going up, it was like shooting fish in a barrel. It was not hard to have folks refi. So I think traditionally, they’re going to have to really think about things, but that’s a huge opportunity for the investors in the reverse mortgage space if played correctly.”
Listen to the full discussion in the latest episode of the RMD Podcast.