There are many national mortgage lenders operating on successful wholesale lending models, some of which have the resources to advertise phone numbers attached to centralized call centers. In addition to providing high volume credit, these companies can be an important source of education for reverse mortgage borrowers across the country, even those borrowers who may not do business with these larger lenders.
For many borrowers – especially seniors who prefer to have easy access to a lender in their own backyard – the touch of a local business can be essential to opening up their business. For those reverse mortgage lenders who specialize in offering a local touch, there is little substitute for connecting with a borrower on this more personal level. In addition, forward loan officers who are unaware of the reverse mortgage options need to be educated about when a senior client would benefit from a reverse mortgage.
These are some of the perspectives shared in a webinar hosted by RMD earlier this summer that focused on the topic of local reverse mortgage lending and the differences it can have in larger operations.
The Importance Of The Local Touch To Some Borrowers
The educational value of large print ads or national television commercials relating to the reverse mortgage loan product category should not be underestimated in any conversation about an industry that relies heavily on consumer education. But even if a lender had the most compelling ad in the world, there are some borrowers who simply never get caught by a phone number on a call center. For these seniors, the local touch is key, according to Jeff Foody, president of Northwest Reverse Mortgage based in Clackamas, Ore.
“The presence on site is important,” he says. “These are people who don’t want to call the call centers from California or Florida, they want to be with someone who is there, they want to know that if something goes wrong, they can knock on our office doors and see Someone’s face. That never happens, but at least they want to feel like they know they can. “
It goes beyond the ability to knock on an office door, however. It is also about a simple penchant for helping businesses that operate locally, a principle some borrowers simply cannot be put off by.
“They want to know that they are keeping the business local. Even though we know the reviewers are being pulled from pools in the area, they want to know that they are working with people who are all on site, it’s a comfort to them, ”he explains. “I can’t tell you how many calls I get each week from people looking for reverse mortgage information. They might have called one or two of these big national companies, they got a DVD or information, and then they finally called us because we were there. I would say we get tons of it [types of clients]because people prefer to deal with this local flair. “
The “system” of the non-reverse loan officer
Rightly or wrongly, some forward and reverse lenders, operating on a less personal level than the local practitioners, can also create a prospect in a borrower’s mind that they are doing business at any cost, says Foody . As benevolent as the originators of banks, credit unions, and lenders may be, some borrowers may have perceptions that are difficult for them to shake.
“If you only know a hammer, everything looks like a nail,” he says of these perspectives. “And if all you know is a 30 year schedule, it looks like a 30 year schedule.”
However, there are some lenders at the local level who can fall into this mindset, not because there is something wrong with them, but because they are also unaware of other options like a reverse mortgage, especially if they are all familiar with it being the forward side of the business .
“I worked with a local mortgage company and created a reverse mortgage department for that local mortgage company,” says Foody. “I’ve been with them for about eight years and one of their top loan officers directed me to take out a reverse mortgage loan for their parents. It was the first time I went to see them and when I tried to go through the numbers and numbers, it turned out that this loan officer had just refinanced her parents into a 30 year loan about a year ago. “
Even though Foody had been with the bank for a long time by then, he asked the Forward Originator why her parents weren’t referred to him to refinance the Forward loan and it was simply because she had never thought of turning back before that point .
“It’s up to us to raise them,” says Foody. “A lot of these referral partners, part of their problem is that they don’t want to be the ones to propose a reverse mortgage to a customer if they are not comfortable and confident about what a reverse mortgage is. We all know that reverse mortgages still have a negative connotation for a lot of people, and they’re not comfortable educating people about it, that’s our job.
Education as a way forward and its importance on site
Foody believes these issues can be resolved as long as the industry at all levels – but perhaps especially the local level – takes the time and effort to adequately educate clients and referral partners about how a reverse mortgage is applied to a senior’s finances can situation.
“The only way to overcome obstacles is through education,” he says. “So we have to go out and train these potential referral partners. We need to have lunch at the bank or credit union and learn to sit down and explain to them what reverse mortgages are. You will inevitably change your perception of reverse mortgage if you can educate them and overcome the obstacles. “
Part of the power to specifically educate about reverse mortgages comes from specialization, at least for Foody. As a reverse mortgage practitioner who has never been directly involved in the traditional mortgage business, he knows that the use of this information instantly tells borrowers or students in continuing education courses that he is particularly dedicated to the reverse field.
“What we don’t do as a company are traditional forward mortgages,” he said. “I’ve never done one before, all I do is reverse mortgages. And for me this is my pitch: I say to banks, credit unions and other mortgage lenders, ‘I don’t do what you do and you don’t do what I do. I’ll help you with the reverse mortgage. If we get into that and the valuation is low and I can’t get the reverse mortgage working, I’ll refer it back to you. ‘”
This helps these partners understand the value and potential strength of specialization, as well as the potential benefits that a reverse mortgage can bring to a customer, says Foody.