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   The Positive Realist

   March 7, 2019 at 3:46 pm

   What a great interview! Chris seems to be a genuinely nice guy with the right attitude for helping seniors. After all that is the foundation from which successful originators work in this industry. BUT that is not all. It requires a salesperson’s outlook. What Chris gave us is a pattern to be successful, not just a business plan.

   One problem with the interview is that it took place in the fourth quarter of 2018, a little over four months ago and substantially before John Lunde declared that 2,467 HECMs endorsements per month is more representative of the “new normal” than the 4,002 HECMs endorsed in February 2019 (see Reverse Mortgage Daily article posted 3/4/2019). Some are now predicting that the HECM endorsement volume for March and April 2019 will average about 2,250 HECM endorsements per month, a continuing downward trend. Will the loss in HECM endorsements for fiscal 2019 when compared to fiscal 2018 be 15,000 endorsements or even more?

   From 2004 through about the end of 2011, a dominant conversation in the industry was HECM endorsement volume. Most people are now sick of the topic. No longer do we hear that if the industry focuses on the prospect and borrowers, volume will take care of itself. Imagine how that will even get worse if the HECM endorsement volume for this fiscal year is less than 34,000 (last fiscal year it was 48,359).

   So the question few seem willing to address is how to increase HECM demand. To kill the discussion most originators want to discuss how many want HECMs but cannot qualify. Yet if the makers of the Bentley looked at demand in that manner, they would have multiple dealerships in cities like Oklahoma City, OK and be left wondering why that business plan is not working. But sales management at Bently has the vision of what makes profit for the enterprise.

   Chris does not operate his HECM business as if his goal is to reach all seniors who may be helped by a HECM. His goal is to find the richest vein of qualified seniors who will qualify for HECMs and are the easiest for him to reach at a reasonable cost. For him that is referral sources he gains through personal relationships. That works for him. Yet some may not find that feasible.

   So what works and will continue to work for you in the current demand environment? There is no sign that the current squeeze on demand will be alleviated next fiscal year or if it is, how large HECM endorsement volume will be!

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