How to Build Trust with Reverse Mortgage Prospects: Part 1:

Communication is Key

You can hold a home in living trust, or create a trust fund for the next generation. But building an emotional “trust fund” with potential reverse mortgage clients — one you can draw upon throughout the sales cycle — is not as simple as a monetary investment. Creating trust calls for a wealth of skills that must be both genuine, and polished to a high gloss.

Building trust is an art form. The average reverse mortgage sales cycle until purchase is nine months — the amount of time it takes for a baby to be born. It’s an apt metaphor. In birthing their reverse mortgages, the seniors you serve are initiating a major life change that can be thrilling and scary at the same time.

What’s more, the manner in which reverse mortgage professionals interact with prospects is changing, from face-to-face “meetings at the kitchen table” to Call Center referrals, where you may never see your prospect in person. While Baby Boomers are often more comfortable making purchases by phone or even over the Internet than their forebears, it’s also true that one’s home is typically the largest asset someone owns, and transacting a reverse mortgage with a faceless originator requires a high level of trust in the person, as well as the process.

Here are several keys to developing client rapport:

Be highly knowledgeable. The more you know about the nuances of reverse mortgages, and how these options affect your target market, the easier it will be to build a trust-based relationship.

Communicate clearly and honestly. Share the disadvantages as well as the advantages of a reverse mortgage, e.g.:

  • Do your prospects understand that the consuming equity from a reverse mortgage would otherwise be passed to their heirs or estate?
  • What if they want or need to move due to health issues or changing priorities, just a year or two after securing a reverse mortgage?

Listen deeply to their story. Why is this couple or individual looking into a reverse mortgage now? What’s driving them? This is your best starting point.

In Part 2, we’ll look at factors that influence seniors’ ability to trust, as they grow older.
Reverse Mortgage Trust, Build Trust with Reverse Mortgage Prospects

Road block: Lack of funds for HUD Counseling: Industry Leader Update

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Lack of funding for HUD counseling creating a road block for those who need it the most

As we enjoyed our weekend October 1st came and went marking the beginning of the fiscal year 2012 and more importantly the date when funding from the government for mandated HUD counseling stops. This is creating delays in scheduling counseling and even worse may prevent lower income homeowners without the money for upfront counseling fees from moving forward. Either way you slice it, this is hurting the potential borrower the worst.

Lack Of Funds For HUD Counseling From Congress
Ironically when the government created the HECM (Home Equity Conversion Mortgage) program, counseling was a built in requirement. Why does congress fail to fund a requirement for a federal program they created in the first place? Politics aside it appears we may have some hope of seeing funds restored at some level in the future.

What are your thoughts? How would you propose HUD counseling be funded outside of the government. Leave your comments below.

 

The truth about relocating: Marketing to the mature homeowner part 4

Senior Moving“When I retire I plan on moving to a smaller home.”
“When I retire I’ll relocate to be closer to the kids.”

Although people may make similar statements in middle age, the reality is quite different. One study found the general move rate for seniors aged 55-64 to be just 7.4 percent per year. Clearly, while the idea of relocating to a senior-centric area (such as Florida) or to be nearer adult children might appeal, the pull of the home where they’ve raised those children, built a life, entertained their friends, and created a lifetime of memories is often stronger.

This is a boon for reverse mortgage professionals, who can help people avoid having to sell their memories (i.e., their home) in order to generate sufficient cash flow for their golden years.

There are emotional and logistical issues to moving and/or downsizing, as well as financial considerations. For some people, moving makes a lot of sense: the house is just too big, or their health isn’t up to caring for it. For the vast majority, however, aging in place (see our series on mature homeowners) is the keynote for savvy seniors, thus making them ideal reverse mortgage leads.

To better understand your target market, consider that leaving their long-term homestead means:

  • Emotional upheaval. Their house holds a lifetime of memories, as does the neighborhood. They’ve built relationships with everyone from the grocer to the librarian to their auto mechanic; it can be as difficult to let go of these peripheral connections as it is to say goodbye to cherished friends.
  • Relinquishing friendships. It’s harder to meet and form new friendships as we age, partly because we don’t have the built-in people access we did when we were younger (through school, work, civic and community activities, health clubs, etc). Some seniors may have decades-long friendships in the town where they’ve lived all their adult lives; losing these friends at this life stage could precipitate depression.
  • Logistics. Not only does relocation — especially to a smaller dwelling — necessitate selling, storing, or giving away precious possessions (a huge task in itself), there’s also the matter of adjusting to a whole new area, and choosing a new doctor, dentist, hairdresser, grocery store, etc. Many people can find these tasks daunting, depending on their age, mobility and overall health.

Thus, in marketing reverse mortgages to the mature homeowner, it’s wise to recognize and acknowledge their choice to stay put, for all these reasons and more. Your reverse mortgage prospects will feel validated in their decision — especially knowing that the equity in their beloved home can help support them as they grow older.

Cookie-Baking Granny … Or Purple-haired Artist? Marketing to the Mature Home Owner / Part 3

In the Leave It to Beaver and My Three Sons era, grandmas wore aprons, baked mouth-watering cookies, and indulged their grandchildren in ways mom and dad would not. Grandpa might have been a bit gruff, but his grandchildren knew his arthritis was acting up, and he loved them even if he couldn’t run and toss a ball like dad. Had reverse mortgages existed back then, our grandparents probably wouldn’t have known what to do with them.

Welcome to the third millennium. Lillian, age 83, sports fuchsia-streaked hair and a dry wit. After lovingly nursing her husband through a long illness, followed by a grieving period, she’s now so busy she doesn’t have a lot of time to chat.

She’s creating charcoal portraits of the hospice staff that cared for her beloved during his final weeks. (Lillian only discovered her artistic talent at 70, when she enrolled with her daughter in an art class). She also tutors several high school students, and participates in a discussion group at the local college. She often eats meals out because she hasn’t time to shop, cook, and keep up with all her activities. Fortunately, she has the financial freedom to enjoy her unorthodox lifestyle, unfettered my monetary concerns.

Lillian is by no means unusual among today’s dynamic elders. (See previous post, Marketing to the Mature Home Owner / Part 2 . Though some seniors may still live as our grandparents did fifty years ago, many more are coming into their own late in life, taking up hobbies they’ve just discovered, like Lillian, or those laid aside while raising a family and working long hours. The calendar may call them “old,” but they’re still giving younger folks a run for their money, pun intended.

The best way to reach these reverse mortgage prospects? Remember that people don’t usually change dramatically just because they age; they simply become more of who they’ve always been. So in marketing reverse mortgages to 70-plus homeowners, appeal to their independence and interests, engage their intelligence, and you’ll be rewarded with a concomitant interest in reverse mortgages — and some wonderfully unique new clients.