Exterior-Only Appraisals to End

by Shannon HicksJune 28, 2021June 25, 2021

exterior-only appraisal

<span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span><span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span><span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span><span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span></p> <h2 class="p1"><span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span>Without audience targeting are Google Ads Dead? Think again…</h2> <p class="p1"><span class="s1">Early this month Google announced new restrictions for targeting specific audiences. The restrictions apply to content related to housing, employment, credit, and those who are disproportionately affected by societal biases. The news of these restrictions created quite a stir among industry brokers and lenders who heavily rely upon targeted Google ad campaigns.<span class="Apple-converted-space"> </span>All which may have you asking if these changes will kill future reverse mortgage advertising on the world’s most popular search engine. In just a moment we’ll hear from our online SEO expert Josh Johnson to find out.<br /> </span></p> <p class="p1"><span><a onclick="read_toggle(384044659, 'Read More', 'Read Less'); return false;" class="read-link" id="readlink384044659" style="readlink" href="#">Read More</a></span> <div class="read_div" id="read384044659" style="display: none;"></p> <p class="p1"><span class="s1">Google’s restrictions are not necessarily novel nor unexpected. It was just over two years ago Facebook faced scrutiny from federal regulators for allowing those offering credit or housing finance to restrict ad audiences by race or religion among other questionable metrics that would violate HUD’s fair housing rules. An investigation by ProPublica broke this news in October 2016. It was nearly two years later in August 2018 that HUD filed a formal complaint against the social media giant for discriminatory advertising practices. Seven months after HUD’s complaint Facebook announced sweeping changes. Both Facebook and later Google, took a blunt approach much to the chagrin of lenders and service providers.</span></p> <p class="p1"><span class="s1">What ad filters are going away? In its official release Google revealed, “credit products or services can no longer be targeted to audiences based on gender, age, parental status, marital status, or ZIP code.” </span></p> <p class="p1"><span class="s1">Is this the end of Google ads for reverse mortgages? To answer that question I reached out to Josh Johnson who heads up Reverse Focus’ Online Dominance SEO program and Google marketing. Here’s his explanation.</span></p> <p class="p1"><span class="s1">Here’s what makes Google unique from other platforms and why reverse mortgage Google ads will continue to reach the intended audience. </span></p> <p class="p1"><span class="s1">To summarize, older homeowners are intentionally seeking out reverse mortgage information on Google which means, yes-your ads will be seen by your target audience, even though you can no longer target specific age groups.<br /> </span></p> <p><img class="wp-image-21372 alignnone" src="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-300x169.jpeg" alt="" width="691" height="389" srcset="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-300x169.jpeg 300w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-768x432.jpeg 768w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-1024x576.jpeg 1024w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-960x540.jpeg 960w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-711x400.jpeg 711w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.004-585x329.jpeg 585w" sizes="(max-width: 691px) 100vw, 691px" /><img class="alignnone wp-image-21373" src="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-1024x576.jpeg" alt="" width="681" height="383" srcset="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-1024x576.jpeg 1024w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-300x169.jpeg 300w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-768x432.jpeg 768w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-960x540.jpeg 960w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-711x400.jpeg 711w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.001-585x329.jpeg 585w" sizes="(max-width: 681px) 100vw, 681px" /></p> <p><img class="alignright size-large wp-image-21374" src="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-1024x576.jpeg" alt="" width="1024" height="576" srcset="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-1024x576.jpeg 1024w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-300x169.jpeg 300w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-768x432.jpeg 768w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-960x540.jpeg 960w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-711x400.jpeg 711w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.002-585x329.jpeg 585w" sizes="(max-width: 1024px) 100vw, 1024px" /> <img class="alignright size-large wp-image-21375" src="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-1024x576.jpeg" alt="" width="1024" height="576" srcset="https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-1024x576.jpeg 1024w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-300x169.jpeg 300w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-768x432.jpeg 768w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-960x540.jpeg 960w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-711x400.jpeg 711w, https://hecmworld.com/reverse-mortgage-news/wp-content/uploads/2020/09/In-post-pix.003-585x329.jpeg 585w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <p class="p1"></div> <p> </p> <p><span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span><br />

FHA announced the end of ‘exterior-only appraisals.
Why the H4P may not be taking off

FHA in it’s Info bulletin dated June 22nd said, “(FHA) is issuing this reminder that the temporary guidance concerning FHA’s re-verification of employment, and exterior-only appraisal scope of work option policies will expire as intended on June 30, 2021.” As you may remember last March FHA announced that exterior-only and desktop appraisals would be allowed to accommodate the impacts of the COVID-19 pandemic. Two months ago I interviewed John Dingeman- chief appraiser for Class Valuation. When asked what an exterior-only appraisal entails Dingeman said…

One of the challenges for FHA assignments surrounds the condition of the property, and for many appraisers completing an exterior-only inspection did not allow them the ability to properly identify relevant property characteristics and to credibly render an opinion of value,” Dingeman tells RMD. “As a result, the use of the flexibilities was already limited.” Limited in situations as the one he described in two months ago in a special video segment here on HECMWorld.

With many older homeowners having already received their full vaccination, in-person appraisals should no longer be problematic or health concern. Investors should be pleased as well having a more thorough inspection of the property which secures the loan.

And in other news-only six percent of federally insured reverse mortgages were for purchase transactions in the fiscal year 2020. Looking at H4P endorsement volume from 2009-2020 we see a period of growth from 2009-16 followed by a plateau. However, when looking at the percentage of endorsements that were from purchase transactions the picture changes somewhat showing steady growth until 2020- not surprising since all real estate sales slowed to a crawl in the early days of the pandemic. Perhaps it was this interesting growth trend line or lack thereof that prompted RMD to investigate what’s happening in this unique segment of our already niche market. Jesse Allen, AAG’s president of alternative distribution told RMD, “The other thing I think that holds the industry back a little bit [and keeps us] underutilizing the product is just the sales force’s general awareness and subject matter expertise with the [H4P option]. We have a sales force, as an industry, who just isn’t historically as comfortable working with Realtors or builders [or] understanding purchase. It hasn’t historically been a product that the reverse mortgage originator has worked with. And so, A) it’s a new product, and B) it’s an acquired skill set on many fronts with the industry sales force.”

It should be pointed out that there are in fact, a handful of HECM professionals out there today who are closing dozens upon dozens of HECM for purchase loans. In fact for some, purchase transactions are the majority- that’s right- the majority of their funded loans. As Allen said, it’s a pairing of an originator’s skillset and a strong grasp of how the purchase transactions work. We’ll bring you periodic updates on the HECM for Purchase market in future episodes.

Shannon Hicks

Shannon Hicks - Shannon is the President of Reverse Focus, Inc. He draws from his experience as a reverse mortgage originator and prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he began podcasting and in 2010 with weekly video updates. He has spoken nationally at industry events and is host of the nation’s only weekly podcast for reverse mortgage professionals “Reverse Focus Weekly”. For more information, call 1.800-805-9328 x 3-3 or visit www.ReverseFocus.com .

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Alex Gottfried June 28, 2021 at 5:27 am

My experience with H4P is that most seniors don’t want to purchase another single family home. They are tired of cutting the lawn, shoveling snow and maintaining the property. They are looking to purchase a condo unit where these services are “handled”. Since 90+% of all condos in the US are not currently approved by HUD, condo approval becomes a major timing obstacle. Purchase transactions have a tight timeline which cannot wait for condo approval.

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