Finding Opportunity in a Down Market

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How some are surviving or thriving in a down HECM market

At the risk of channeling Yogi Berra,- all HECM markets are local. Perhaps we should embrace Berra’s statement that ‘the future ain’t what it used to be”. One of the biggest challenges any industry, city or individual can face is to embrace the reality that things will never be like they were before and look for new ways to succeed in the new normal of doing business.

Reverse mortgage volumes predictably declined sharply in the wake of HUD’s most recent changes to the Home Equity Conversion Mortgage which significantly reduced lending ratios for borrowers after October 2nd. Month-to-month HECM endorsements fell nearly 18% in February- April endorsement dropped 23%. It is in lean times such as this when market research an invaluable resource.

Local markets are as unique and varied as the residents who live in them. The key is learning how to strategically leverage your local market. “For originators that are active locally, there are always top 10 zip codes with significant production in their immediate area where they have zero market share. ALWAYS”, says John Lunde, President of Reverse Market Insight. Considering the time and expense entailed in HECM marketing it is surprising how few actually analyze their markets. Tools such as Reverse Market Insight’s paid service- the Retail Dashboard-provide a wealth of local market data including who is originating loans in your area, home values, and market size. Their free research data includes HECM Trends ranking the top cities for HECM growth and key zip codes, and the HECM Lenders industry overview showing the market performance of 82 key metros across the U.S.

Since October 2nd I have spoken with over a dozen HECM professionals. For those who have stabilized or grown their production, I’ve found several recurring traits. One is …

Download the video transcript here
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John A. Smaldone May 7, 2018 at 8:11 am

Great message for the day Shannon. I also liked Jim Veale’s quote you went over, both of you are right on target!

To add to your presentation, today’s originator must work harder than ever! They have to work harder and smarter. Shannon, you points brought up on analyzing ones area and what they did in the past was great advice.

Also, in today’s environment we have to be creative, we need to look at products like the H4P. Figure out how to market it and to who! We have a lot of potential with the H4P program.

Start networking heavy as Shannon suggested but go outside the box, start calling on recreational dealerships, Boat dealerships, Funeral Homes, Long Term Health Care providers, Elder Law attorneys and more!

The professional sector is the trend of success for the future! We need to focus on those professionals that will work with us as partners. We can build their business up and they can build our business up.

When we get one of their clients or customers, the trust factor has already been established, can’t beat that one my friends!

This was a good session, the HECM is alive and those that adapt and change will also be alive!

John A. Smaldone

The_Critic May 7, 2018 at 11:41 am


I am not sure about the following: “We can build their business up and they can build our business up.” If we had that much to offer them, we would see highs, not lows for HECM endorsements.

I have yet to hear of anyone getting HECMs from referrals from boat dealerships or funeral homes. As to boats, they are hardly the asset we should be encouraging HECM borrowers to invest their proceeds in. According to one very experienced boat salesperson the best two days of owning a boat is the day that the owner purchases it and the day he sells it.

H4P grows almost every year so I have no idea why its proponents call it sleeping. As to being a giant, this idea exceeds both expeditious exaggeration and irrational exuberance.


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