Without audience targeting are Google Ads Dead? Think again…
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. 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.
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.
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.”
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.
Here’s what makes Google unique from other platforms and why reverse mortgage Google ads will continue to reach the intended audience.
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.
A reset is coming to the U.S. housing market and reverse mortgage lending
A return to the ‘New Normal’
A day of reckoning is coming. It’s not doom and gloom. It’s an economic reality. Think of it as the natural end result when a series of mistakes and irrational decisions must be paid. After an unparalleled run the economy and the housing market always seek equilibrium. Now how that exactly plays out we don’t know. But what we can be certain of is there will be an adjustment.
The surge in housing prices has provided an umbrella for many. Extra cash for those who’ve taken a cash-out refinance. A line of credit for homeowners who’ve secured a home equity line of credit. Or a first-time reverse mortgage for older homeowners who are looking to take advantage of today’s ideal market conditions. Then, of course, there are the 4 out of 10 reverse mortgage applicants who are refinancing their existing HECM loan into another to harvest more of their home’s value, and perhaps secure a lower starting interest rate.
Each have benefited although not equally.
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Borrowers who’ve taken out a HELOC should recall the words of Mark Twain. “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” That rain is when home values drop and the umbrella is the open line of credit HELOC lenders will reduce or freeze altogether. But there’s another day of reckoning. One which motivates sage mortgage professionals to play the long game. A view that looks beyond today’s hyperactive market and plans for a return to moderate home appreciation and realistic interest rates. One person who’s taken the long view when it comes to our industry’s market is John Lunde- founder and CEO of Reverse Market Insight. “Given the preponderance of H2H refi activity we’ve been seeing, it looks to me as though the industry could be testing the limits of loans available to be refinanced in some of the historically higher volume areas,” Lunde said in a recent Reverse Mortgage Daily column. Another concern is the leading indicator of future endorsements – FHA case number assignments for new HECM applications. After steady application volume increases last spring and fall case numbers fell in the winter months to rebound to a high of 7,564 case number assignments this March. Following that high-water mark submitted applications fell 13% in April and and 9% in May. The tapering of application volume may be the result of the HECM-to-HECM refinance boom simply running out of fuel. “Interest rates for new production HECMs are at or near the minimum expected rate, so refinance burnout should start to occur, all else equal,” New View Advisors partner Michael McCully tells RMD. “The industry will need to stay alert on appraisal quality as the impact of lower rates producing genuine net tangible benefit to borrowers recedes.” The proverbial ‘day of reckoning’ is as natural as the ocean’s tides. The trick is to know when the tide is receding and have a plan in place to continue catching new business as the waters recede. That day may come well before the Fed hikes interest rates so the question is how do each of us prepare to succeed in a new market?
2 Comments
Its like any refi boom, it will end one day and those who have only done H2Hs will find themselves out of clients one day soon.
Establishing and maintaining relationships with referral sources and realtors will get you through the rough times ahead. There is always some business, either purchase or refi that is not necessarily rate driven. The key is to be the last man standing when all the competition leaves for greener pastures.
Refis have distracted us from our goals for more penetration into the senior community. As some say, refis currently are the low hanging fruit for HECM originators.
I am not against refis. They have immense value to originators and to a much lesser degree, borrowers.
BUT please do not tell me how the industry is seeing real growth from referrals from financial advisors. While the number of refi endorsements expands, there is absolutely no overall growth in traditional HECMs which the vast majority of these referrals turn into, if they close. For example, the total Traditional HECMs endorsed in the first 8 months of HUD’s fiscal 2021 total 18,561 while this total for last fiscal year was 5.8% higher at 19,634. Yet total refi endorsements for the first 8 months are 12,424 which is 298% higher than for the same time last fiscal year.
Refis do not increase the number of HECMs in the MMIF portfolio of HECMs. Refis have no significant influence in the senior community. If our Traditional HECM endorsements are shrinking, it is extremely unlikely that we are seeing our efforts with the financial advisors resulting in more HECM endorsements. In fact it seems just the opposite is true. Remember how we were being told over the last few years how proprietary reverse mortgage volume was quickly growing but when looking into the HMDA Report for last year, that propaganda proved to little more than “expedient exaggeration” by those who wanted to paint a far different picture than exists. It turns out that the statements were neither optimistic nor close to realistic.
I am a retired CPA and it is hard to swallow…..