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We are entering the second age of the HECM
The new face of reverse mortgage lending begins now. Welcome to the Industry Leader Update. Last week I had the privilege to sit in on a session updating NRMLA members on our industry’s Extreme Summit initiative launched last year. Many of our viewers know that often our industry’s image has often been shaped in part by negative media stories and misinformed columnists and consumer groups. In essence we have found ourselves on the defensive having to respond to claims which are often false.
The Extreme Summit seeks to transform the public’s perception of the HECM through various measures such as geo targeting areas of greatest opportunity, transforming media impressions to 3 positive stories for every negative one and rebranding the image of the reverse mortgage itself. This initiative is led by the National Reverse Mortgage Lenders Association and select industry leaders and the timing could not be better for such endeavor. The HECM program has been revamped addressing many concerns from consumer advocates, financial advisors are beginning to adopt the HECM into financial planning and the push away from needs based borrowers who may be at risk…
Download the video transcript here.
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2 Comments
The problem with the timing is that those whose coffers grew the most due to reverse mortgages are no longer with us: Financial Freedom, Bank of America, Seattle Mortgage, MetLife, and several others. For those HUD approved mortgagees who are relatively new to the industry the cash commitment to the Extreme Summit is weak. $2 million would not elect most candidates to the House of Representatives and yet the stakes are national, not just likely voters within a Congressional district.
Let us not kid ourselves, the revenues produced from Standby Reverse Mortgage originations and even full draws on this product are not what they were last year due to the first year disbursement limitation and the size of the new principal limits. Two publicly traded companies have announced losses for the first calendar quarter of 2014 and at least one announced that it saw eroded earnings and loss from its reverse mortgage operations during the last calendar quarter of 2013.
If only AAG and one or two other lenders find relative growth through this marketing campaign, do not expect strong support for the Extreme Summit for long. Hearing that the Extreme Summit is really not getting started except in a few markets months into the future, 2018 seems more like the year we will see 80,000 endorsements, not almost four times that amount.
While it is easy to “stir up the troops” as we saw at the NRMLA National Convention in late 2010 in cheering for 100,000 endorsements that fiscal year, living up to that goal with an inferior product and thus less access to our traditional market has not resulted in 100,000 endorsements in almost five fiscal years. In fact the endorsements for fiscal 2012 was not even half of the endorsements for fiscal 2009. Does anyone really “believe” we will see endorsements this fiscal even equal to the endorsements for our worst year (2012) in the last seven fiscal years.
With no truly deep pockets, much lower UPBs, and even lower endorsements with much fewer case number assignments, how will the Extreme Summit fare? It is hard to believe that a better crafted message alone will change the image of a much maligned product and origination force. Remember among influence leaders our image is for better or worse already burned into their thinking and perceptions. The question is will our new campaign appreciably change their thinking in the next four years or will there even be an Extreme Summit in four years?
Time will tell.
Launch of the public awareness campaign for reverse mortgage is highly appreciated. Not many people know that if you are at least 62 years old you can get monthly payments from bank for your home. And also you continue to live in your home till you are alive! One such an article at http://www.banks.com/articles/reverse-mortgages makes this point crystal clear. We need more coverage in print and TV media.