The obstacle to HECM growth is our path forward
We’ve just finished coming off a two-year sugar rush, actually, a gold rush of accumulated home equity that surprisingly surged after the Coronavirus pandemic reached our shores. Americans were awash with newfound equity thanks to their swelling home value.
However, today we face an obstacle in our path to increasing the market share of reverse mortgages among age-eligible homeowners. That obstacle is getting more first-time HECM borrowers. Certainly, there are other obstacles on the path to engaging more first-time borrowers. Obstacles such as rising interest rates, fewer refinances of existing HECMs and stalling home values or even declines in some markets.
“The obstacle in the path becomes the path. Never forget, within every obstacle is an opportunity to improve our condition.”
– The Obstacle is the Way- Ryan Holiday
Usually, when we encounter an obstacle in our path we simply seek to find a way around it. But what if there isn’t? That brings to mind the story of the stone in the road.
Long ago there lived a good king who sought to teach his people to be industrious, fair, and strong. However, after years of abundance and wealth, they had become entitled and complained of the smallest of problems. One night the king placed a large boulder on the road that led to the city gates stopping all travel and commerce. He hid in the woods to watch. He witnessed many approach the stone and complain of the foolishness of whoever placed it there. Others criticized and some cursed the obstacle and turned away. Sometime later a humble shepherd approached the boulder. Unable to move it he thought for a moment pondering a solution. He used his staff and a smaller stone as a lever and was able to move the obstacle in the path revealing a bag of gold underneath and a note from the king.
The moral of the story is the obstacle is the way. It is the path forward. In fact, that’s the title of a book I recently read by Ryan Holiday, The Obstacle is the Way. Perhaps you’ve heard me mention his name or his blog the Daily Stoic in our Friday’s Food for Thought segments.
When it comes to increased reverse mortgage acceptance there’s no getting around the obstacle that we need more first-time borrowers whether it be for a HECM or proprietary reverse mortgage. That impediment will not be overcome merely by getting referrals from other professionals or increasing public educational classes. Our barrier to growth requires more workers, that is reverse mortgage originators going out and engaging with the public. Perhaps part of that expanded sales force will come from traditional mortgage professionals who are seeking new sources of business and revenue but more importantly seeking a less transactional mortgage market.
Looking back on our industry since the last of the big retail banks exited reverse mortgage lending, we see many successes and failures on our journey seeking growth. What those failures have done is show us the way by showing us what isn’t the path to growth. Our successes have shown us time and again how incredibly resilient and resourceful you, our reverse mortgage professionals, truly are.
Our first step to succeeding is to see clearly. Next is to act and then endure that which we find before us with tenacity and creativity.
Do we have obstacles in our path? Most certainly. But the obstacle is the way.