Why Personalization Is Important for Reverse Mortgage Borrowers



There are many nationally operating mortgage lenders who operate with successful wholesale lending models, some of which have the resources to advertise phone numbers connected to centralized call centers. In addition to providing high volume of loans, these companies can also be powerful sources of training for reverse mortgage borrowers across the country, even for those borrowers who may not be doing business with these larger lenders.

For many borrowers – especially seniors who may prefer easy access to a lender in their own backyard – the presence of a local business can be essential to take over their business. For those reverse mortgage lenders who specialize in providing local services, there is very little alternative to connecting with the borrower on a more personal level. In addition, forward loan professionals who are unfamiliar with reverse mortgage options should be aware of when a reverse mortgage would make more sense for an older client.

These are some of the points of view presented at a webinar hosted by RMD earlier this summer that focused on the local reverse mortgage business and how it differs from larger transactions.

Importance of a local approach for some borrowers

The educational value of large print ads or national TV commercials for the reverse mortgage product category should by no means be underestimated when talking about an industry that relies heavily on customer education. However, even if the lender had the most compelling publicity in the world, there are some borrowers who simply never get caught on a call center phone number. For these seniors, local contact is key, according to Jeff Foody, president of Northwest Reverse Mortgage, based in Clackamas, Oregon.

Jeff Foody

“The local presence is very important,” he says. “These are people who do not want to call call centers from California or Florida, they want to do business with someone from the local, they want to know that in case something goes wrong, they can go and knock on our office. doors and see someone’s face. It never happens, but at least they want to feel like they know they can. “

However, this goes beyond just being able to knock on the office door. This also applies to the simple preference for supporting local businesses, a principle that some borrowers simply cannot refuse.

“They want to know that they are doing business locally. Even though we know that appraisers are being dragged out of pools in the area, they want to know that they are working with people who are all local, this is a comfortable level for them, ”he explains. “I can’t tell you how many calls I get each week from people looking for information about reverse mortgages. They could call one or two of these big national companies, they had a DVD or information, and then they called us because we are local. I’d say we have tons of these [types of clients]because people prefer to deal with local feeling. “

The “ system ” of loan specialists for non-repayable loans

Rightly or wrongly, Foody said, some forward and backward lenders who operate on a less personal level than local practitioners can also create a perception in the borrower’s mind that they are pursuing business at all costs. As well-meaning initiators as banks, credit unions and lenders may be, some borrowers may have an image that is difficult for them to shake.

“When all you know is a hammer, everything looks like a nail,” he says of these perspectives. “And if all you know is a fixed term of 30 years, it looks like a fixed term of 30 years.”

However, there are some lenders even at the local level who may fall into this mindset, not because there is something wrong with them, but because they are also unaware of other options, including reverse mortgages, especially if all they are with familiar is the cutting edge of business.

“I worked with a local mortgage bank and set up a reverse mortgage department for this local mortgage bank,” says Foody. “I was with them for about eight years, and one of their top loan officers advised me to apply for a reverse mortgage for her parents. I walked in to meet them for the first time, and when I was trying to figure out the numbers and numbers, it turned out that this loan officer had just refinanced his parents into a 30-year deal about a year before. ”

Although Foody had worked at the bank for a long time up to this point, he asked the initiator of the forward why her parents were not transferred to him during the refinancing of the forward loan, and it was simply because she had never thought otherwise. up to this point.

“We have to educate them,” says Foody. “Many of these referral partners, part of their problem is that they don’t want to be the one offering a reverse mortgage to a client unless they feel comfortable and confident explaining what a reverse mortgage is. We all know that reverse mortgages still have a negative connotation among many people and they don’t feel comfortable telling people about it, and that’s our job. “

Education as a way forward and its meaning at the local level

Foody is adamant that these challenges can be overcome if the industry at all levels – but perhaps especially at the local level – devotes the time and effort to properly educating clients and referral partners on how reverse mortgages can apply to financial situations.

“The only way to overcome obstacles is through education,” he says. “So we have to go out and educate these potential referral partners. We have to have lunch and study at a bank or credit union, sit down and explain to them what a reverse mortgage is. You will inevitably change their understanding of what a reverse mortgage is if you can educate them and overcome the obstacles. “

Part of the right to report reverse mortgages, at least for Foody, is a result of specialization. As a practitioner in reverse mortgage who has never directly dealt with the traditional mortgage business, he knows that using this information will immediately notify borrowers or refresher students that he has a special commitment to the reverse space.

“As a company, we do not make traditional forward mortgages,” he said. “I’ve never done any, all I do is reverse mortgages. And for me this is my step: I say to banks, credit unions and other mortgage companies: “I do not do what you do, and you do not do what I do.” Let me help you do a reverse mortgage. If we do this and the valuation is low and I can’t get the reverse mortgage to work, I’ll give it back to you. ”

It helps these partners understand the value and potential power of specialization, Foodie said, as well as the potential benefits that reverse mortgages can offer to the client.


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