An important component of the modern reverse mortgage industry is educating on the modern iteration of the Home Equity Conversion Mortgage (HECM) or its proprietary alternatives, and recruiting new people to join the industry. on the side of origination or brokers. It can be difficult to know exactly where to start for those who can see the potential benefits of adding a reverse mortgage offer to their product catalog.
It is also important to know the current situation of the elderly and how a reverse mortgage can be well suited to help a senior looking for extra cash in their later years. That’s according to Jim McMinn, head of sales training at Longbridge Financial at the National Reverse Mortgage Lenders Association (NRMLA) virtual annual meeting earlier this month.
McMinn, who has been in the reverse mortgage business since 2002, explained the current retirement landscape in the United States and how it contributes to a situation where a senior may find a reverse mortgage advantageous. The search for a viable reverse mortgage advance can be made or canceled by understanding the plight of all American seniors.
The current retirement landscape: pro-industry
Much of the confidence that many people in the reverse mortgage industry have in the industry’s prospects for the future centers on favorable demographics. According to the non-partisan research organization Population Reference Bureau (PRB), the share of older Americans who make up the country’s total population is set to increase dramatically, coupled with other trends, including the increase in longer lifespans and careers for older Americans, says McMinn. .
“The number of Americans 65 and over is expected to almost double, from 52 million in 2018 to 95 million in 2016,” McMinn said based on PRB data. “We know there are about 11,000 baby boomers turning 62 every day, which really increases our overall market. Seniors are working longer, but in 2018, 24% of men and about 16% of women 65 and over were in the labor force. These levels are expected to increase further in 2026 to around 26% for men and 18% for women. “
In 1950, the average life expectancy of an American was 68 years, and it has risen to 79.8 years today, McMinn says. Part of this is attributed to a reduction in mortality due to the improved quality of medical care that has emerged over the past seven decades. Yet it also creates problems for many long-held notions of retirement funding, he says.
Don’t underestimate the power of your words
Being integrated into the industry often comes with a great deal of first-hand knowledge of the potential benefits that a reverse mortgage can offer an eligible borrower, but as most industry participants know, reputation issues die hard. . Still, professionals shouldn’t underestimate the impact of their words when talking about the potential benefits that might exist for the right client, McMinn says.
“One of the great things is to speak, to speak, to speak,” he says. “Word of mouth is essential. I have traveled a lot in my career and have taken many air trips to different places. Inevitably, someone would ask me what I do for a living and I would tell them [I work with] reverse mortgages. People would say to me: “This is a terrible business! When I tried to break up with them and ask them why [they thought that way], this is usually because they had a friend of a neighbor whose sister took out a reverse mortgage and lost the house.
However, delving into the details of these scenarios would often reveal that a reverse mortgage probably wasn’t the culprit, McMinn says.
“Either it wasn’t a reverse mortgage or they had the material or information all wrong,” he says. “And so, talking to people, interacting, letting them know and dispelling all of these myths is going to really do a lot for our industry.”
Particularly for people who are new to the business or trying to find a way to access it, the importance of finding trusted advisors for people in the reverse mortgage demographic may not be immediately obvious. , McMinn said. As reputational barriers have tested the reverse mortgage industry, borrowers often seek trusted voices within their spheres of influence or the local business community to ensure that reverse mortgages are safe.
“Whether you’re talking to financial planners, CPAs, builders, real estate agents, or senior lawyers, these are people you should build a relationship with,” he says. “Be there at local events so people understand that you are the person doing reverse mortgages. “
This visibility also lends itself to the idea of getting involved in community organizations, which accomplish the missions of adding the necessary credibility to a reverse mortgage business as well as connecting with potential referral partners who may try to find ways to deliver services that can help seniors, says McMinn.
“It’s a great way to get involved,” he says. “There are like-minded people out there who are looking to do the same thing that you are looking to do. Finding a mate is also important, and what I love about it is finding other people with a similar mindset. These are people who are looking for business opportunities, who are looking to help the elderly. You can partner up, join efforts, and then provide resources to seniors.
Such partnerships can also extend beyond reverse mortgages, he says. Information that will be useful to older people can be difficult to find. Therefore, getting involved with people or organizations that often try to find holistic solutions focused on seniors can be a great place to sit, says McMinn. This fuels a potentially successful marketing approach that encourages holistic action.
“I say use a systematic approach to your marketing,” explains McMinn. “Make sure you’re working from all angles, establishing a reverse mortgage presence, and becoming the reverse mortgage industry expert in your community. “