Hello, my name is Richard and I am a reverse mortgage originator.
I am borrowing this introduction style from Alcoholics Anonymous because we in the reverse mortgage industry must accept that we have a perception problem, and that we have to take ownership of this problem in order to correct it.
We have all heard many damaging, erroneous beliefs that feed the negative perceptions people have about the reverse mortgage industry. Former General Electric CEO Jack Welch appropriately summarized the importance of public perception in a letter to The Wall Street Journal: “One thing I learned during my years as a CEO is that perception matters. And in times when public confidence and trust have been shaken, I’ve learned the hard way that perception matters more than ever.”
Here’s a list of some of the most prevalent misconceptions about reverse mortgages:
ONE// You are giving your home away if you take a reverse mortgage.
TWO// The reverse mortgage industry preys on the elderly.
THREE// The reverse mortgage company is just trying to steal your home.
FOUR// The reverse mortgage is a niche product and only to be used as a last resort.
FIVE// Only financially troubled seniors should use the reverse mortgage.
SIX// Reverse mortgage originators, especially brokers, cannot be trusted to give accurate advice and information to seniors. They are only after the commission and they are not concerned about the needs of the seniors.
SEVEN// Reverse mortgages are expensive.
EIGHT// Reverse mortgage originators are scam artists.
Unfortunately, some influential people in Congress, the CFPB, state regulatory agencies, consumer groups and even consumers themselves have cultivated and spread these negative perceptions about the reverse mortgage industry. NRMLA and other industry leaders have worked tirelessly to promote the positive aspects of the program and refute these ideas. They have developed programs to educate consumers and reverse mortgage specialists alike. NRMLA has crafted ethical lending practices for its members and demands that they be followed.
There are many positive indicators that point to potential growth for the industry, including but not limited to: slowly rising home prices, low interest rates, a growing potential client base and increasing acceptance by financial planners. But despite all of this effort, significant, inaccurate and negative perceptions persist, and if they are allowed to continue they will seriously impede the growth of our industry.
There is no easy solution to our problem. The most damaging misperceptions are the ones that attack the integrity of the program and the people who work in the industry. Unfortunately, those perceptions are the hardest ones to change. My purpose in writing this article is to get the people working in the trenches to start talking about this problem. I want individuals to share their thoughts with others about what we can do as reverse professionals to overcome, or at least mitigate, the effects of these misperceptions. I am offering the following suggestions and observations as a starting point for what will hopefully become an ongoing discussion.
ENCOURAGE PEOPLE TO JOIN AND SUPPORT NRMLA NRMLA is well aware of this problem and is gearing up for an extensive publicity campaign and other initiatives to set the record straight. We need to lend our support to NRMLA. The more people who join and work with the association, the stronger it becomes.
INDIVIDUALS WORKING IN THE INDUSTRY NEED TO TAKE ACTION NRMLA, although essential to the industry, cannot resolve the problem by itself. We are the ones in the kitchen fielding skeptical questions from the borrower’s children. We are the ones engaged in long discussions with the borrower concerning an integrated retirement plan. We have acquired relevant insights over the years that will hopefully assist us in overcoming the negative stereotypes. Some people believe that it is naïve to think that individuals can significantly change the negative perceptions. I disagree. I believe that individual actions, coupled with our association’s extensive national program, will garner the best results.
ACT LOCALLY Our individual actions will be much more effective if they occur in the communities in which we work and live. Some of you may not like his politics, but President Obama organized a dazzling community-by-community grassroots campaign that built the foundation of his successful national campaign. We can learn from that.
TELL PEOPLE ABOUT YOUR WORK IN THE COMMUNITY AND YOUR ACHIEVEMENTS To overcome these negative perceptions, you need to create awareness that these misconceptions are far from reality. If people in the community are suspicious of you and reverse mortgages, working in an ethical and professional manner may not be sufficient. People you hope to be working with want to know you are ethical and professional. One of the easiest ways to accomplish this is to tell people what you have done in the community. I know this sounds simple, but for numerous people it will be extremely hard. For many, performing charitable acts is a very private and personal action that they believe should not be made public; they believe that making your charitable acts public demeans the acts themselves. Others think it is naïve to believe that making your civic awards and charitable actions public will assist in correcting misperceptions about reverse mortgages and the individuals who work in the industry. I disagree. We work in an industry that is incorrectly judged as harmful to seniors. Our personal integrity is being questioned. We need to get out of our comfort zones and announce our good works to the community. We need to put a human face on our industry.
I recently received an award from the Baltimore Bar Association’s Senior Legal Service for Volunteer of the Year. I did not do all the hard work for recognition. I did it because I believed it was the right thing to do. Previously, I have tended to keep my charitable and civic work to myself and my family. Not anymore. I now tell people about my work in the community. It works. It helps break down suspicions about you and the product you are selling.
WE MUST BE EFFECTIVE ADVOCATES FOR THE HECM PROGRAM. WE MUST PRESENT OUR STORY ABOUT REVERSE MORTGAGES TO PEOPLE IN OUR COMMUNITY Mr. Bart Johnson, a prominent individual involved in the development of the reverse mortgage program, told me, “Reverse mortgages present an easy target. After all, who doesn’t want to help and protect seniors? But our industry is as much an advocate as a business, and we have to tell our story rather than just responding to theirs. We must play offense as well as defense. NRMLA has effectively undertaken the challenge. We are making progress, but it will take time.” I believe that in addition to joining NRMLA’s mission, we as individuals have to be effective advocates of our program. One way to do this is to gather positive, real-life stories from our clients. Get it in their words, do not write it for them. Then distribute these positive reverse mortgage stories throughout your business community. Post them on your website, send them to neighborhood newspapers or radio stations. I emphasize that we as individuals can be much more effective by sticking to a positive message and accentuating the positive benefits our clients have received.
Talk to your friends in the business. Share your ideas. Take action. Send your suggestions and comments to The Reverse Review. Let’s all get involved and discuss ways that we can help redefine our public image.