There is one thing we can all count on when working in the reverse mortgage industry: change. In the 11 years that I have been in this business, not a year goes by where we haven’t experienced multiple changes, whether it is fundamental changes to our product, simple PL adjustments or huge changes, such as the looming Financial Assessment. Once we all accept that change is constant, we can focus on how we adapt in order to be successful. Let’s face it: If we don’t adapt to our changing market, we are faced with a future that leads to failure. We have a choice as an industry: We can be the next Netflix or we can be the next Blockbuster Video.
Over the last year, we have gone through two major changes to our offerings, both of which impacted the products we had to sell as well as how borrowers can access their funds. When both of these changes were announced, we were given a small window to learn the changes and how to properly communicate them to our borrower base. Since AAG has traditionally been a call center-based organization, we spent a great deal of time educating ourselves on the changes, the impact to the client and, most importantly, training our sales staff on how to sell in the new environment.
When the fixed Standard went away, the industry adjustment
back to the LIBOR-based ARM was pretty quick. At AAG, we focused our attention on the things that matter most to the client—not necessarily how much money they could get, but how that money could be applied to their current financial situation and help them achieve their financial goals. We focused on the foundation of reverse mortgages and what they were truly designed for, to help a senior age in place, using that as a starting point for all of our conversations with clients. Finding out what a potential client is hoping to accomplish with a reverse mortgage should be your No 1. priority. If you focus your attention on this and help them determine if the reverse mortgage is the proper tool to help them achieve those goals, many of the challenges we face with regard to product change and PL cuts become less daunting. Does a reverse mortgage make sense for the borrower? Once you can answer that question, you can properly communicate how it works and how it will help accomplish their goals.
Once utilization and MIP changes were announced, we were faced with another challenge. First, we had to eliminate a product option, and then we had to tell the borrower how much money they would be allowed to access and that it could be more expensive. I am sure many people wondered, “How am I supposed to sell that?” And I bet quite a few still do. The truth is, these were necessary changes to ensure the long-term viability of the product. As I have said to many people who think the reverse mortgage has lost value to the consumer, what other product do seniors have access to that utilizes the equity in their homes to help them in their retirement years while not requiring a monthly payment? What other product gives our client base the ability to have the money they need today to take care of their most pressing financial obligations, and more importantly, gives them access to more money in the future as they continue to own their home?
Consumers have options for their financial future that do not include a reverse mortgage, but there are still so many who could benefit tremendously from this product. Better yet, there are even more consumers who could benefit from the reverse mortgage but who discount it as a product for only the destitute. These are the clients we need to reach and help educate. Focus your energy and efforts on the value a reverse mortgage can provide to our seniors and not on what used to be. Remember, most people inquiring about a reverse mortgage are looking into it for a reason. The better you are at discovering their need and highlighting the real benefits of the product, the better you can sell in any environment. Don’t look at utilization as a negative; look at it as a way to ensure that a consumer has access to funds that they need both today and tomorrow. Don’t look at the increase in MIP on high utilization as a negative; look at the lower cost on the lower utilization as an opportunity to show seniors who don’t have significant mandatory obligations that a reverse mortgage can be an effective retirement tool.
Our industry has an opportunity to change the perception of the reverse mortgage through proper education and messaging if those of us who sell this tremendous product truly believe in its benefits. All of us have seen clients whose lives have been changed by taking out a reverse mortgage, and those changes are more than monetary; they are emotional. The less we focus on the money and the more we focus on the client’s need and goals, the more success we will have.
The key to selling anything successfully in the long term is believing in the product you are selling. If you believe that a reverse mortgage is an effective financial tool that can help today’s seniors accomplish their retirement goals, you are on your way. Selling is all about the psychology of the person promoting the product and the consumer considering a purchase. If you believe in the reverse mortgage and you present the product with excitement, they will feed off of your energy. Never make a reverse mortgage only about how much someone qualifies for; make it about how that money will improve their lives. When you marry those concepts, you navigate these changes and future changes better than most.