Out with the old, in with the new.” We have all heard that phrase before, most often around the New Year as we make a pledge to eat better, exercise more or finally quit that pesky habit. “Turn over a new leaf” is another one, and both could be used to describe what many of us are experiencing as we try to navigate our way through the changing reverse mortgage market. Sure, it may seem like we have experienced nothing but change since the program’s inception, but this time the changes have given rise to a new product (or, as I like to say, a new solution) for those facing retirement. Winston Churchill may have said it best: “To improve is to change; to be perfect is to change often.” Well, we are certainly changing often, and hopefully it will lead to a perfect solution for many retired Americans.

All that being said, can we simply blame low industry volumes on product change? Personally, I think not, because after all, how many consumers know about these changes and are therefore not inquiring about the product? Or better yet, how many are inquiring but are not able to qualify now due to lower principal limit factors? In my experience, not enough to account for the substantial dip in volume.

Maybe the problem is that we have too many things changing at once, creating what one might call a perfect storm. After all, not only has the product changed, but the prospects have also changed, the message has changed, the referral partners have changed and our top industry leaders have changed—all within the last 24 months.

Last week I met with a nice couple in their late 70s who owned their home free and clear.  Their daughter was at the house and they asked if I would come and meet with the three of them. Many of us have experienced this exact scenario and I am always pleased when the adult children want to be involved in the discussion. As you might expect, I was asked to have a seat at the kitchen table and a minute didn’t pass before I was asked if I would like some tea or water. We had a great talk and all parties left the consultation feeling confident that this was the exact solution for them. They could now afford to replace the HVAC and the roof, and they would have the funds to bring services into the home as they aged and their needs changed. As I was driving back to the office, I had a moment to reflect and realized quickly that the days of sitting around the kitchen table “planning” to age in place and using a HECM to achieve that goal are numbered. Our prospects have changed. Now, our consultations are more likely to start and finish with, “Email me something.”

Our message has also changed. When I started in this industry more than seven years ago, we used phrases such as “low cash flow,” “challenges paying your mortgage” and “loss of income” to describe someone who might be a good candidate. Today, and certainly as Financial Assessment comes into play, our message is much different. I’m not placing blame on anyone and I’m certainly not suggesting we need to service only the needs-based, but our message now is primarily, “The HECM is a planning tool.” Many who hear our message feel it isn’t for them because maybe they’re not struggling enough financially at the moment. Sure, we may see them down the road, but will we be able to help them then?

Another change to the program is the people with whom we are trying to align ourselves. While many of us have always worked on building relationships with financial planners, the HECM was mainly a loan of last resort in the past and not something we necessarily built into a client’s overall retirement picture. With the help of recent academic research the tide seems to be turning, but we still have a long way to go. While the financial planning community might not be a totally new referral base, the manner in which we are currently positioning our solution is. It has been my experience that this group likes controlling the conversation with their clients and protecting them, which is understandable, but can you imagine a HECM proposal being presented by someone just reviewing a comparison or amortization for the first time? What if you aren’t in the meeting or a part of the conversation and the advisor immediately gets objections or pushback and you can’t confidently address the client’s concerns? Do you think they will bring up the subject again? Of course not. So we have to get into these conversations and not sell the client but educate them, or just be there to answer their questions. Realtors are also part of the mix now, and once again it becomes an educational mission for all of us to evangelize the H4P and how it can have a major impact on those looking to downsize or move closer to family.

Lastly, our industry has experienced a change of the guard at the top. We are all familiar with the exits of Bank of America, Wells Fargo and MetLife, not to mention Financial Freedom, but how big of an impact those exits would have was, in my opinion, downplayed by many originators. It was nice to pick up some of the volume once they started bowing out, but now those leads have dried up and the overall awareness they collectively brought to the industry has dissipated. Sure, the industry still has a TV presence, but we no longer have a nationwide branch presence by two major banking institutions and a well-known and respected insurance giant. I believe this has also impacted our volume.

So what does all of this mean for us, the originators, who are in the field all day planting seeds? Will they finally sprout and will we be here to harvest? I say yes! Many of us were in this industry before the major national banks and insurance companies entered the space, and we are still here today. So now is the time for us to embrace the many changes and hopefully, to paraphrase Churchill, our constant evolution will lead to perfection.