With more than 600 loan officers operating in 10 states, C2 Financial is one of the nation’s biggest brokerages, raking in $2.4 billion in originations last year.
The majority of its LOs are in California, which does the most reverse mortgage business by far – triple the volume of Florida (No. 2) and Texas (No. 3) in 2017.
While C2 has had a reverse mortgage division for several years, it did not see much action until father-daughter duo Scott Harmes and Christina Harmes took over the channel.
For the past two years, the Harmeses have been focused on educating the C2 sales force on how they can incorporate HECMs into their portfolio of offerings. They established a four-course program to teach LOs, who then become C2 Reverse Certified Specialists, and created a platform to help guide LOs through the reverse origination process.
Scott said the original goal was to train 60 LOs, but they’ve surpassed that by more than double with 130 loan officers now C2 Reverse Certified.
“C2 brings on 10 to 15 originators a month, and we have an automated process for exposing them to the reverse division,” Scott said. “The opportunity is there for them if they want it.”
C2’s model relies on experienced loan officers, providing them with back-office support, lender access and pricing. They don’t hire newbies, so most loan officers have an average of 15 years or more of experience.
This means they have large spheres of influence, which is important for reverse mortgage origination, especially in today’s climate.
“As a result of the October changes with lower PLFs and lower revenues, the cost of acquisition per loan is a major challenge for a lot of companies. On top of that, the HECM-to-HECM refi market has shrunk drastically,” Scott said. “In the year prior to Oct. 2nd, 25% of all reverses in California were HECM-to-HECM refis.”
Scott said that meant that inexpensive marketing has become king.
“Strategies for marketing that have a high cost of acquisition per loan are not really viable,” he said.
That also meant that C2, which focuses on relationship marketing, was positioned nicely to claim a stake in the game.
“Our approach has always been education and grassroots marketing, leveraging existing relationships with expertise,” he said.
To help LOs use their networks to connect with HECM clients, C2 is promoting a webinar for financial planners, the first of which will take place this month.
Christina said the monthly webinars, which are worth CE credits for CFPs, will help LOs in their outreach efforts.
“It’s really going to open the door for the loan officer who has not known where to start with financial planners. It diminishes the fear of creating those referral partnerships,” she said. “We give them a step-by-step marketing plan on how to invite financial planners.”
Scott said so far, their efforts are paying off.
“C2’s reverse volume is growing. It’s four times as high as it was when we took over,” he said, adding that he expects to see a greater spike down the road.
“We’re just moving out of the education phase and into the action phase. The sales cycle is much longer than it is on the forward side, so were really just starting to see results.”
Scott said he expects the increase in proprietary reverse mortgage products, which accommodate higher home values, to help propel volume upward.
“We are in the best jumbo markets in the country, and I think in the year ahead what you’re going to see is an increasing penetration of that jumbo market, and this is going to be very important for the financial professionals we work with too. I think it will ultimately outweigh any negative impact from the Oct. 2 changes.”