Late this week the Senior Lending Network announced it was changing its direction of its wholesale channel to concentrate on a specific market niche and is no longer interested in high volume and low touch business in this economy.  As part of the new direction, the company was forced to lay off some of its employees. 

According to an email from the SLN,

The corporation had a less than 10% reduction in its total workforce and is still a significant employer in Melville, NY and Troy, MI. The workforce changes were due in part to our new technology that allowed us to be more efficient in areas such as loan data input, closing and post-closing and a new business strategy for the wholesale division which required that we adjusted our work force based on new volume targets.

Going forward, the wholesale channel will be concentrating on a specific market niche and is no longer interested in high volume and low touch business in this economy. We are going back to our core business strategy which is selecting and working with a limited number of partners who wish to use our brand and receive high levels of customer service not only on the loan processing side but in terms of marketing support, business planning and individualized sales training.

When I followed up to get more information on the new Partner Program I was able to ask a few questions to David Peskin, the CEO of the Senior Lending Network.  Below is the transcript which goes into more detail about the companies new direction.

Q: In an interview we did at NRMLA, you talked about getting back to the basics and doing what you do well.  Is this part of that transition?

When we first began our wholesale business, we had a very specific value proposition. We were selecting wholesale partners that wanted to benefit from our products but also committed to leveraging our marketing and training platforms. The Senior Lending Network and Robert Wagner are the leading identifiers of the reverse mortgage industry and we wanted our wholesale partners to benefit from the brand that we spent millions of dollars building.

In 2008 we began to deviate from our core strategy and focused on volume. In order to do a securitization, volume is essential and at the time we were committed to increasing our volume since there was a robust secondary market. We took on many new partners who were looking to access our aggressive pricing and innovative product line regardless of their marketing needs. We were working with so many clients that it became difficult to provide them the expertise and tools we were known for.

As a company, we did not get as much satisfaction by being everything to everyone – we missed having the ability to provide our clients with a holistic service platform. Plus, the state of the economy spurred a decision to migrate back to a proven business model. With only one take out for reverse mortgages right now the industry is becoming commoditized and too risky for high volume.

We view 2009 as the “year of the brand”. We have redefined our business strategy and are selecting partners that want to leverage our marketing. We pass on a great deal of industry knowledge, experience and tips that we learned over the last few years to our wholesale partners…which is a true benefit to our clients. We have a sense of pride and accomplishment in the work we have done with clients that not only used our wholesale platform but all of our training and marketing expertise. Our true niche in the wholesale space is nurturing and growing companies using our vast training and marketing resources.

Q: While being smaller than the MetLife’s, Wells Fargo, Bank of America’s has its advantages; most brokers can’t compete with the branding and amount of money they spend on marketing.  Is the new partner program meant to help with that by using the SLN?

Our new Senior Lending Network Partners is an exciting opportunity for a small to mid sized company to benefit from the credibility and trust that a large national brand brings without breaking the bank.

We have spent tens of millions building this brand and through our selection process we will offer select brokers the opportunity to have full access to our brand. The Partners program is a marketing concept and will be available to candidates that meet selection criteria:

• A company in growth mode with a good business plan and commitment to marketing
• Treats customers ethically and not a potential threat to discrediting the brand
• A company experienced in originating and processing reverse mortgages and submits quality business

We are making it easier for a broker to compete with the big consumer brands like Wells Fargo and Bank of America.

We had an independent consumer opinion study done about brand perception and Robert Wagner and here are some consumer testimonials:

“I had seen other ads, but I thought Robert Wagner wouldn’t steer us wrong. So it was the ad on TV and seeing it repeatedly”

“I saw it on TV and I trust Robert Wagner.”

“I saw them on TV with Robert Wagner. People respect him.”

“In my age group there is a basic confidence that we have in Robert Wagner. He got my attention.”

We want our customers to benefit from what we built. The brand access is a win-win for any company competing for market share but does not have the budget or the infrastructure to have a national presence.

Q: Before the partner program, brokers had access to marketing materials from you, are the new tools different than before?

In the past, we developed basic materials for brokers to use with a “member of the Senior Lending Network” insignia…plus, they had the option to purchase leads if available. What truly differentiates this program from the past is the depth and scope of the marketing materials that are available.

The material library will consist of the following tools for those eligible for the Partner program:

• Radio Ad
• Print Ad
• Press Releases for local distribution
• Web site landing pages and banner ads
• Series of Direct mail postcards and letters (we will facilitate the mailing and list management process as well)
• SLN DVD for use with self-generated leads
• Suite of collateral to use with consumer:
  • Needs brochure
  • Caregiver brochure
  • HECM for Home Purchase Program Marketing Kit (plus a realtor / builder networking guide)
  • What you should know about a fixed-rate HECM? Brochure
  • Office posters and other signage
  • Private label lead campaign
  • Appointment set leads
  • SLN Branded Event Seminar program

Q: One of the obstacles I see is that by leveraging the SLN brand too much, does that drive retail business to you vs. their company?

That is a great question and excellent point. All of the collateral available under the program contains both the broker’s logo as well as the Senior Lending Network logo. The Senior Lending Network logo should be thought of as a designation and the partner that uses our collateral has undergone thorough screening in order to represent themselves as a member of our program. This designation should bring added credibility when sitting down with a customer. Dell markets the “Intel Inside” concept to help sell their computers and we feel our brand does the same, help brokers sell reverse mortgages with a trust factor and awareness built in.