FOA President Kristen Sieffert talks 2023 challenges, giving reverse mortgages ‘a chance’

Sieffert sat down with HousingWire Editor-in-Chief Sarah Wheeler in a recent episode of the HousingWire Daily podcast

Finance of America Companies (FOA) President Kristen Sieffert sat down recently with Sarah Wheeler, Editor-in-Chief of HousingWire, to discuss the realities, challenges and opportunities for the reverse mortgage industry with 2024 on the immediate horizon.

Asked about challenges like the rate environment and generally reduced volume, Sieffert — who serves as a leader for the reverse mortgage industry’s top lender — explained how loan-to-value changes have made qualifying for a reverse mortgage a more difficult proposition for prospective borrowers on a recent episode of the HousingWire Daily podcast.

Reverse mortgage industry challenges in 2023

“There’s obviously been a drastic rise in rates that happened over a very short time horizon, and then we also had a change to the way floor rates work,” she said. “The outcome of both of those things together is that we’ve seen about a 20% decrease on the loan-to-value, [which is] obviously pretty impactful to borrowers who have an existing mortgage to pay off or who need to maximize their funds.”

Because of these developments, reverse mortgage borrowers qualify for far less than they would have in 2022, she said.

Kristen Sieffert, president of Finance of America Companies (FOA).
Kristen Sieffert

Despite those LTV challenges, however, inbound inquiries from prospective borrowers have not slowed at a comparative level, Sieffert explained.

“We’re seeing the same amount of inbound increase from our marketing engine, which is a really positive note,” she said. “The potential customers are there, they have a desire for the product, and the volume degradation we’ve seen in our industry is more tied to people being able to qualify because of that nuance with the rates and the LTV.”

The biggest challenges remain broadening the reverse mortgage industry, she explained. As others have noted, the key is not just increasing any one company’s share of the proverbial “pie,” but making the pie itself bigger.

“When you look at our industry as a whole, the industry’s tapped about 2% of the available market,” she said. “And that’s been [at] about the same level for years. I’ve been in this industry for almost 20 years and it’s not fluctuated much from there. So when we think about the challenges, there are a lot of things.”

Changing perceptions about reverse mortgages

Misperceptions about reverse mortgages continue to dominate perceptions of the product, both among potential borrowers and the general public, she said. This is naturally frustrating, Sieffert said, but there is also a reason she has continued to remain in the reverse mortgage business.

This is especially true due to the product’s changes over the past decade, but the challenge is worth it, she explained.

“I think it’s probably one of the main reasons I’m still in this industry, honestly,” she said. “It’s just this very worthy challenge because when we see the difference this product can make for our customers, it brings so much joy to our team. [We can] see the impact on the customers and hear these stories.”

The product category generally, Sieffert went on to say, needs more people to give it a chance.

“It’s just something that I think deserves to have a broader opportunity in the market,” she said. “And that’s our team’s main focus and goal.”

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