Why FAR Sees Private Products as Key to Reverse Mortgage Future

On the front lines of sales in the reverse mortgage industry, it can be hard to predict exactly where the business will go just because it’s based on so many moving parts. Not only do salespeople have to pay attention to trends and products that come from competitors, but they also have to be quickly reactive and representative of changes that are made by the United States federal government.

At the National Reverse Mortgage Lenders Association (NRMLA) Western Regional Meeting in Huntington Beach, Calif., RMD sat down with Sherry Apanay, Chief Development Officer of Finance of America Reverse, to get her take on today’s market: from the increasing prevalence of proprietary products to the growing frequency of second appraisals.

RMD: Volume seems to have hit a bit of a tough spot over the last year, but there are some general indications among some people who feel like volume may have turned a corner. What do you think about that? Do you think volume might’ve turned a corner?

Sherry Apanay: Well, just looking at the numbers that I see in the industry…it’s one of those things that’s hard to predict because it’s so cyclical. Every time [we reach this point] in the year, I feel like we’ve come out of the doldrums of the winter. People seem to start waking up and wanting to do loans. As far as timing goes, I do think we will see an uptick in loans, and we’ve already started to see that uptick.

But, whether or not we’ve actually turned a corner where we’ll see a big volume increase in HECM, I don’t know. I still think that we in the industry as a whole still have work to do in terms of how to reach our client. The changes that happened two years ago are forcing the industry to go after business, which we need to do. We need to work with financial advisors and real estate agents, and not just go after the most need-based client.

I think that we still have work to do to see an actual, real uptick in business.

RMD: What do you find most encouraging so far about the year’s start to business?

SA: Most encouraging for me is just the fact that there are so many options for borrowers. It’s not just a HECM or even just a jumbo, there are other financing options out there that are available to seniors. I think it’s really up to the salespeople to understand what all those options are, and if we can take the time to really connect with our borrowers by listening and hear what they’re saying.

And by that, I mean not just interjecting about a reverse if a customer says they have a problem. We really need to try and get down to the core of what’s holding them back, or what their need is. If we can do that, I think we’re going to win whether they get a reverse mortgage or not.

RMD: Obviously proprietary is a big talking point, especially here [at the NRMLA conference]. People seem to be really encouraged by it. Is the proprietary side of business at FAR meeting the lofty expectations that people seem to have for it so far in 2019?

SA: I think it’s certainly filling a void, and it’s giving loan officers the ability to branch out. So, if you’re focused only on HECM, it could look quite bleak, I think. But, having another option is really good. I think it’s good for the loan officer, and I think it’s good for the seniors, as well.

So, is it meeting the expectations? It probably all depends on your perspective. But, I do think that we’ve been blessed at our company to have been ahead of the market, so to speak, by having a jumbo out there, established before the need. So, I think that’s helped quite a bit.

RMD: What are you seeing in terms of second appraisals?

SA: I don’t work specifically on the ops side, but I do know internally that we’ve seen an uptick of late. And, from what I’ve been hearing, the industry at-large has been seeing the same thing. So, I’m not sure what’s driving that, because everyone wants to know what HUD’s ‘secret sauce’ is, or what prompts the second appraisal. Nobody can really make sense of it. But, we have seen an uptick, and I don’t know what that percentage is. Probably roughly 25 percent or more.

RMD: That’s roughly in-line with what we’ve been hearing.

SA: It was lower, like around 10-11 percent. So, it’s probably double that, I’d guess. I actually think it’s interesting to hear, because I think everybody was surprised. HUD’s data that led them to wanting a second appraisal was pretty compelling. So, I think it’s valid. Now, whether or not a second appraisal fixes their concerns is something else, but I think their concerns are valid.

RMD: I think that’s an attitude we’ve seen a lot of people have. It’s possible that it could help.

SA: We’d like a different solution, but we see the [presence of the] issue [in the industry].

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