How are reverse mortgages holding up?

Elissa Branch: Hello, HousingWire Daily listeners. My name is Elissa Branch and today, I am joined by Chris Clow, the editor of HousingWire’s latest acquisition, Reverse Mortgage Daily. Listeners, today, Chris will be talking to us about his work, Reverse Mortgage Daily, and what’s happening in the reverse mortgage space. But before we discuss your work in, you know, the reverse mortgage space, can you tell us a little bit about yourself and kind of how you got to where you are today?

Chris Clow: Sure, yeah. So I started as a professional writer, more in the entertainment arena. I was doing writing for a couple of independent websites before I got picked up by Fandango, which is owned by NBCUniversal and I wrote for them for a number of years. I went to a set visit on at least one occasion with them and wrote movie news and occasional reviews for other kinds of media. And eventually, I was living in Chicago at the time, I linked up with a local publisher of B2B Media in the market research industry, who served pretty much the entirety of the market research industry, which is also a little bit of a niche, which would go on to help me covering the reverse mortgage business. And I was with him for a few years before I needed to make a change in direction and that’s when I was initially hired by the previous owners of Reverse Mortgage Daily and that was in late 2018. And I’ve been behind the desk ever since.

Elissa Branch: Yes, that’s pretty cool. I think it’s pretty interesting how you’ve, like, moved from the entertainment industry to, like, the housing industry. It kind of seems like a big jump there but we’re glad to have you on the HousingWire team now.

Chris Clow: Well, thank you. I appreciate it.

Elissa Branch: Yeah, of course. So, you know, like I said, HousingWire recently announced the acquisition of Reverse Mortgage Daily, and you’ve joined the HousingWire editorial team. Now, can you tell us a little bit about your new role at HousingWire and kind of like what you’re, you know, aiming to do with your work?

Chris Clow: Yeah, absolutely. So Reverse Mortgage Daily, as a publication, was initially started back in 2007 by its founder John Yedinak, who’s also at the previous parent company, Aging Media Network. And really, what he set out to do when he founded RMD was to provide an industry-led news source that is solely dedicated to the prospects of reverse mortgages. It’s a comparatively small industry compared to the forward mortgage business as your listeners are likely well aware. So what we try to do on a regular basis is just try and give people who work in the reverse mortgage business information that they can use as well as keeping them up to date on any changes that take place that could affect the way that they do their work, so particularly since I’ve been behind the desk, RMD has been really focused on a lot of the changes that have been handed down by the Federal Housing Administration in relation to the reverse mortgage program or the home equity conversion mortgage program, as it’s called, the HECM program. But also too, we always try to keep up with new products that are introduced by the lenders and connecting with reverse mortgage loan officers to discover ways that they are exploring to try and connect with borrowers.

The reverse mortgage industry is all about trying to grow the proverbial pie of people that it serves. And considering the demographic shifts that are taking place across the country, the “silver tsunami” that you have 10,000 people turning 65 every day, there’s a significant amount of potential for the reverse mortgage business that it has yet to really meet but particularly over the last year, the COVID-19 pandemic seemed to increase a lot of people’s interest in at least exploring the possibility of a reverse mortgage. So before the acquisition and now, since the acquisition, we’re really gonna be focused on giving people the lay of the land about what’s important in the industry. But now that we’re a part of the HW media team and the larger HousingWire family, we potentially have more resources to meet an entirely new segment of the mortgage audience and hopefully, introduce them to concepts that they may not have been familiar with before.

Elissa Branch: On the topic of, you know, what you kind of aim to do, what you did at Reverse Mortgage and also at HousingWire, currently, what kinds of stories are you working on hoping to publish? Is there anything like now that you would want to talk, like, about briefly to kind of tease for our listeners or anything in that kind of realm?

Chris Clow: Sure. Well, the most immediate thing at the moment is that we’re recording this a few days before the next virtual conference from the National Reverse Mortgage Lenders Association takes place. There’s a lot of movers and shakers in the reverse mortgage industry that participates in the preeminent reverse mortgage trade association’s event. Since 2020, those events have had to transition to a virtual format, for obvious reasons. There’s a lot of other trade association events we’ve had to and industry events we’ve had to do. But there are going to be a fair amount of speakers at that event that are focused on the business side of things as well as the government side. So that’s really a good way to take the pulse of what’s happening in the reverse mortgage industry and I’m looking forward to providing information about that event to our readers.

In terms of other things, we’re really starting to develop how we can best utilize the additional resources that we have as a part of the HW Media network. We’re starting to have conversations about our own podcast that we’re going to be continuing as well as the future of what RMD is going to look like. It’s still a little bit in flux because we’re in the early days yet but everybody in the HousingWire team is really excited about bringing RMD aboard. They’ve been very gracious to me, in introducing me as a part of the team. And I’m looking forward to seeing what’s next, basically. This is a very exciting time and hopefully, it’s going to be something that the reverse mortgage industry will potentially benefit from as well, just in terms of adding some additional familiarity of the subject matter to the larger mortgage world.

Elissa Branch: For sure. I’ve been able to, like, see how, you know, you’ve interacted with the editorial team. You know, it’s really good having one and then, you’re able to, like, you know, see what kind of expertise you bring to the team. I think that’s really great. And also, I’m quite excited, anything podcast-related, I’m very excited to see and hear more about that, so very exciting. But Chris, you obviously know a lot about reverse mortgages. And kind of setting back from, like, your own personal work, what can you tell us and our listeners kind of what is happening in the reverse mortgage space and what kind of things our listeners should be, you know, looking out for whenever they’re reading about this kind of stuff?

Chris Clow: Yeah, well, some of the focus of our relatively recent coverage has just been that the industry has seen a heightened level of activity over the past several months going back into last year. There was an explosion in reverse mortgage endorsements in May of last year and the heightened business that we’ve seen since then, it’s kind of hit some peaks and valleys but it’s still reasonably high. But one thing that some people that are concerned about the reverse mortgage industry are starting to see is that there’s a fair amount of business that’s being done in terms of refinances and some of the analysts that I’ve spoken to over the past several months see that as a concern because the reverse mortgage industry at large is one that tries to appeal to as many new people as possible and inherently when you’re going to a refinance transaction, you are dipping back into the proverbial well. You are going to a bar where that has been served by the business before. But it’s also natural to see why that was the case. The mortgage rate environment, we’ve seen historically low rates over the past year. And that has also translated into lower reverse mortgage rates which potentially gives more agreeable terms to borrowers. So it’s not surprising to see, but I think you have a fair amount of people in the reverse mortgage business who are, if not outright concerned, there’s a shadow of concern that’s starting to develop based on the amount of refinance volume that has been taking place, so you’re starting to see some conversations around how to bring new borrowers into the fold once again.

And the rollout of new products, particularly on the proprietary side, proprietary reverse mortgages, for a while, they started to explode a couple of years ago in terms of lenders introducing new product formats into the mix. There were a fair amount of people that I’ve spoken with over the last couple of years that have seen proprietary reverse mortgages as a potentially saving grace for the industry to try and increase the penetration rate in comparison to the forward side. We’ll have to see over the next several months if some additional proprietary products are going to be introduced but right now, it seems like, you know, people are a little concerned about refis, not overly concerned but a little bit, and new product development is most definitely something that is on the mind of people as is connecting with academics and financial planners. On the academic side and from financial planners, you’re starting to see some more general acceptance of the reverse mortgage product category. Mitigating sequence of returns risk is something that a lot of financial planners recommend and you’re starting to see more of them, see that you can tap a reverse mortgage line of credit when the stock market goes down. And that’s something that is becoming a bigger point of interest, particularly over the last one to two years.

Elissa Branch: The housing market, you know, you kind of touched on, is still in the middle of a pretty tumultuous time, just in general. So, I’m curious to see more about how this is reflected specifically in reverse mortgages. In your opinion, how, currently, is the reverse mortgage sector, like, faring in relation to the rest of the market with everything that’s going on?

Chris Clow: In comparison with the rest of the market, I think reverse mortgages are doing reasonably well. It remains to be seen whether or not the industry will be affected by the kind of fluctuating levels of inventory that are out there. Usually, reverse mortgages aren’t, because you’re dealing with people who are already homeowners, who are potentially trying to age in place and facilitate a more efficient form of retirement financing for the people that it works for. But there is an increasing segment of reverse mortgage business, but it’s still in single-digit penetration even within the reverse mortgage business itself in terms of reverse mortgages for purchase, so you actually use a reverse mortgage to facilitate the purchase of a new home. That is probably where the most potential exists for the sort of macro view of the housing market to affect the reverse mortgage business. Although we haven’t seen that as of yet, I’ve devoted some, covered relatively recently to reverse mortgages for purchase, and it seems to be a largely untapped concept. There are pockets of loan officers in certain parts of the country who swear by reverse mortgages for purchase and where it’s starting to become a bigger portion of their business. But we’re still at very low penetration rates in terms of the entirety of the reverse mortgage industry. But I have a suspicion that reverse mortgages for purchase are gonna become more important in the next several years. But time will tell. It’s gonna be a topic of conversation at the conference next week that I’m looking forward to listening in on but other than that, I’m gonna be keeping a pretty close eye on it.

Elissa Branch: Thanks for sharing some insight on that. I feel like most of the coverage I’ve seen in the past week has had a lot to do with inventory levels and so, it’s nice to get some more insight on, you know, how other parts of the market are, you know, still working. But before we go, is there anything else you would like to share with our listeners about you, you know, your position, or just like the reverse mortgage space in general?

Chris Clow: Sure. Yeah, I appreciate the chance to connect with you, and with the listeners, and with just the larger HousingWire organization. Like I said before, we’re still in the early days in terms of what this acquisition is going to mean for Reverse Mortgage Daily specifically, but we’re very excited about the possibilities. And hopefully, we’re going to be able to serve the larger housing market audience that HousingWire serves on a regular basis. And we’re looking forward to potentially bringing more people into the fold and teaching them about the intricacies but also, the potential possibilities of what a reverse mortgage can represent for the people that it could fit for. If there’s a common refrain that I hear across the industry, it is that this is not a product that works for everybody. But the people that it can work for, can potentially make a difference. And that’s why it’s probably worthy of at least consideration, even if someone doesn’t end up going through with it, that possibility is something that, I think, a lot of people find interesting. And, you know, with Reverse Mortgage Daily as a part of HousingWire, hopefully, we can illuminate what has generally been an often-overlooked component of the mortgage industry. And I’m looking forward to seeing how that unfolds over the next several weeks and months.

Elissa Branch: Thank you so much, Chris. It was very much a pleasure to talk to you and kind of get to know more about you and your position in reverse mortgage space.

Chris Clow: Likewise. Thank you very much. I appreciate it.

Elissa Branch: Of course. Listeners, join us back here next week for more HousingWire Daily.