A TURBULENT STOCK market and rising interest rates have dominated financial headlines in 2022, and both have impacted reverse mortgages. Higher interest rates have eaten into the once-booming refinance business for HECM originators, while a volatile stock market has spurred interest in exploring other sources of retirement income, such as home equity. The two trends could come together in 2023 to spur renewed interest in the traditional HECM. Seniors will see them as bulwarks to protect their retirement savings and as a means to keep up with inflation. Lenders will see them as a way to move on from a fizzling refinance business. It adds up to what Ed Robinson, president and chief operating officer of American Advisors Group (AAG), describes as “getting back to our knitting.” “We’ve got to get back to growing the industry,” says Robinson, who is hoping for an uptick in originations to new borrowers. The means to get there will include new approaches to marketing and help for brokers who want to refine their sales process. “The numbers won’t be huge out of the gate, but I do believe that we’ll be getting back to steady growth in new originations and a sales process that gets consumers off the fence.” Melissa Macerato, chief revenue and marketing officer for Longbridge Financial, says her New Jersey-based company has been seeing growth in the traditional HECM product in 2022 and expects that to continue into 2023. “While refinances were down significantly, we have seen real growth in our core HECM business with our focus on the true value and benefits of the product—a reminder that going back to the basics is often the best approach,” Macerato says. “Also, the addition of our new field sales channel in the second quarter helped keep our retail channel from seeing any real negative impact on Back to Basics Experts: HECMs Have New Appeal in Tough Market By Joel Berg Ed Robinson 20 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
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