Board Room Reverse Mortgages May Be the Winners in a Crisis By Kristen Sieffert OUR INDUSTRY IS no stranger to upheaval and volatility. If you are newer to the space, ask a veteran for a 20-year history lesson, and you might wonder how any of us are still standing. At Finance of America Reverse, our motto is “No matter what challenges we face, survival is not good enough.” Thriving is the goal. In order to make that a reality, we’ve had to cultivate a practice of always searching deeply for any silver linings. Admittedly that’s been a harder challenge of late. Yet, in searching for it, we see a tremendous push-and-pull opportunity that could be transformative for the industry. First is the push. Rising interest rates, inflation, stock market unpredictability, irrational housing prices and limited inventory have made people feel vulnerable and exposed. Retirees and those nearing retirement are wrestling with the reality that they may not have what they need to retire in the way they envisioned. This is driving more people to think beyond the traditional options about how to reduce risk in retirement, and a reverse mortgage can be a phenomenal tool to do just that. One study published by the Journal of Financial Planning in December 2021 found that a reverse mortgage can reduce risk of market volatility and protect wealth—two critical aspects of a successful retirement. Also pushing us is a slow but steady perception and sentiment shift around reverse mortgages. Major news outlets are helping to get the word out that these are no longer loans of last resort, and they can be invaluable tools for financial planning. The New York Times and The Wall Street Journal—two publications that haven’t exactly been friends to our industry—have recently written articles on new, favorable ways to think about reverse mortgages. This is a major win for the acceptance and legitimacy of the reverse mortgage industry. Retirees and financial advisers increasingly recognize that it’s shortsighted not to consider home equity products when assessing a retirement plan. Home equity, after all, is the one area that hasn’t been impacted by the downward pressures being felt in most other parts of the market. And now for the pull. The opportunity for our industry is there, but we have to take a hard look in the mirror at our shortcomings. While the positive outcomes for borrowers are undeniable, the challenges and stress of the entire customer journey are too persistent. We must prioritize producing amazing experiences for borrowers and their advisers at each step of their journey so we create evangelists and advocates. The loan is important, but the services before, during and after funding are just as crucial. I believe the biggest opportunity is to rethink the payoff process at maturity so the borrowers’ heirs—our next generation of potential customers—walk away with a positive experience about the loan and our industry. There’s no denying this year has been a challenging one, but overcoming these tests will make the outcome on the other side that much more rewarding. Current market forces are opening the doors to a growing acceptance of what we do and how we can help people retire with more joy, security and dignity. So, let’s use this moment as an unprecedented opportunity to wow every potential borrower we encounter. As Winston Churchill said, “Never let a good crisis go to waste.” Kristen Sieffert 6 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
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