Forward on reverse: Marketing reverse mortgages 101--Education seniors and their advisorsAtare E. Agbamu, CRMSreverse mortgage, marketing, seniors, education
Earlier this year, I called the coordinator of a community
education program in the Twin Cities.
After introducing myself, I said, "I want to teach a reverse
mortgage course for your program." This seasoned community
educator, who has scheduled and directed instruction for hundreds
of courses over many years, paused for more than a minute.
"What is it?" she asked with genuine curiosity.
Before I answered her question, I asked whether she had run
mortgage courses in the past. She said she had. Since almost
everyone in America knows what a mortgage is, I said, "A reverse
mortgage is a mortgage where the lender makes payments to the
borrower." I got her full attention. Then, I went on to explain the
features and benefits of a reverse mortgage. She agreed to run my
reverse mortgage course.
As my conversation with the community educator showed, education
is the key to marketing reverse mortgages.
Almost 44 years since the first reverse mortgage in the U.S. was
originated in Portland, Maine, and nearly 16 years since Uncle Sam
invented the Home Equity Conversion Mortgage (HECM), the premier
reverse mortgage program in America, too many seniors and their
counselors are still asking "What is it?" when they hear "reverse
mortgage."
Those who have heard of reverse mortgages still hold many
misconceptions that keep them from looking deeper into these
beneficial and ingenious home loan programs for seniors 62 and
older. Examples of common misunderstandings include the
following:
The lender will take my house and I'll have no place to
live.
This is not true. The lender puts a lien on the house to secure the
loan. Your house belongs to you.
My heirs will be liable for whatever I owe beyond the value
of my home.
This is also untrue. The lender cannot look beyond your home's
value to satisfy the cash they loan you.
My home must be "free and clear" for me to qualify for
reverse mortgages.
No, it doesn't. People with existing mortgages can qualify for a
reverse mortgage. In fact, many seniors use reverse mortgages to
get rid of traditional forward mortgage payments.
The list of misinformation goes on. So, we must answer the
question, "What is it?" for every senior and correct the
misconceptions about these programs, especially for those who are
62 and older. Why? Because they are the decision-makers. Then, we
need to clarify it for their advisors because they have influence
with the bosses.
Experience and research have consistently shown that seniors
consult reliable personal or professional advisors before making
important financial decisions, such as taking out a reverse
mortgage. These confidants include children, grandchildren,
relatives, friends, accountants, bankers, mortgage brokers,
lawyers, doctors, social workers, geriatric care managers, pastors,
rabbis and even undertakers.
In part one of "Marketing Reverse Mortgages 101" (November
2004), we saw how otherwise educated financial professionals gave
out grossly uninformed advice on reverse mortgages to readers of
two well-regarded publications. We also saw how a seasoned Twin
Cities' mortgage broker led his own mother into what I believe is
an unsuitable HELOC because he did not fully grasp the cost-value
equation of a reverse mortgage versus a HELOC.
What should you do to move your reverse mortgage marketing a
step forward?
*Encourage seniors with whom you meet to introduce their
children, relatives and non-family advisors to you;
*With the senior's approval, include these "centers of influence"
in the reverse mortgage education process; and
*Educate seniors and their advisors.
When the subject turns to reverse mortgages, there are legions
of community educators, seniors and advisors across America still
asking, "What is it?" As reverse mortgage educators, our primary
job is to help them answer that question.
Let's think forward on reverse!
Atare E. Agbamu, CRMS is a reverse mortgage consultant with
Credo Mortgage in Twin Cities, Minn. Atare is widely regarded as an
emerging authority on reverse mortgages, and is frequently
consulted by financial professionals and families across America.
His reverse mortgage interviews have been webcast on MortgageMag
Live! Atare serves on the board of Little Brothers-Friends of the
Elderly in the Twin Cities and on the national board. In addition,
he is a trustee of The Little Brothers Foundation, serving on its
investment committee. He can be reached at (651) 389-1105 or e-mail
[email protected].
