Forward on reverse: Insights for marketing to maturity: Part V: A different kind of customerAtare E. Agbamu, CRMSReverse mortgages,HECMs
Fourth anniversary note
This is the 48th consecutive installment of "Forward on Reverse."
My aim remains the same as it was four years ago—to help
originators prepare for the huge demographic changes ahead in
residential mortgage lending via reverse mortgage know-how. Reverse
mortgages are the only residential mortgage programs that address
the cash needs of older customers without tying them down to
regular monthly repayments, without putting their ownership rights
in danger because of defaults and without risking other assets or
leaving debts to their heirs because of reverse mortgages' no
recourse feature. Whether or not you plan to get into reverse
mortgages, you should know about these home loans and train your
home lending teams to be literate in them. It is essential.
In response to inquiries from readers and industry leaders, I
formed ThinkReverse LLC to continue the work we began here four
years ago. Our focus on helping mortgage originators manage
demographic change via reverse mortgage training and consulting
services was featured in Source Media's National Mortgage News,
Origination News and Home Equity Wire. A 68-year-old lady and
retired Wells Fargo personal banker, who used a reverse mortgage I
did for her to achieve financial security, was featured on NBC's
Today Show. We have coached and advised home lending teams at
Leader One Financial Corporation in Lenexa, Kan. and Nevada Federal
Credit Union in Las Vegas. We intend to be very busy with training
and consulting assignments in 2006.
From ample field experience and from responses to "Forward on
Reverse" readers across the country, I am convinced that every
residential mortgage originator in America needs to be reverse
ready. Why? Because there is a reverse mortgage in every mortgage
borrower's future! Every residential mortgage originator needs
reverse mortgage know-how to provide well-rounded professional
guidance in this new lending era.
Even our leaders in Congress are becoming increasingly aware of
the uncommon strengths of these innovative home loans. During a
December 2005 debate on the floor of the U.S. House of
Representatives, Rep. Michael G. Fitzpatrick of Pennsylvania
described the impact of reverse mortgages on the life of one of his
constituents:
"Listening to his stories, I realized that the house was more
than four walls and a roof. It was his life, it was his past and it
was his future. The reverse mortgage allowed Arthur [Gerald] to
stay in his home. He harnessed the power of this loan to achieve
financial security and independence and to preserve his
memories."1
If you are in the 21st century residential mortgage lending
business, you ought to gain a deeper understanding of the power of
this loan. You ought to find out how you can use it to move your
business forward. And, you ought to find out how you can use it to
gain competitive advantage in a market and culture dominated by
aging customers.
Thank you very much for reading "Forward on Reverse," for your
e-mails, for your phone calls and for your always instructive
questions, scenarios and inquiries. I have received many inquiries
about my upcoming book for originators and senior advisors. My
publisher and his staff are working very hard to get it out. It
should be out soon.
Excitement, activity and raw athletic energy filled the air at
the Metrodome in Minneapolis. Some were lacing their running shoes,
some were pinning bib numbers to their shirts or shorts, some were
stretching their muscles and others were just talking, pacing,
jogging, hugging and waiting. Many of the runners who gathered at
the home of the Minnesota Vikings on that chilly October morning
more than two years ago were gray or graying, like me.
"Why do we have a lot of middle-aged and older people here?" I
asked my neighbor and marathon mentor, Greg Doyle.
"I guess it is the whiff of mortality," said Greg in his amiable
and understated way.
"The whiff of mortality? What's that? What does it have to do
with being middle-aged and marathons?" Let's save these
questions.
In Part IV of this series ("A different kind of customer," The
Mortgage Press, January 2006), we concluded that basic human
development for entering adulthood with good prospects for a
successful life is the goal of the first 20 years of life (spring).
Play is the primal force during these years, influencing the
maturation of the young person. The aim of the next 20 years
(summer) is social and vocational growth; the desire to become
somebody in our vocation and in society is a strong influence on
behavior. Although we continue to grow socially and vocationally
during our summer years, by middle-age (fall), we begin to
experience what can be called "mid-course convulsion"—the
adult equivalent of the turbulent teenage years. The changes are
both physical and psychological. The physical changes are often
obvious: expanding midsections, receding hairlines and graying hair
are some physical evidence of middle-age. Psychological changes may
not be so obvious. They may include feelings of restlessness and
dissatisfaction with one's life, despite much professional and
social achievement. Thoughts along the following lines may run
through the mind: "What is the purpose of my life? Is this all
there is to life? If I die today, what will my obituary say about
my life?" This season of disquiet may lead to drastic events, such
as divorce, career change, relocation, spiritual quests, renewed
academic pursuits and other adventures, like running marathons,
climbing mountains and jumping out of airplanes (with parachutes,
of course!). Also, during this mid-life evaluation, individuals
generally begin to break free of peer influence in search of their
real selves. It is a time when the "pursuit of ambitions is being
moderated by the pursuit of balance," says author and marketing
guru David Wolfe.
"The 45-year-old's outlook on the world and himself has changed
dramatically from what it was at 25. He no longer views life from a
romantic perspective. Gone is the heroic notion that he can conquer
any challenge to which he puts his mind. From time to time, his
spirits are dampened by feelings that there must be more to life
than what he's getting out of it, even though he suffers no unmet
material needs, is financially secure, has many friends and is
ostensibly the master of his own destiny," wrote Wolfe in "Ageless
Marketing." Where social orientation is the general developmental
thrust of the first half of a customer's life, the emphasis is on
inner growth in the second half.
Wolfe wrote, "In the yearning for life balance and meaning, the
focus changes from becoming someone to being someone. The inner
self, long submerged by an outer world-directed agenda, aches for a
simpler life. The quest for life satisfaction in fall shifts
progressively away from a focus on things to a focus on
experiences."
There are always exceptions, but the general direction is toward
inner growth. Others have observed that attendance at churches,
temples, mosques and other houses of worship tends to be largely
middle-aged and older. The "whiff of mortality" (a.k.a. "the search
for meaning"), the realization that "life is short" is a truism and
that we had better make the most of every minute may be responsible
for bringing me, my neighbor and other graying runners to the
starting line of the Twin Cities Marathon at the Metrodome that
October. The journey toward a more human person continues into the
winter years, with reconciliation and a yearning for peace as the
leading life themes. Wolfe says that achieving reconciliation with
ourselves as well as others is essential for successful aging.
From Wolfe's four seasons of a consumer's life, we know that the
reverse mortgage market is in the winter years. We also know the
general mind of that market. In Part VI, we will look at eight
traits of the aging consumer and their implications for marketing
reverse mortgages. Because we are in a market and in a culture
dominated by aging customers, the lessons we draw from these eight
traits will apply to non-reverse mortgage marketing as well.
Think reverse. Move forward!
Footnote:
1. Congressional Record—U.S. House of Representatives, Dec.
14, 2005, H11586
Atare E. Agbamu, CRMS is president of ThinkReverse LLC, a
reverse mortgage training and consulting firm based in the Twin
Cities and is a consultant with Credo Mortgage. Atare is 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 Web cast on MortgageMag
Live! He can be reached by phone at (651) 389-1105 or e-mail
[email protected]
