The lead generation business in the reverse mortgage industry has evolved over the last two decades. From being at the “option” status, it jumped up the “necessary” standing. The growing number of seniors and the recession that began in December of 2007 are two major forces behind the said change.
In the 2010 population survey of the U.S. Census Bureau, households with seniors ages 60 to 69 were pegged at 17.1 million. Of the said households, 13.8 million were considered owner-occupiers. Owner-occupiers are those who own and live in the property, which they own outright or have a small mortgage balance. For households with seniors in the age range of 70 to 79, the count was at 10.4 million with owner occupancy of 8.6 million. Given these figures, it makes sense for companies in reverse mortgage to capitalize on business strategies, which pave to sustainability. Lead generation is one of them.
In a credit-tight and slump-housing price era, reverse mortgage has become a healthy refuge for qualified consumers. It is a hassle-less approach for seniors to attain income security. In reverse mortgage, borrowers are not required to undergo income and credit verification and have monthly payments. The loan is paid by the remaining equity in the house when borrowers died.
Benefits of Reverse Mortgage Leads
Reverse mortgage leads are a collection or compilation of potential reverse mortgage clients. Its use made the identification process in customer search easier and less laborious. Essentially, reverse mortgage leads center on maximum utilization of information about the target clients compared and contrasted from Home Equity Conversion Mortgage (HECM) standards by the Federal Housing Administration (FHA). HECM enables qualified seniors to withdraw some of the equity in their houses. Reverse mortgage leads enable agents, lenders and brokers to access and synthesize effectively vast amounts of information and knowledge about this respective group.
It is important to note, however, that there are some lenders, which offer loans outside the FHA’s HECM. Unlike lenders, which offer loans under FHA’s HECM standards, these companies lose their federal insurance.
The strength of lead generation in reverse mortgage industry lies on its dual roles as:
(1) Excellent management and operations tool. Reverse mortgage leads allow organizations to capture all the fundamental information about customers and their housing-related transactions. The said information can give a real picture on the possibility of a senior taking in reverse mortgage. Also, the leads can be used to catalog, index, and cross-reference claims of “new leads”. For both approaches, the focus is on leads enabling agents, brokers and lenders organize, analyze and communicate the available data.
(2) Return-on-Investment (ROI) mover. In 2009, LendingTree with its affiliate GetSmart.com, joined small and medium enterprises in getting into the lead generation business in the reverse mortgage industry. LendingTree is known in forward mortgage industry. Keith Moore, senior vice president of emerging businesses at LendingTree, said the move was in response to their site visitors’ demands for the product. Also, in the same year, the U.S. Department of Housing and Urban Development (HUD) pegged the number of HECM loans made in the country at 114,692. The growing number of companies into reverse mortgage leads generation and the seniors taking in reverse mortgage are validations of the new frontier’s capability to generate ROI.
Leads That Deliver Results
After establishing the benefits of using leads in reverse mortgage, how then are lenders going to sort out quality leads provider from those, which are not? Below are some of the qualities of leads, which can deliver results:
(1) List of Qualified Seniors. At the very least, the list of reverse mortgage leads should contain a number of seniors ages 62 and over who are owner-occupiers. Always check the FHA’s HECM and/or the lender’s company guidelines on the matter.
(2) With Exclusive Clause. Reverse mortgage leads sold for use by a single client raises the chance of a lender to close a deal. Duplication for the use of multiple users does otherwise.
(3) Cost. The numerous companies competing in the lead generation business in reverse mortgage drive the service’s price down. So, interested parties should shop and compare and contrast provider’s services. They should make sense, which company offers value for their money.
References
Dymi, Amilda. “HECM Industry Fighting for Higher, ‘More Fair’, Lone Limit.” National Mortgage News (2 February 2009): 11.
National Reverse Mortgage Lenders Association (NRMLA). Annual HECM Production Chart 2010. Available from http://www.nrmlaonline.org/
Theis, Laura. “Simple60 looks to cash in on baby boomers.” Long Island Business News (9-15 November 2007): 21A.
U.S. Census Bureau. Age and Sex in the United States: 2010. Available from http://www.census.gov/population/
U.S. Department of Housing and Urban Development. FHA Reverse Mortgages (HECMs) for Consumers, 18 September 2011.
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