Reverse mortgage originators on the referral opportunities they’re watching in 2024

Reverse mortgage

Opportunity in the current mortgage market may be challenging to find — and that could arguably be truer for those who offer reverse mortgage products for clients. Still, reverse mortgage professionals are always keeping their eyes peeled, and a group of them shared what they’re looking out for in 2024 for their businesses.

To get the lay of the land, RMD spoke to front-line reverse mortgage originators Jim Cullen in Green Bay, Wisconsin; David Heilman in Mount Pleasant, South Carolina; and Bruce Simmons in Denver.

Each professional already said that business is off to a promising start in 2024, but maintaining that momentum will be dependent on their individual skills, referral partnerships and borrower outreach, they said.

Wisconsin: No proprietary but plenty of opportunity

Cullen, who works at University Bank, explained that while he occasionally gets business opportunities from outside Wisconsin, he prefers to remain within his home state since he likes to conduct business face to face as much as possible. While he only has access to the Federal Housing Administration (FHA)-sponsored Home Equity Conversion Mortgage (HECM) product, that doesn’t dampen the possibilities.

“Wisconsin is one of the states where we have no proprietary products — everything is strictly HECM,” he said. “So, for me, the HECM is the go-to product. The biggest thing in my area still seems to be the folks with existing mortgages that are finding a way to get that mortgage out of their hair and get that monthly payment off the books.”

His referral partnerships are primarily focused on banks, credit unions and other lenders that may have existing clients who could be served well by a reverse mortgage, but the interest rate environment makes things tricky in some cases.

“Folks that come to them looking for payment relief, or [asking] what can they do to lower or get rid of their payment [may bring them to me],” Cullen said said. “Interest rates, of course, have gone up since they were at historic lows, so for a lot of people, they can’t give that customer payment relief because a refi is not going to do anything for them.”

That leaves a reverse mortgage option, which would then eliminate the existing forward mortgage payment, and such clients remain key for Cullen’s business, he said.

“That’s probably the No. 1 area, and what I really look at,” he said. “And then after that, it’s the financial planners with folks that are looking for ways to increase cash flow and preserve other assets. Because that’s the biggest fear people have. They ask, ‘Am I going to run out of money? And then what am I going to do?’ So, preserving other assets by utilizing home equity is the other big thing.”

South Carolina: Referrals are the name of the game

Referral partnerships are also important for David Heilman, principal for HomeGrown Financial in Mount Pleasant, South Carolina. When asked about opportunities he is most keeping an eye out for, referral partnerships were at the top of the list.

“I’m continuing to foster relationships with financial professionals, CPAs and investment advisers,” he said. “All those types of resources are really good for me. Elder law attorneys are another one, and bankers as well. I’ve concentrated on banking ever since I really got in this industry.”

Keeping open lines of communication with banks and credit unions in his part of the country helps the partners by adding another potential tool to their kit of solutions, Heilman explained, and it fosters positive relationships in the community.

“Talking to banks and credit unions that obviously don’t offer the product, and trying to get in front of their staff [allows them to learn about] a reliable, noncompeting referral source,” he said. “That’s proved to be beneficial for me over the years, and that’s something I’m going to continue to do in 2024.”

Reverse mortgage clients are typically focused on the contacts with whom they have a well-developed relationship, which often makes their bank or credit union the first stop for any financial need that may arise.

“I’ve always kind of been able to piggyback on banks and credit unions, and foster relationships there [at institutions] that don’t offer the product,” Heilman said.

Colorado: Expanded partnerships

Bruce Simmons of American Liberty Mortgage is also keeping his eye open for new referral partnerships at banks and credit unions, but he has also started to expand his list to those who provide home-based care in his community of Denver.

“I’m trying to reach out to home care providers and even contractors too,” he said. “Because if it’s affecting people’s income, they need the people to pay them. And if the people don’t have the money to pay for home care or contracting, the work that they need done on their home, [then they may be potential clients]. So, I’m trying to reach out to those kinds of folks, but we’re also trying to do more direct-to-consumer education.”

Those efforts, Simmons said, are primarily focused on digital platforms such as video creation and social media posts — particularly on Facebook.

“We’re trying to do some more of these ads with landing pages that have a brief video about reverse mortgages on Facebook, things like that,” he said. “We’re just in the very early stages of that, and will hopefully be rolling that out in February or March at the latest. But we’re hopeful about it.”

Sandstone Group