Last year was a difficult year for reverse mortgage business operations, and perhaps nowhere was it hit harder than the industry's front-line lenders.
After enduring challenges such as rising interest rates, stricter qualifications and broader industry consolidation, loan officers appear optimistic about how things will develop in the first half of 2024.
This is according to a series of RMD interviews with six reverse mortgage originators across the country, including California, Washington, Florida, Wisconsin and South Carolina.
Difference between “day and night”
When asked a simple question about how business has fared so far this year, David Heilman (principal) responded: homemade finance MOUNT PLEASANT, S.C. — characterized the difference between business in early 2024 and the same time last year as “night and day.”
“I don't know if there's really anything to point out, but [why that’s the case]'' Heilman said. “Certainly, we are already getting more inquiries. Usually this is a slow time for me. January and February have always been slow months. In the spring people start moving again, but in 2024 So far in the year, I feel like we're at least getting more proposals, which, as we all know, ultimately leads to more applications.”
Jim Cullen in Green Bay, Wisconsin university bank also reported a similar trend.
“This year is off to a good start,” he said. “In the second half of last year, going into December, I noticed that for some reason things started to pick up. Direct inquiries and referrals started to pick up a little bit, and things started to move a little bit.
“During the holidays, people stay home a little bit, but as we enter the new year, there’s a lot more in store.”
The change is a welcome change, he explained, as 2023 may have been “the worst year in 19 years in this industry” for him. “I have to confess, I’ve been struggling all year.”
“Active” and “stable” interests
Nearly 1,400 miles away, reverse mortgage specialist Chris Bruiser's phone is still ringing. Omaha Mortgage Mutual In Tampa. Bruser primarily operates through referrals and has seen a consistent level of inbound interest, he said.
“My work as a financial planner continues to be very active,” he said. “But for me, it’s a lot going on.” [Home Equity Conversion Mortgage (HECM)] In order to buy. Obviously, there's a lot of active adult communities here and we're still building them. Therefore, I continue to focus on the active adult market for so-called “lifestyle mortgages”, commonly known as HECMs for purchase. ”
Bruce Simmons is located in the Denver area, about 3,000 miles from Tampa. american liberty mortgage It reports that things will get off to a “stable” start in 2024.
“In terms of interest in reverse mortgages, it's been stable,” he said. “But challenges still remain in terms of making people eligible for a good income. Those are the biggest challenges, and even if you have a good income, it's not worth it right now. Sometimes I say.”
Simmons explained that inconsistent interest rate forecasts are making things difficult for his business, but that different types of marketing are helping to improve the situation, including refocusing existing marketing efforts. .
west coast
In the Pacific Northwest, Frank Borg Fairway Independent Mortgage Corporation Seattle-area businesses also say they're off to a good start this year.
“It's starting with really good momentum,” he said. “A lot of my prospecting and strategic activity will be focused on the first part of the year, and I've definitely seen my pipeline grow as a result of my activity. . My outlook is very positive. We're probably looking to double our production from last year.”
Tom O'Donoghue of the Los Angeles area reverse loan now The company reported that its performance in January was better than expected.
“You can see a big difference in the amount coming in,” he said. “My prediction for January was that I would get 8 new leads, but I ended up getting 11. I was only expecting 2 new applications, but I ended up getting 11. There were 4. We don't have any funding yet, but we expect to have 3 funding at the end of this month, in February, and still have a good pipeline in March. So this is… definitely [makes for] It's a huge improvement for me. ”
Addressing challenges
Like others, O'Donoghue reported that 2023 was a challenging year that shook his confidence, but speaking to leaders he respects in the field gives him some perspective on how to approach business this year. He explained that he was able to obtain
Many of the business challenges of the past year don't seem to have stemmed from a lack of interest from potential customers, he said. When people crunched the numbers, it became clear that the returns were either zero or not enough based on the interest rate and principal limit factor, but that is slowly starting to change.
“At the end of the year and early January, the numbers started to change. [ran numbers] We've got new clues about people who are able to get off the fence and move forward, and where their homes are free and open,” O'Donoghue said. “So it also helped get people off the fence.”
