By now you’ve heard that the reverse mortgage niche is one of the fastest growing segments of the mortgage industry that we have ever seen. Are you thinking about getting into this niche and capturing the avalanche of business that will surely come your way? If so, congratulations, it’s going to be a great ride. Imagine a product that not only will boost your production but will help the seniors in your community as well.
It’s been called the “tsunami niche” and I think that’s an apt description of the evolution of the reverse mortgage. Even though the first reverse in our country was done back in 1961, the groundswell of interest on the part of the consumer was slow in coming. But, boy, it is here now. What factors have come together to create this environment for the perfect storm? There are several: First of all, let’s take a look at the senior population in our country today. Many of our retired folks are living on fixed incomes, having difficulty making ends meet- just paying their regular monthly bills- no luxuries. As much as 90% of all seniors today rely to some extent on Social Security just to meet their monthly obligations. With average life span approaching 77 years, living longer is certainly going to require more money than many folks had planned on.
Second, many seniors today are living off their credit cards- I read an article recently that revealed that credit card debt for those on the 65-69 age group is up 217% over the last 10 years. In addition, bankruptcy filings by seniors are on the rise.
Next, the Baby Boomers (all 77 million of them) are expected to put a further strain on already stretched programs like Medicare. In addition, changes in Medicaid laws will more than likely disqualify many people in the next several years. And many of these boomers (born 1946-1964) have not saved nearly enough for retirement. Where does that leave us? There is a significant disconnect between what people had planned for their retirement to look like, and the reality for many of our seniors. Reduced or eliminated pensions, medical bills, prescription medicines, increases real estate taxes…these are just a few of the items impacting our older adults. However, with all the varied backgrounds and individual situations, there is one thing that many have in common…the vast majority of senior citizens are homeowners. Recent statistics show that seniors own in excess of $4.0 trillion worth of real estate.
And that, folks, is where you as the reverse mortgage expert in your area can come to the rescue. We are talking about a product that can literally change someone’s life. When you attend a reverse mortgage closing (which I recommend you do) you can just see the relief on the faces of your clients and the tension just melting away. How many times in your career can you walk away from a closing knowing that you have done such a positive thing for your client (and earned a commission at the same time)?
Think you can’t possibly do this? You’ve never worked with senior clients before? You don’t know where to find them? Of course you can do this- just look around- seniors are everywhere! They are the fastest growing demographic group in our country- and this trend is sure to continue for years to come. Where do you live and work- big city, small town, rural area…no matter…there are senior homeowners in your community and they are looking for a reverse mortgage expert. Imagine for a minute what it would feel like to have the client chasing you…you are suddenly in demand. Think I’m kidding? One Reverse Mortgage Success member in Texas ran a small ad on his local radio station just to see what the response would be. He called me to say that he had to hire another FULL TIME loan originator just to handle the reverse mortgage inquiries. That is just how it happens with reverse mortgages…seniors are looking for someone to give them this information. Why shouldn’t you be a part of this tidal wave of growth? Recent estimates state that we have market penetration of less than 1-1/2%. What are you waiting for? In many areas, there is still little to no competition. And since there are no income or credit requirements to qualify, this program is the perfect solution for many seniors with impaired credit or those living on a fixed income.