American Advisors Group (AAG), the industry’s top recommended reverse mortgage lender, gets a lot of attention. In addition to its market share lead, the company has invested in an advertising strategy that has become synonymous with reverse mortgages across the country, but keeping up with the changing realities of the business is an ongoing effort.
To discuss this and its continued efforts to enhance product education, RMD recently met with AAG President Ed Robinson to discuss how the company is currently adjusting to the business environment and how lenders gained a deeper understanding of what they want to achieve. To grow your business into the future.
RMD: You recently took a leadership position at a major lender, so your perspective is very interesting. This position can lead to some misconceptions that exist in the broader mortgage business. What do you think is the biggest misconception other home professionals have about Revers, whether it’s in the world of mortgages, real estate, or appraisals?
ER: The single biggest misconception is that many people still believe that when they take out a reverse mortgage loan, the customer no longer owns or retains ownership of their home. In fact, recently I was speaking with an executive at a nationally recognized title company. Recently, I had conversations with executives from other title and asset management firms, including my own appraisal firm neighbor. Their views were actually quite consistent with widespread misconceptions outside the reverse mortgage industry.
RMD: Where does that misunderstanding come from? Persistence of some lingering reputational issues? From interactions those people may have had previously with other tools that leverage home equity?
ER: I think there are probably several reasons. One of them includes a prominent financial expert who discusses the pros, cons and ugliness of reverse mortgages. Some of these people, especially those you see on television, have very strong personalities and opinions. Article. The reality is that people always have the fallacy of “let’s protect consumers, especially older consumers.” I personally admire it and think it’s great.
When I first got into this industry 15 years ago, it was very clear, at least from an ancillary perspective, that there were old and strong opinions because of some early failures and product development. FHA and HUD were effectively evolving the product. There are still some myths and misconceptions that persist because of early failures. The good news is that much has been fixed along the way. Still, people have long memories when it comes to our seniors. It is really important that we continue to show that we are in this for the benefit of America’s elderly community and make sure we care for them.
RMD: When you entered the reverse mortgage industry yourself, what was most helpful in setting your perspective on what the industry is and what its main purpose is?
ER: A lot of this comes from education. Ultimately, I needed to understand not only what AAG does, but what it stands for. We needed to understand how our competitors were entering the market, and we needed to understand the idiosyncrasies of our products. It’s a mortgage, but it’s a negative mortgage. Therefore, it was necessary to understand the dynamics involved in pricing that mortgage and loans, determine the amount of borrowing available, and determine the safeguards in place regarding foreclosure.
Foreclosures are generally a different model for reverse mortgages than for forward mortgages. With forward mortgages, foreclosure occurs when people are unable to pay for their home. For reverse mortgages, foreclosure occurs when the youngest borrower dies or when they are evicted from the home. House. Foreclosures can also occur to people who can’t pay property taxes or insurance premiums, or who can’t keep their homes.
The good news is that there are safeguards such as Life Expectancy Settings (LESA). There are ways to make sure that the foreclosure is what actually happens to the consumer. The customer is now taking the full amount of the mortgage and the funds available for the required points, which are expiring in place. That’s why I think it’s important to understand what the FHA, HUD, and the lending and services community in this space are doing to ensure that their products are the best fit for each particular customer.
We educate very thoroughly on what our products can and should be used for, to ensure they are protected financially and, frankly, their adulthood. Children who have a reverse mortgage for additional benefits.
RMD: Based on your conversations with others working in this space, how much effort is being put into correcting product or industry misconceptions, both within AAG and across the industry?
ER: Really, it’s a journey. For example, around 2007, when I started researching Genworth Financial to find out if they wanted to offer their customers a product, there were many articles filled with stories of misconceptions and reverse fears. I had to distinguish between fact and fiction, educate both myself and Genworth executives, and make sure we built safeguards for consumers and businesses.
Coming back to August 2021, when I joined AAG, I realize there are still many common misconceptions. But I also realized that AAG employees really understand the reality. They articulate the facts to consumers, regulators and investors. AAG continues to invest in training, awareness, and concrete customer examples that bring its products and benefits to life. With continuous communication from experts across the company, our people are familiar with the product, business and industry as a whole.
In addition to that, I think we put the most effort into marketing. Of course, AAG is proud to be at the forefront of informing the public about what our products are and what they are not. Our spokesperson, Tom Selleck, has done a great job of speaking heartfeltly to consumers in our advertising campaign.
Editor’s note: This interview was originally August 2022 issue of the housing wire magazine.