Reverse Mortgage

AAG EVP: How a Reverse Mortgage Chief Maintains Momentum in 2021


While the volume of reverse mortgage origination fell below 4,000 monthly units for the first time since the end of last year in August 2021 compared to the previous months, it can be counterproductive to rely too heavily on such a metric without a trend. Also, it cannot fully indicate the state of the business now or in the near future and should not prevent a reverse mortgage lender from meeting their business or customer satisfaction goals.

That perspective was shared by Jesse Allen, EVP of Alternative Distribution at American Advisors Group (AAG) in the latest episode of The RMD Podcast, which is now available. In a wide-ranging discussion, Allen speaks about some of the current initiatives AAG is developing, what trends the company plans to track in its business, what data metrics remain important for business planning purposes, and how the reverse mortgage industry has evolved in the 14th Years in which Allen has been in business changed (over two separate stations).

Issue volume

Home Equity Conversion Mortgage (HECM) approvals fell 14.3% to 3,679 loans in August 2021, with July now marking the end of a series of monthly volumes above a threshold of at least 4,000 units observed since late 2020, based on data compiled by Reverse Market Insight (RMI).

When examining the data on behalf of AAG, Allen points out that all major lenders saw steep drops in approvals, with the majority of the five largest lenders even underperforming the broader reverse mortgage industry.

Jesse Allen

“If you look at the top 5 lenders and we’re in that mix, only one of the top 5 lenders has been up month on month,” explains Allen. “The top 5 fell even more from month to month than the industry as a whole. So I think we all know HECM advocacy flows – there are many things that affect the number of grants versus originations and funded volume. There are calculations and delays, and various lenders have delays in packaging, shipping and confirmation along the way. “

This, of course, leaves legitimate doubts as to how meaningful the new data is for monitoring an industry trend and whether something that is an “outlier” in the data until other months to come should be a reason for a large reverse mortgage lender Further.

“So, I’m not sure, number one, is it just an indication of the advocacy process? Or is it an indication of origins and financing? But the big picture is that we’re focusing on the long haul, ”explains Allen. “And so for me, month after month Blip – I notice it [and I] make sure [and obviously we] I don’t want to string a bunch of them together – but in the overall picture it’s irrelevant to me. “

High placement in separate sales channels

Due to the ubiquitous ubiquity of AAG in the reverse mortgage sector, separate business channels at the lender ensure very high placements in the individual business areas on which the company is focused.

“Each of our sales channels is a dominant player in its respective area,” explains Allen. “We have three core sales channels: Direct to the consumer – who everyone knows dominates retail, this is our call center and the most mature of our channels, and it’s a machine. They do a great job taking care of customers and pushing the theory that you cannot sell this product over the phone. So you dominate the sales area. And then my sales force channel developed as an independent retail company from nowhere to probably number four in retail. “

The growth of AAG’s dispersed retail group offers a unique perspective on the company’s ability to serve the needs of a broad customer base, says Allen.

“We’re one of the four largest lenders – the Distributed Retail Group, my Field Sales Group all alone – and the same goes for wholesale, [which is] in third or fourth place, ”says Allen. “So when you think of AAG, not only do we have a significant market share, but we have a very long-term view of the customer and provide a service to our loan officers and our customers. And so, month after month, a blip for us is just that. Each of our channels is one of the top 4 players, and that’s why we are committed to the long game. And so we tend to focus less internally on buying these monthly changes in recommendations, for example. “

The reverse mortgage technology gap

It is also important to recognize any current or emerging shortcomings that the entire reverse mortgage industry can exhibit at the institutional level, and one such area that the entire corporate sector is likely to improve is technology integration, says Allen.

“The challenge of developing our skills is more acute in this industry than in other mainstream industries,” says Allen. “Take technology as an example, and I think the pandemic really brought this to light for a lot of people: this [has been] Because it was a niche industry, it didn’t make solid investments in the way we use technology to cut costs, improve build quality, and deliver a great loan officer and customer experience. This dialogue [and] Investments in the opposite direction have not been made as energetically as, for example, in traditional mortgages. “

Because of this, the potential for the reverse mortgage industry as a whole in the United States to modernize and streamline its technological capabilities is very high, even despite other issues that could hold that side of the business off the regulatory front, he says.

“There is more [discussion about technology] Today more than ever before, which is really exciting, ”he says. “And I think the industry will find out. But I think that’s one thing we need to find out if we really want to serve more of those 78 million potential buyers in the 55+ age group and what they grow up to be. By definition, that means we have to start solving some of those things that the industry was a little late on because of the nature of the story, the journey we went together. I think this is the moment when you start thinking about operationalizing the challenges that go beyond just creating and processing loans. “

Finding the right places for reverse mortgage lenders, brokers, and borrowers to invest in technology development is challenging but potentially rewarding for everyone involved as it can be done in terms of optimizing operational efficiencies, he says .

“I think this is a great strategic opportunity for the industry,” says Allen. “And I am very optimistic that we will find out. Because here, too, there is a lot of effort that more people talk about it than ever before. “

Listen to the latest episode of The RMD Podcast for the full discussion with Jesse Allen.