4 minute read
When Bank of America, Wells Fargo and MetLife Bank left the reverse space, many people said it was because banks did not have the proper compassion or commitment to the industry.
I do not believe that was true. Those banks left the industry because of financial and logistical challenges; there were pressures brought on by the bigger picture based on profit and loss. I believe that big-bank players had the drive, experience and knowledge to succeed, but sometimes holding down the bottom line in a larger institution is too difficult when you are overshadowed by bigger business channels that are thriving.
At the NRMLA conference in Miami, a small meeting was held for banks in the industry in order to share our perspectives and offer ideas. That meeting, hopefully not the last of its kind, was both interesting and productive. It presented the opportunity to hear about the challenges other institutional banks were facing. The group agreed that small banks can still make their mark in this territory, but perhaps discussing our obstacles can help us all thrive in this space.
After all, a community bank is a trusted place where many people, especially those in rural areas, go to learn more about reverse mortgages. This is not to discount the value of mortgage brokers or mortgage bankers, but to shed light on the long-term relationships that have been built between families and institutions. All of us who are part of this same structure have to continue to do what is needed for the industry and the product while balancing the bank’s community image.
I have heard this comment from other bankers: It is difficult, reputation-wise, to offer a product that many think is substandard or tainted. Public perception is an image-maker. Small community banks must constantly be very aware of this issue and we take great pains to show the positive aspects of this product. Unfortunately, the public still holds on to the many misconceptions we have heard over the years. We as an industry have not been able to overcome that yet. The “new reverse mortgage” may help over time. Individually, we spend a great deal of time training our loan officers and educating our clients, transforming these misrepresentations into facts.
The fact that banks are subject to different regulatory oversight presents unique day-to-day challenges. At FirstBank, our divisions are product-focused, which allows us to spend a significant amount of time and resources on our reverse division, without those efforts getting in the way of the bank’s other channels. I like to think that our reverse division is a separate endeavor that has had a very positive impact on our bank. For those in the reverse channel of a larger bank, it’s important to ask, “How do my efforts support and add to the overall success of my company?”
Our discussion at NRMLA gave rise to some ideas that might help small banks in the reverse space. We thought some might consider leveraging their own branch systems and existing customer bases to help get the word out about the bank’s reverse division. Combined with outreach campaigns, statement stuffers and counter cards, you have the makings of a built-in resource for internal referrals. Training other staff members to converse about reverse mortgages in a positive way is also a great tool to implement.
FirstBank is a small community bank compared with some of the larger institutions with reverse channels. Our passion for helping our customers is what drives us to maintain our community status and put forth that extra effort. We are committed to this industry as a bank lender in this space, because the product truly helps people. Even though we have challenges as an FDIC-regulated entity, the benefit to the consumer outweighs the challenges because the product offers so much to the people who need it.
At our NRMLA meeting, I heard members of other banks express the same thing. We discovered that working groups like the one we created are a great way to share information and discuss challenges. For small banks in the reverse space, perhaps collaboration is the key to success.
