No part of the mortgage business is more ubiquitous in the use of celebrity spokespeople like the reverse mortgage segment.
Admittedly, they were not the first; those of us of a certain age remember former New York Yankee shortstop and broadcaster Phil Rizzuto hawking The Money Store.
But when it comes to reverse mortgage products, it seems like every company has to have its own celebrity. The latest is Security One Lending, which has just signed up Pat Boone.
Others, past and present, who have promoted the product include Henry Winkler at One Reverse Mortgage, Robert Wagner for Senior Lending Network, Fred Thompson for American Advisors Group and Jack Kemp for Generation Mortgage Co.
While the lure of a celebrity spokesman is huge (especially given their success in marketing other products), sometimes it might not hit home with consumers as well as someone who has experience with the product speaking from the heart.
Greg Frost, one of the top producers in the industry and someone well respected for his marketing prowess, is the centerpiece of an online video aimed at seniors looking into applying for reverse mortgage.
It is a presentation made from the heart; Frost has seen what the reverse mortgage has done for his family members, particularly his uncle and his brother.
His company has been originating the loans for two years, and is in the process of bringing it “in-house. It will be a correspondent as opposed to a brokered product.
“We see significant growth in that particular product line and we want to take control of our service levels with it,” he explained.
Another thing affecting service levels as well as changing the competitive landscape for the reverse mortgage lending business are the decisions by Bank of America and Financial Freedom to discontinue offering the product entirely and by Wells Fargo to stop purchasing these loans through the wholesale channel.
His brother is 62 years old and had significant equity in house. The reverse mortgage eliminates the monthly payment on his forward mortgage for the rest of his life.
It will save $850 a month, which is significant for his brother and his wife. He is in the remodeling business (which is going through a tough time right now) and his wife is looking to retire.
Not having to pay a monthly payment (which Frost notes meant they need to gross $1,250 a month in income) means his brother’s wife can retire as planned.
Frost set his brother up with annuity that will pay into a savings account and that revenue will pay the taxes and insurance on the property.
His uncle’s situation was more complicated. His uncle and his wife moved from Southern California to Albuquerque, N.M., during the height of the boom. The price he received on the sale of the California property allowed Frost’s uncle to pay cash on the new home.
But the market, like many, was artificially boosted during the boom. His uncle’s wife took ill and for a number of reasons, the family needed to return to California, at first part time, but eventually made the decision to return full time.
However, the New Mexico property sold at a loss to his uncle and as a result, they faced the possibility of not being able to afford a home up to the standards of the previous two.
That is where the reverse mortgage came in. Frost’s uncle invested $228,000 of the net proceeds from the sale of the Albuquerque property and as well as money in the bank, while financing a home without having to make a monthly payment.
Frost is now an evangelist for the product. “I think the government has finally gotten something right. With the collapse of corporate retirement plans and the problems with Social Security, the reverse mortgage is a way for the average American to be able to afford to retire.”
It is this sentiment that Frost gets across in his video, which appears on his website. Those videos are hosted on YouTube because they load faster.
He was looking to put message out in a conversational format, hosted by an industry professional rather than a celebrity spokesperson.
Frost used the examples of how the product benefited his family members in that video. Before the situations with his relatives arose, he really hadn’t thought much about the product.
But he studied reverse mortgages and learned that they could and would benefit his brother and uncle. “After applying it, I found out it is as advertised, it works extremely well.”
If anything, there are too few lenders offering reverse mortgages right now, and as a result, they are busy and their service levels are suffering.
That is one of the reasons why Frost Mortgage Banking Group is bringing the product in house, to elevate the service level.
On the video, Frost points out that when he sees someone like Wagner doing an advertisement, it looked like he was reading from a script.
He told consumers that he was not reading a script as talked to them about what he knows about reverse mortgages and how it helped his family members.
“There is nothing easier to market than the truth. There is a lot to be said for the truth being compelling. And in these two instances, I have seen the benefits first hand.
“And I have looked into the eyes of my brother and my uncle and I’ve seen how appreciative they are of what I’ve been able to accomplish on their behalf. And that takes me back to the very essence of what we’re supposed to be doing for a living,” Frost said.
