The Market Opportunity of Reverse Mortgage for Purchase, with Tom Evans

0:02 Nothing like confirming that you're right. When I launched this Reverse Mortgage Podcast, I did this cuz I'm a real estate broker and I was shocked at how many people qualified for these mortgages that weren't taking them, could have taken them, and should have. I My estimate was about 10 times as many. And so along the way I've had the opportunity on this podcast to meet great originators and executives from companies. And I had the chance previously, we have back today Tom Evans who is an EVP, which sounds very important, at one of the leading reverse lender one of the worst one of the largest lenders in the country as well as one of the leading reverse lenders, Fairway Home Mortgage, which recently rebranded. Tom, thank you so much for joining us today. You know, we're talking briefly about how big this opportunity is. That's why I launched this. You're the head of both marketing and technology. Sounds like that's your problem. So, what do we do to help Realtors® learn about the opportunity that so many buyers are missing? Or how do we get them to spread out to take advantage of this tool in a market that people talked about being difficult? You know, Bill, that's a great question. And thank you for having me. I'm really thrilled to be here again. It's always a fun conversation. Yes, as you mentioned, the market opportunity in the 55-plus/60-plus space right now is just insane. You know, NAR released a report this year for last year's performance that said that 46% of home buyers are over the age of 60.

1:23 And that's half the market. You know, when you look at the number of transactions that were done across the whole country, you're talking about 2.2 million probably that were folks over the age of 60. Now, the interesting piece of that puzzle is that you know, yes, you might think that a lot of them are just doing a cash-for-cash exchange, right? They're selling their home, they're downsizing, they're buying another home with cash, which we can discuss the wisdom of doing that for sure. As a financial professional, I'm sure you have plenty to add there. But still, about 60% of them are actually financing their home with a conventional mortgage and then having to make monthly mortgage payments, which has a legacy impact, which has a retirement savings impact, and which absolutely has a cash flow impact. I think I mentioned to you in our last conversation that my parents recently got a HECM for purchase. And it was great cuz I got to do a live webinar with them just last week where they shared their experience. And I was kind of surprised at you know, my father is a very well-spoken man. I look up to him. I want to one day be as cool and smart as he is. But, you know, he kind of jumped right out with a soundbite that I just thought was astonishing in its aptitude. You know, he said, "We didn't have to deplete our savings. The reverse mortgage gave us enough to pay off our conventional mortgage and still have what we needed for this house. We moved to be closer to our kids." Now, it's my sister, it's not me, but I don't mind that too much.

2:56 And just going from a conventional mortgage to another conventional mortgage and putting out a large outlay every month wasn't very appealing. The HECM opened up our search to a higher level. We could stop looking in the lower numbers and start looking in the higher numbers. So, you have 46% of the market out there that has an opportunity to benefit by getting a house that's 100 to 200 to 300,000 dollars more than the home that they think they can afford. And you're right, we're just not tapping it. And I'm every day I wake up and I go, "How do we do better today to hit these folks and get them excited?" And you know, honestly, one of the solutions has been very analog. You know, I'm the VP of technology, but kind of trying to take a very simple technology platform and marry it to an analog presentation where we're just getting in front of as many Realtors® as we can and asking them, "Hey, did you have a did you have a open house this week?" Yes. Great. How many of the people that showed up for that open house couldn't afford the house they were looking at? Most of them. If you gave them an extra 100 or 200,000 dollars, could they have afforded that house? Yes. Simple math, right? The equation's there. You know, it's interesting because so much of the real estate industry press and as a result, I believe management attention is focused on first-time home buyers.

4:16 And I think on buyers as opposed to sellers. Right. And I've always said that as a business, the business of real estate sales really is listing, selling houses. The buyers who buy it's kind of like you manufacture cars, you have to make the cars. Yes, buyers sell them, but you have to make great cars in order to be in business. And I think in real estate, we focus so much on buyers and then it's very fun Excuse me, fun to think about the first-time buyers. We all reflect back on when we bought our first house. But the problem is by not serving the seniors, they're not moving in the numbers they used to. Right. They're either locked in they think they're locked in cuz of a refinance, they can't afford the house cuz like you say, they're shopping for the wrong dollar amount, they're off by 30, 40%. They don't want to make a payment when they don't need to. And to me, it seems like this just solves so many problems in our industry. And I think the challenge though, as you point out though, the only solution is the face-to-face, belly-to-belly, one customer at a time walking through the process. I know that a lot of it is the bad reputation that the original reverse mortgage has shed over the industry. I said shed, s h e d. Like hair. So, obviously you're you must have given thought to this marketing-wise. And I know you guys as a company, you guys support your originators with a lot of marketing material. How do we get the message about this product? This is not the reverse mortgage of the 1980s.

5:39 This is a very sophisticated tool that for the right person can really make dramatic changes. What's the strategy at Fairway as far as helping engage your originators in giving the tools to go to the marketplace to help move these ideas? Besides my podcast, which I appreciate. I absolutely appreciate being here. It's a big piece of the puzzle, you know? I mean, you have an audience and we have to we have to talk to that audience. I think that, you know, in today's social media culture, everyone has a very limited attention span and, you know, it takes a lot of quality video repeatedly to get in front of folks. I started a series called Boom Movers a couple months ago, but now I'm actually working on new stuff that's strictly just very down to brass tacks that addresses some of the myths and misperceptions that are out there. What I found and I asked a room full of Realtors® this question on Thursday. I said, "Why do you hate reverse mortgages?" You know, you're all here in the room and we're already ahead of the game, right? But why do you hate them? Because I guarantee that 90% of you are going to walk out of this training and probably still not necessarily do a reverse mortgage with one of your clients.

6:47 What's the hate? How can you say that? But done them. How can you be paid by them? I How can you hate something that empowers your customer and they don't have to make a payment? Like what's better than that? I'm just curious. Exactly. And so, it was interesting to hear the feedback. And you know, there was there were some younger real estate professionals in the room that did not seem to have those negative stereotypes applied to the loan. You know, our market is shifting very radically. When you think about the fact that new reverse mortgage customers are now going to be Gen X, not boomers. You know, I mean, it's And Gen X folks are not debt averse, we're not tech averse, we're very focused on living the best lifestyle we can within our means, but also understand that our house can be a vehicle for us to gain more wealth in other areas. So, the same the same things pop up all the time. People think they're going to lose the new home they're purchasing if they buy with a reverse mortgage. And I just said to them, "Why do Why do you think that happens? Why would that happen?" Well, you know, if you don't make your if you don't pay your taxes and insurance, you can lose your house. I said, "If you don't pay your taxes and insurance and you own your house outright, you're going to lose your house, right?" So, that has nothing to do with the with the financing vehicle. And it's the same with a conventional mortgage. You have to pay your HOA, you have to pay your taxes, you have to pay your insurance.

8:06 So, how do you think the house can be lost?" And what usually comes up is, "Well, it's getting lost from the generational wealth. It's getting lost from the legacy that would be left." I said, "Okay, let's address that." You know, my parents are fairly savvy. You know, my dad ran his own companies. He was a salesperson for a long time. You know, he was focused on leaving a retirement legacy for himself. And my mom also worked all these years. She's a product manager, she's brilliant. Keeps me accountable on a lot of things and I appreciate that. But the two of them together wanted to make sure that they could leave us a legacy. However, they still thought it was a better idea to get this reverse mortgage for purchase because it got them into a bigger home and allows them to keep more of their retirement funds in their retirement funds. They don't have to worry about tapping that money, you know? With a with a reverse mortgage for purchase, you can also make optional payments if you want to do that. But instead, they're choosing to hold on to more of that cash now and live their legacy with us while they're alive and also still be able to leave us a legacy down the line because they're preserving their other funding to have that available when they pass. Most people think that the only way I can leave money is to leave my home. And that's true in some cases, but they're very rare when it's actually the only asset available to the family. And you're wearing down all of your other assets to preserve equity in a home that could be your single biggest illiquid cash asset.

9:37 So, how do you see obviously you have you have a interesting title to me. I find fascinating. You're EVP of marketing and technology. Does that then speak to that at Fairway technology is the primary marketing tool or that technology is primarily used for marketing? Or how do you how do you see Give a little bit cuz we had a number of Fairway originators on here and you guys are a big company. Talk a little bit about Fairway's approach to marketing technology and how you fit in and kind of drive that train. That's a great question. I think, you know, one of the things that most real estate professionals and builder agents get confused on is I don't want to have to go and use a specialized calculator on a specialized website. You know, they generally understand basic mortgage principles. If someone puts down 20% they can actually usually I mean most of us can calculate a payment in their head, right? Well, the at the rates are about this so you're going to pay about that. They get a little challenge when they have to do that with a reverse mortgage because people don't keep the PLFs in their head. So, a technology tool that we're working on rolling out as we speak is actually a very simplified HRP snapshot app which allows a builder agent to be sitting with a customer and pop on their phone to say, "Okay, how old are you? How much cash do you have to buy this house? Great. Here's how much extra cash you can get." That's the whole equation, right?

10:57 Purchase price is this. So, you know, if you have somebody who's got you know, they're 75 and they have a $300,000 cash outlay available for the new home. Okay, you could actually get a $475,000 house or afford a $175,000 package upgrade on this new home that we're building for you. So, that's a very small piece of technology, but it's a gap and we're trying to fill that gap. And then the social media side of things which is interesting. You know, video at its heart is analog. You know, you're connecting with people. You're trying to tell a story. I mean, this podcast is in a way analog, right? But think about all the technology that goes behind it and getting it in front of people, right? You do that all the time, Bill. So, we have to maximize those systems as well and you know, with AI these days it's a lot we're in a new world where we can actually discover positioning and placement and strategy that we didn't necessarily have easy access to before and a lot of the metric tools that were reliant on sort of older technology are they're all getting freshened now which gives us a better idea of exactly how we're performing where and when. Right. In the area of technology, you know, I don't think this is I sit and I'll criticize a company I'm familiar with which is EXP. We used to consider ourselves a technology company.

12:17 I don't think that we're doing a very good job of guiding our agents and I think this through industry wide not just EXP but industry wide through the AI land transition landscape. I think it's obviously tremendously impactful at the corporate level and the operational level and the back room operations and accounting and we have large scale numbers of operations being done. Technology is critical. And I think that oftentimes originators at the front line and real estate agents at the front line overwhelmed with well, I'm supposed to be transforming my business to everything digital. Yet, we're really as you see the analog facing business. And so my goal is really to eliminate everything else I do but talk to my customer. And it seems like all the technology is being oriented to eliminating discussion with the customer. Here's a great chat robot that will ask all your customer all the questions that you should be asking them. Well, there's no chat robot in the world that's going to do as good a job with me with my target audience. They might do well with the whole population. They might kill me on the whole thing and they'll be available 24/7. And I think that's where we're being misled. So, talk a little bit about how does Fairway guide its originators and how do you kind of you know, industry wide if we're originating this in the in the field not the VP of marketing technology, but how would you advise a friend who's an originator or real estate agent to integrate the tremendous transformational change taking place without getting distracted with things that really aren't appropriate for them?

13:42 I think that AI can serve an originator as almost like a cybernetic overlay if you will, right? I mean, if you imagine, you know, if I had an exoskeleton that I could wear to get very technical that maximizes my strength that wraps around my physical arms but allows me to swing the bat harder or throw the ball farther. That's what AI can do for you because there are tools out there that will allow you to do your research more quickly that will allow you to find your potential prospects more easily that will allow you to do silly things like actually get their email address and phone number and can help you draft your email content to them. However, at the end of the day the originator is always the key component to the conversation. Most folks are not quite ready to just throw all caution to the winds and assume that a computer is going to help them get what they need out of their long-term financial planning. They want a human being involved in that because I mean, chat GPT says on every screen, we can make mistakes. Right? They specifically say that and we have to keep that in mind. Now, humans can make mistakes, too, but we have decades of experience to lean on and can turn that into the empathy needed. Now, I'm sure that's something Open AI is working on all the time, that Claude is working on all the time, that Grok is working on all the time to create that illusion of empathy, but the fact of the matter is that when we're in the trenches, the customers want that connection. They want to know that they can pick up the phone and get a question answered from a person who has been through it and they also want to hear from customers that have also been through it. So, those things are always going to need that human element, but like you said earlier, Bill, let the tools do all the other stuff. You know, if you spend an hour reading through a document set to check it for errors, that's not a good use of your time. You know, you're a people person. You should be on the phone with people. You should be in people's living rooms. And that's the other cool thing about Fairway is that Fairway is always going to be a boots on the ground organization. We are about being in your

15:46 Local market. We are about coming and talking to you. If you want to do business over the phone, we can do that, also, but if you need to walk into a branch, you can do that, too. And if you think about it, on the reverse mortgage side, that branch-based sale went away when Bank of America and Wells Fargo went out of the business. Right? So, Fairway is one of the few companies that can still do that kitchen table sale if that's what you would like. We do have to be aware, though, that as I mentioned, the demographic is shifting. And we have to make sure that we're facilitating all of our customers. So, if a borrower wants a mostly digital experience until they're ready to actually talk to someone about how to sign those documents, we have to be able to provide that as well. And that's something that Fairway is focused on growing into, as well. And you know, the tool sets have always been a little complicated because most of the larger technology providers are for some reason afraid to invest in reverse mortgage overlays for their platforms. And I would just say to ICE, like I love ICE. I work with a lot of guys over there. A lot of ladies, too. Hey, ICE. 46% of the buyers could be in this product suite if we stopped building walls against them getting it, right? And they're in and they're able to use your platform, we're making more transactions which allows us to get more funds into your organization to continue to improve your technology. So, we're at a precipice where I think everybody needs to understand that an aging population plus a growing potential retirement crisis plus the changes in technology, we're going to have to facilitate moving to this customer base and making things easier for them anyway we can.

17:23 I feel like the your industry is in a moment kind of like where McDonald's was back in the days when it used to only have burgers and fries and sandwiches in lunch and dinner and they kind of got forced into breakfast and now they're the world's largest I think seller of coffee. I think they sell more coffee than Starbucks.

17:37 Yeah, McCafe. They only had the stores, right? And to use that analogy, Fairway already has great local originators. I mean, I've known a Fairway originator I was in I'm here West LA now. I've been in Diamond Bar, Covina area. I've known you good Fairway originators. The first originator I had met who was a specialist in reverse was with Fairway. So, you guys have had that retail presence. So let me just kind of ask you know, whether it be company wide or industry wide my rough calculation is as an industry we should be doing about 10 times as many reverse mortgages as we are now. Meaning cash buyers should be getting at least a line of credit if not some money at a reverse mortgage. People get seniors getting as you mentioned forward mortgages should consider reverses. At least consider them. If they all consider them, if every one of them considered them, I think 10 times as many would go reverse. But it seems like we've created this wall and I think I mean, I'm not in your business, but my sense of it is the originators who are doing well in the who are in the space and specialize and do well are doing really well and they have their referral sources and that business comes into them. But you don't have but I don't see are the new young hungry outworking expanding that market in the education to new referral sources, new Realtors®, new financial planners, new lenders. And you guys have this army of originators.

18:59 Yep. And that's just you, Fairway. That's you, the industry. So, you know I mean, maybe you're not. Maybe you are. I'm not you know, I and you don't have to disclose this if it's personal. But it just seems to me what's the industry doing or maybe what's Fairway doing to help grow the army or arm the ones you have with these tools cuz to me it just seems like it is way it's business is waiting to be taken down. I think I think one of the things that we need to do is delineate between the lower hanging fruit and I don't I don't cheapen it in saying that. I know getting any buyer on the line and getting a buyer financed is not an easy process. If it was, everybody would be a loan officer, right? It's a challenge. You have to find that business. But the heck of a purchase customer is a much simpler transaction than someone that you're trying to talk to about sequence of returns risk and their third bucket for retirement or the third leg of the stool that's quote Mr. Sellick, right? The irony is and I say this so about 25 days from now is my 20th anniversary in the business, Bill. And I can't believe this happening, but it is. And I truly think that while we have done a great service to a great many people in that 20-year span, we have also focused our sale on the most complicated piece of the puzzle. We are trying to sell someone who has already paid off a large portion of their home an opportunity to give that money back into liquidity, but also to take on debt that they weren't taking on before.

20:32 A home buyer is already prepared to take on debt in 60% of the cases. They know what a mortgage is. They understand that in order to buy this house unless they have the cash available, they're going to have to take some financing on. So, if they're already prepared for financing, I think we have to get out of this space where we're saying, "Do you want a forward mortgage or do you want a reverse mortgage?" And just say, "How can we help you finance your home? Would you like to make payments or not? Would you like to defer those payments or make them optional? How do you want to structure your loan? Because if legacy is important to you, we can give you a strategy to preserve legacy. If you want to just do a conventional forward loan, sure. Fairway can do all of that. You know, that's the beauty of Fairway. I mean, we really truly can put the person in the best product that fits them the best. You know, if they're a veteran, we have programs. If they are looking at a rural property, we have programs. If they're a first-time home buyer, even later in life, we have programs. So, we can we can really service the 55 plus crowd in a way that no other lender can. And we want to. So, that's really our mission internally is to get more people aware of that easier side of the transaction. Fairway can close business very quickly on the purchase side. And considering the customer is actually putting down more money in most cases, it's probably the second most secure transaction after cash. So, if we can close in 15 days, give you a very secure transaction that's almost as sure as cash, and we can get your customer more house, where is the drop off? There is no liability there. And that's my job to get people to stop thinking about liability in this product.

22:09 Well, as a as a listing agent representing sellers, you know, if I got a reverse for purchase or HECM for purchase offer from one of the larger reverse only lenders, I don't think you know, I'm going to obviously present it, but I'm going to say to my customer, "I don't know how many they do purchase-wise, and they don't live in the purchase world where that's their reputation and their business, whereas Fairway does." And if Fairway originator called me up, you know, it's a whole different experience. You guys aren't going to put your reputation on the line frivolously, and you're not going to drag me out just because you got another reverse mortgage in your bank. You guys are built on working with and supporting the local real estate community. So, I do think I think that's a great spot for you guys to focus on. The H4P makes sense in that it's an easier sell. And of course that the buyer of that loan, I guess, the borrower of that loan, the buyer, they might later refinance and get a bigger reverse. You know, they might find it fits the reverse mortgage, you know, estate planning program down the road or 5 years later redo it, but at least now they're comfortable with the process and they have an originator they have a relationship with. And I agree, and I think we also love to kind of combine both of those thing in one. Once we Once we're talking to a borrower, to say to them, "Hey, you're you know, you have this much cash available, but it looks like you don't want to buy a house that maxes out all that cash. Would you like to keep some of that cash in hand or would you like to overfund your purchase and build that credit line?" Cuz that credit line grows at the same rate as the interest rate on the loan. So, you know, folks are buying a new home and ending up with a million-dollar credit line, you know, in the later years of their life. Like that's a win-win on every level. So, I agree with you. One thing I want to just point out quickly is that You mentioned that Fairway is so purchase-oriented, and we are. And I don't know if people know this, and I'm it's one of the one of my very most proud statements about Fairway is that Steve Jacobson, who is the president of our company, is on an email box for closings. Closing 911 it's called, and I'm probably spilling some secrets here, but Steve sees every email that comes in

24:13 There. So, his goal is to make sure we close on time every time. And if we don't, we fix it. And the times we have to fix it is very rare. So, the fact that Fairway is so focused on helping people close loans quickly, easily, on time, that is such a huge advantage over speaking to, you know, another larger reverse mortgage company that mostly does those refinances. You know, we know how to get a loan closed to get up people keys. Keys is at the end of the day, right? You know, the call center mortgage, I mean, I you know, when the offer comes in as a listing agent, I'm always talking to the buyer's agent out of using them because I say, "Listen, you're not going to get paid cuz what's going to happen is your buyer's going to get I'm tough on the on the on the process unless they're the only buyer on the deal, but generally if it's competitive, we're going to push you aside if you don't perform. And 1-800 we have the lowest rate mortgage.com, believe me, they're not going to deliver on time. That's just that It doesn't work that way in life. I promise you. Now, if rates go down, they'll deliver that rate, but if rates go up or stay the same, you're not getting that rate. Your customers aren't going to be happy and they're not going to perform. So one of the this brings me to kind of the next point and one of the reasons I the other reason I launched this podcast was and it's not Fairway, but the challenge of the reverse mortgage is the borrowers end up leaving more likely to die. Like the Of all the mortgage products that likely to have your borrower die, imagine it's a reverse mortgage compared to an FHA That's fair.

25:42 That's fair. I guess VA to active duty maybe in the time of war, but you know, we're not there. So, you have more challenges in that. You're going to deal with more transition of ownership issues than forward mortgages are. And I think the nature of reverse mortgage cuz the payment's not being made, there's this false perception there's no need to make a payment. Well, there isn't as long as it's their primary residence, blah, but now that they've passed, there is. And so, to me, the reason I the other reason I launched this podcast was what I call reverse mortgage SOS where mom and dad passed, there's three kids, one's living in the house, he doesn't know there's a mortgage cuz they have a line of credit now or they paid it back or whatever. Maybe there's no payment due and he's throwing the statements away. He doesn't recognize the company. And all of a sudden they get posted for foreclosure. And the property's not owned by the family. You have to go through that transitional such. And it seems to me that this is part of you know, forward mortgage lenders have the problem of being transaction-oriented where they look at each mortgage as just a transaction or a referral from the Realtor®. They don't really establish a long-term relationship with the customer. And you can't really return your own pipeline of refinances cuz it kind of undermines the company and there's rules on that. And so, it's almost like dissuasion to keep attention to the customers. Yet, on reverse mortgages, we have to do a better job of this handoff process. This is what really hurt the reputation. I think this is the opportunity for service-oriented companies to step up and excel. Any ideas or thoughts on how your originators in the reverse space can take this to their advantage rather than Obviously, you don't want to tarnish your company's reputation. You guys Branding is very important to you.

27:18 100%. And we touched on this in our previous conversation, too, and I'm glad you brought it back up. When we spoke last time, I mentioned that we were adding staff to handle just that. And you know, there's two pieces of the puzzle. There's the basic bare-bones how do I manage my mortgage, what do I expect after closing piece that the servicers generally are not able to do on scale. The servicers are going to do the key thing that they're supposed to do, which is manage the loan, make sure you get your payments, etc. And they're going to send you mail that may be confusing. And it's up to us to educate the borrower ahead of time to make sure they're aware of that. You know, we actually just had a summit with our top-producing loan officers to talk through these issues specifically. You know, obviously the legislation about trigger leads may have some bearing on this as it moves forward, but the deluge of mail that our borrowers receive actually is almost a second full-time job for our originators that do scale because they're managing those expectations and helping the borrowers understand what's happening when they're receiving a piece of mail. We are as I mentioned to you before, we are staffing up to continue to support that even though we don't service our own loans at Fairway, we are making sure that we have people that are available on the phone. Fairway has another servicing 911 group that's amazing. And we have such a large portfolio and that group jumps in to help everything. So, we're expanding that department to have reverse mortgage specific experts there. But as an industry as a whole, I think we need to continue to truly be understanding of how confusing it can be to be in that position, whether you're an heir during the handoff process or whether you're just a senior who is in the loan and is receiving something that says, "You need to validate your insurance." And they're like, "Well, I paid my insurance. What is this? I don't understand this." small step aside for a second, you know, I actually think, and I've encouraged this before, for folks that are looking to build a credit line or are not looking for a significant cash outlay up front with their reverse mortgage, taking the LESA, which is a life expectancy set aside to essentially make

29:23 Sure your taxes and insurance are always covered, is a great idea. I actually kind of renamed that a life emergency savings account, right? So, if something were to come up down the road, you wouldn't have to worry about it. You're in your house forever because you know your taxes and insurance are always covered. But that aside, when we're looking at the transitional phase, I think that it is it is rough when an heir is not even aware that the that the property has a reverse mortgage on it. And unfortunately, we're not always notified immediately when the borrower does pass. We are constantly trying to put out Actually, right now we're working on some new video material that's designed for the heirs. So, you know, sort of a you know, in case of emergency press here option that allows them to have everything in one place and just shows them, "Hey, we're sorry that you're going through this moment, but here's how to easily handle it." so, we're hopeful that will take us a step in the right direction. But, you're right. When it comes to reputational risk, that is one of the single biggest places and there are so many pieces of that puzzle that can be challenging. You know, even if you're going to do deed in lieu and you're just going to hand over the home, there's still stuff that you need to know about when FHA is going to come in and winterize that home and are they going to turn off the water and when do you have to get stuff out of it? And we always need to do better at supporting that transition of the loan. You're right, it's not a one-and-done sale. You have to be prepared that customer and their family are part of your life for the rest of their lives and beyond.

30:48 Well, I think that's both the challenge and the opportunity for originators building a business because if it gets down to just you know, triggering people's activity on internet or chat GPT, Google, Facebook, Grok, they're all going to kill us. Yeah. If you want to get between me and my customer, good luck. If I've done my job, they're going to listen to your pitch from Facebook or Google and they're going to hang up the phone, call me and say, "Hey, Google said that I can save money here. What do you think?" And they pre you know, they've pre-sold me on you know, what I have to do. That's how I look at Zillow. When I talk to sellers, they go online, they look at the comps, they look at the value. They're like a little pre-trained for me. I say, "Thank you, Zillow, but there's no way my customer is going to list with Zillow given my particular niche and expertise." And I think as originators, that's their opportunity that So, I know that some products require an annual form by the consumer. Yes. And I got to tell you, I've done 25 interviews with originators. You know, I don't You're not in that category, but you know, people on your team and at Fairway included. And the top ones talk about that like it's one of their goals in life is have as many of those as possible. And it's interesting how the ones who are less producing is like an administrative thing they have to do. And I you know, and I love to embarrass my on the show and just say, "How many reverse mortgages have you done?" Because if you've done 200, that's one per work day. That's one phone call to a past client who you got paid a lot of money for to keep the relationship so that when they pass, you work with the kids to get the house sold or get whatever else. Why what else are you doing that's more important if you're still in business?

32:29 And so, I my goal would be that company like Fairway should say like you could have your commission to close and the rest is spread out yearly or Steve could look at those emails and if the customer says, "Haven't heard from originator in over a year," he just comes out and shoots them dead. I think that would be a great program. You'll get paid You'll get paid $35 a month from us to service that loan for life, right?

32:48 That. I don't know. There's got to be some answer there or just a stick or something you beat them with. I don't know. That's a really fun idea. Call your customer every year? I don't get it. No, I totally agree. And you know, I mean, it is such a I mean, when you're very successful, you're doing 50 or 60 of these a year, right? And you know that a lot of your customers are not going to be around that much longer, too. So, I do think to your point that I mean, this is really important cuz the demographic of the borrower is youthaning, if that's a word, right? So it's not a question like the life expectancy on a reverse mortgage had been 7 years. I think that we're going to see that dramatically grow and I think that's going to have an impact on the market. You know, a big part of why these loans are lucrative in the secondary market is because they have a limited lifespan. You know, people know when they're going to collect. And if that lifespan starts becoming 15, 20 years or a 30-year loan, I mean, at that point, we have to start thinking seriously about how the markets line up against each other. And but that may be a good thing at the end of the day cuz it might help streamline and stop getting people thinking that these are two radically different, you know, product bases. Well, plus you do have servicing income for a longer period of time. I can see why servers there are some servers who would love if they could just double the length of the portfolio. I think there's some that would love it. And I think the other thing that I tell people is how we join say, "Well, you know, I called my friend and they had passed." Like Well, that's great cuz now you can help them.

34:16 Like what are you doing with the house? And don't you know Realtors® you're trying to get business from who would love to help go through those problems or those challenges? Or one's passed and now you know, now it's just the widow and she's scared and she doesn't know how to handle these things. Isn't that great chance to strengthen your relationship? So, I don't know. I that this that's been one of my soap boxes since I started this. From a technology perspective, I don't mean to cut you off, but you know, I do think it's important that if you have a CRM system and you're able to dial into actual life event intelligence on your borrowers, that's smart. You know, I mean, it's always great if you're making a phone call and finding out that someone has passed, but if you are able to find out immediately and reach out and say, "I'm so sorry for your loss. We heard this happened. We're here for you to support you through this transition." That's very different than calling someone and asking for someone having them say, "Oh, they died." You know, so you want to find a balance there and technology can help with that. But I do I absolutely agree with you. There's so much opportunity when the loan does transition in any way. You know, if there are heirs who would like to refinance the home, there's a transaction there. If they want to sell the home, there's an opportunity for their Realtor® partners to step in and do that. You mentioned sellers earlier and I did want to mention that one of the things I think we need to do on a on the education side to help with creating a bigger seller market is educating people who think they're stuck because of rate or because of their home value. You know, because if they have this additional purchase power, they we actually find You'll laugh when I tell you this. A lot of people that reach out to us to get a traditional reverse mortgage end up getting an HECM because they then realize that it's not so much about wanting to stay in the home, it's about I have an opportunity to get a better home. Okay, I'll take that opportunity.

36:05 They just they're not aware because they don't know they have that extra purchase power. So, now you've created an opportunity for that home to go on the market and hopefully get a first-time home buyer into it. You know, I was shocked in this market data that the average home The average age of a second home buyer is 61. Like how crazy is that? You know, the average age of a first-time home buyer is going up, too. It's like in the high 30s now. It used to be much lower than that. Yeah. So, people are staying in their homes longer than we think and I think they're staying because they're securing these low interest rates and assuming they're going to be set for life, but there's still stuff that's going to pop up. And the fact of the matter is that no one is in the same position 10 years after they buy their home that they thought they were going to be in when they bought their home. No one. You know, something changes for all of us. So, the decision to move closer to aging parents or to family or better climate or single-story home, like these things are very much necessary discussions to have. And if you're reaching out to your customers every year, you can have that discussion with them. You know, and ask them if they thought about those things. Right. Cuz if you if you're looking at you know, basically transferring your mortgage, sell a house here, go there, same mortgage from 3% to 6%, you're going to double your payment. Who the hell wants to do that? But you're saying I could go there and have no payment.

37:22 Well, hold on. Yeah, it's a higher rate, but you know, that's down the road and there's some other flexibility and reasons. And I do think that, you know, maybe from technology I don't know what if there's a limit to that annual statement process not notifying the originator. It just seems to me the originator should be reaching out to the customer every year with that form and or their interest the 1099 or 1098, whatever the interest one is, form as well because they're going to call you if they don't get it. So, why not just call them and say, "Hey, did you get it? Here's how you get it. Here's the link to the thing." Or here's I got an email copy. Of course, there's privacy and permissions and all that. That's technology stuff. That's your problem. My problem is EVP. I'm just a sell a salesman, but it just seems to me that somehow that technology we use so much to protect ourselves, we just need to also empower our customers. And I think that annual requirement is also an annual opportunity to develop those relationships. So, I just urge all the originators on here to continue. Hey, look, Tom, I know I've gone long here with you. I really appreciate your time. I know you have other things to But you got a big title, so you got to do something else. You can't just talk to me. But I just want to thank you. I just want to thank you on behalf of, you know, your originators and the industry in general. I think you guys, you know, have hold a high bar and as far as having specialized reverse mortgage originators, I think it's great. Your website, I know that people want more information, they can go to fairwayreverse.com.

38:44 You have a whole website that's focused on the reverse side of the business. Yep. And then I know you do got a lot of content. Talk a little bit about your content. You mentioned you're changing it. So, where can people find your new stuff that they're looking for?

38:56 I mean, this is a great place to start. We're always adapting and developing new stuff. You know, keep an eye on our social media feeds as well. We're starting to grow into a Tik Tok and other channels as well cuz our borrowers are getting younger. The one other thing that's on this site that might be fun for folks to check out but if they haven't, there's a tool called mortgage builder, which is on the homepage that you were just on a second ago. Up at the top there, if you click on try it free today, mortgage builder is an opportunity to actually get an affordability comparison between a forward loan and a reverse loan to sort of show you what you could you could be seeing. So, no reason run through it now, but I strongly suggest that people do check it out. You can also go directly to mtgbldr.ai and it'll take you right to that tool as well. So, the fun way to help me

39:40 Mtgbldr.ai? Yep. There you go. Well, look Tom again I know you guys have a huge operation both on the forward and the reverse side. I really appreciate the chance to chat with you today and learn more about it. And thank you so much for supporting the podcast. Appreciate you. Thank you. It's been great to be here and good luck to everybody. Enjoy the rest of the year. Let's go get them. Thanks so much. Hey, I'm Bill Gross with the Reverse Mortgage Podcast. We get together every week with a new episode. Mostly commonly with the reverse mortgage originators in this case management top management from one of the largest in the country. Really, I hope you find it as interesting as I did. If I can help please reach out @BillGrossProbate on social media. Call, text, or email if I can help in any way. And as always make today your best day ever. Thanks so much.