Database Mining: Identifying 55+ signals in your past-client book

Speaker A: Foreign. Hey, guys, welcome back to another episode of Loan Officer Life Hustle, Heart and Home Ownership. We're gonna double down on heart and homeownership on this episode. And joining me is my good friend Jesse Allen. Jesse is the president of the Active Adult New Term. I'm learning reverse mortgage business at rate. Jesse, thanks for joining me.

Speaker B: It's my pleasure, Brian. As you said, I'm a big fan of your work and the conversations you have. And I tip my hat to your audience because these are loan officers who are practicing with a growth mindset. Right. They're always trying to, uh, lever, um, up their business and their knowledge and what they can do for clients and referral partners. So it's a privilege to be here and it's a privilege to be able to speak with your audience.

Speaker A: Well, thank you. Thank you. And since you and I have been connected, it's been about a year, uh, in, in a more intentional manner.

Speaker B: Yeah.

Speaker A: Um, I've spent more time, not coincidentally studying this channel, this cohort, this segment. Even yesterday I was with, uh, a neighbor and we were watching, you know, the, the NFL or whatever, and he asked me a question. He's like, hey, what do you know about a reverse mortgage? And this was coming, I think, off of the last conversation you had. I said, I know enough to be dangerous, but I know smart people. I said, I learned something new about the chat, the product, uh, as a tool for purchasing a home. And I think you told me it's, you know, if someone, if I were to sell, by the way, I'm not of age yet for the, the fully qualified product. So I'm still working my way towards it. But if I were to sell my home and, you know, I'm sitting on this equity, this equity extraction, if, if I were to maybe downsize, because that's kind of a logical next step and buy something smaller, hopefully less expensive, and perhaps I could put 50% of the purchase price towards the down payment. I think you shared with me that I could use a reverse product again if I was eligible age wise and not have any payments for principal and interest going forward.

Speaker B: Correct. Yeah. It's so funny. So you and I, real conversation with the neighborhood and we're having more and more of these real conversations. I was with, uh, Rate is a big supporter of narap. I was there at the conference in San Diego this weekend. And so, um, I was sitting across from a $50 million producer at rate that I just met. And of course I'm the president of Reverse. And so the guy is Ready to be pitched. I was like, listen, I'm not here to pitch a product. Okay? He goes, okay, good, because now that I'm off the hook, but I do want to know more about reverse purchase. Like just. And so Brian, I walk them through the example. Okay. That basically the scenario which we see all the time, they're landlocked in that current home.

Speaker A: Yeah.

Speaker B: Maybe they have a great interest rate. Right. They're locked in that two and a half or two and an eighth or three, whatever it may be. Um, but they don't want it. That's, that's not where they want to spend 20 years in retirement. Maybe not near grandkids or uh, multi level. It's not set up to live there. So, so that, that's literally thousands of people in our families and our uh, networks are in that situation. And so I described this exact scenario and the light bulbs were going off. And I can see thinking through clients and referral partner conversations and I couldn't have asked for the universe to help out any more than it did here. As soon as we're done and he gets his head around it, a colleague who's another huge producer happens to come by and I introduce myself and he goes, oh, I just referred a client to one of your folks and I'm learning to ask questions. So instead of celebrating, I was like, well, tell us about that client. And it was, I want to downsize. I have 400,000. But the client wants to buy a $700,000 home. And we have some, you know, today's interest rates and homes, home values, affordability. So they start bumping up against tti.

Speaker A: Yeah.

Speaker B: DTI and, or they don't want to use all their cash because they, they want to shore up that retirement savings. And so you know, in his case that clients. And this is a live client now. Yeah, right. It was a great testimonial. And, and it just reiterated the example in the conversation you just had. Right. So $700,000 home, you know, they're putting roughly, I'd say safer bet is assumed 60% down. As rates come back down and, or the client's older, the loan to value start to nudge up. Right. So rates affect uh, the business just like any other mortgage business. Uh, but it was a great example and you know there are just, there are a tremendous number of examples of, of older homeowners. We think about this as 55 plus lending. So active adult mortgage lending. Um, who, who want greater optionality. It may or may not work as a financing tool, but this is about empowering loan officers. Like we think about your loan officers on the pod I mentioned. I'm a big believer in growth mindset, Always be learning. This is what happens when you raise seven kids. You have to always be learning or, uh, you fall way behind. Well, you know, every loan officer wants to know about the programs, the products, the uh, you know, the opportunities to serve more clients and more families. And in one way, reverse is just that it's know about the suite of products that's designed specifically for a massive demographic that's growing.

Speaker A: Yeah.

Speaker B: And a huge part of the mortgage and real estate business. So it's kind of common sense you'd want to know about it if you're a loan officer that wants to serve more people because the addressable audience is huge and getting larger every day. Um, but the industry, you know, you're going to mismo is about aligning conversation and data mapping and semantics. The reverse industry has been on such an island for so long. It's a complicated tool, but not as complicated as it feels because the semantics don't align. There are some different moving pieces that people have to be comfortable with. And so part of what we have to do is take some of the mystery out and mainstream it, um, and keep it as simple as possible but meaningful. Kind of tied into that client use case totally.

Speaker A: And I think, um, always be learning is such a, it's such an important mindset. And you know, putting myselves in the shoes of um, a loan officer, let's just say a loan officer who's been doing this for 20 years, two decades. Right. And at some point you're going to have a database of clients you've served in the past that are going to, that are going to come into this cohort, this segment. Whether or not, you know, they get a reverse mortgage or you offer them a reverse mortgage is not the point. But you, if you're, if you're truly going to serve your, your clients, your past clients and be a homeownership advisor. Yeah. You owe it to that client and frankly you owe it to yourself to understand all of the options available because they're going to go get the information somewhere.

Speaker B: Yeah. And I think there are some just, you know, I believe in algebraic givens. I tend to be a little left brain. I'd like to think I've learned to think about the people. Right again, back to the family situation. But I think at the end of the day, one of the givens to me is what you just talked about.

Speaker A: Okay.

Speaker B: Competition's Tight. It's very tough. Um, the willing learner loan officers, the true professionals in our business, mortgage and real estate. This goes for Realtors are using technology more and more to engage. Ah, this is your phrase that I've stolen. I love it because it's just so perfectly articulated at the point of thought. Right. And so how do you show up at a relevant point in the conversation in a competent way? And so more and more now you can use tech to help you time that out, but you have to now be that competent professional that's inserted into the conversation. And you also have to look at your addressable audience is shifting. Now clearly we know millennials and first time homebuyers, those are some of my kids. And we, you know, and we know there's a ton of education to do there and a ton of future business to do there. But you think about the addressable audience, like who do you serve today? And the average age. A lot of loan officers are in their late 40s or early 50s. Realtors, it depends on the study. But the average Realtor Is in their 52 ish, was 48 to 52 again depending on the study. So you think about who has the relationships out there in mortgage and real estate and what becomes relevant changes over time. And you know, one way to think about this business so you can get into product nuance, which is important and we'll talk about some of that. The big picture is, you know, there are 70 million, roughly 70 million older homeowners today that are 55 and over. Okay, 70 million million, yes. And they control upwards of uh, 14 more than 14 trillion in equity. Yeah, it's massive. So if you think about that population. And then let's just, um, this came out of a conversation at NARAP this weekend. So I'm just going to repurpose some of the light bulb moments we had. So think about last year, tough mortgage market, right. We had 4 million existing home purchase transactions rounded up another million roughly. Right. For uh, builder purchase. All in purchase transactions last year, roughly 5,5 million. Deal of that based on Nars report. So they publish a generational buyer sellers generational report every year. The 2025 report, which is mostly 2024 data, um, 70% of buyers. So 5 million purchases. 70% of those were Gen X or boomers and a little bit of silent generation, just to be perfectly accurate and how I don't misrepresent the study now with Gen X, you know, not all Gen xers are over 55. I happen to be some are a Little younger. So, so there's a little, you know, so there's a little bit of. So maybe it's not 70%, maybe it's 65%. Don't. It doesn't matter. 5 million transactions, 70% were Gen X or Boomer. That's 3.5 million transactions that were active against the population of 70 million. So there were 66M million people on the sidelines last year. Now, now why is that? Okay, and Obviously not all 66 million are going to be buyers. Right? Uh, but, uh, but they're in this demographic, they're sitting on housing wealth. A lot of equity life events are going on around them. Right? You guys track a lot of this in finlocker. And so is it possible that if you were a loan officer that was, you know, um, familiar with all financing options, especially reverse mortgage, which is designed specifically to serve that demographic cohort, could you have possibly served more people? Could you have helped your realtor serve more people? And we see those scenarios all the time. The answer is yes, because you create optionality for people and choice is always a good thing. So you think about, just, you think about. I love the numbers because it sizes the audience and then it shows that people are active and how many folks are just on the sidelines. And then the question is, you know, we know you and I talked about this at the beginning, we know some folks of that unserved tranche, that 66 million on the sidelines, we know some of them, it was over affordability, dti, high home values, inventory. Now we know all of these, including inventory is, they're all, it's all easing up. Okay. I'm a big housing wire follower. So you know, we, uh, Logan's work is complete and spot on in my view. Um, so we know some of these tensions are easing, but people are on the sidelines for a reason, right? Dti we also know specifically, and this is out of HMDA data, that in a lower rate environment, by the way, so the HMDA data would be even uglier today, that when you're looking at 65 and over applicants, 30% are declined for DTI alone of cash out refi and HELOC applicants. And so think about again, I'm locked in on the 66 million human beings who are homeowners who maybe wanted to participate, but we had natural barriers in the marketplace that none of us control, but we do control. Are we aware of products and tools that may be available designed specifically for the cohort? Um, where you don't have a DTI requirement because no principal interest payments are due. Now you do have to pay your taxes and insurance. And I would say we have a very light credit requirement because we do have to underwrite for your willingness and ability to pay tni. So if you're late on your real estate taxes or you haven't paid your mortgage.

Speaker A: Right.

Speaker B: We do get into. It's not fair to say we don't look at credit at all because we do. But FICO score doesn't matter the way it does in the, the traditional mortgage space. Um. And so being aware of the products is essential and it's not that difficult. Is like any other mortgage product. Being aware. Boy. I, uh, have financing options built for this cohort that don't require P and I payments is sort of enough. And then find a trusted expert like you do with everything else. Right. Who can help you decipher what's the why. What problem is your client trying to solve or your realtor trying to solve? Or what goal are they going after? Like in your neighbor's example, their goal might be to want to right size and short my savings and have no P and I payment. Um, and then figure out the why because that's what truly matters. And then just match the right solution to the why.

Speaker A: Yeah. I love that. And if only every loan officer took that approach regardless of the age of the, of the home buyer or homeowner. Right. It's find the why and you'll probably uncover a path to solve that problem that they have. Right.

Speaker B: Yeah. It's interesting. I might, I've been, uh, I'll just say more than three decades in financial services and half my career as a banker.

Speaker A: Yeah.

Speaker B: And it was great. I learned, I was, you know, my, I learned to run a business and a P back then it was still P and L and it was a hugely complex business. It taught me a ton. But it also. I got to see the commoditization business up close.

Speaker A: Yeah.

Speaker B: And I gravitated naturally to investments and small business lending and mortgage lending as a banker because it was less commoditized.

Speaker A: Sure.

Speaker B: Okay. And uh, eventually led me to move into the back half of my career has all been mortgage. And one thing I love about reverse mortgage lending and active adult mortgage lending specifically is, is the least commoditized type of business.

Speaker A: Yeah.

Speaker B: Because the, the, the emotional and the financial impact is palatable. The product doesn't sell itself. You have a real need, a real solution and you have a real impact. Not to say that's not true with first time homebuyers I remember my, how it felt when I bought that and walked in and you know I've talked to my adult children about buying a home and educated them. You just had you know we know that more you know people still believe you need 20% down even including my own kids by the way which was a fail as a parent. I've now corrected that with all of them. Um so that's fun too and it's, and it's meaningful work. Um that's a different audience and, and and adjust to the market opportunity. If you just you know look at your addressable audience and think about who the buyers are today and how do you serve more where walling yourself out off just to serve millennials uh could, could leave business on the table and and also um do your referral partners an injustice because you're not helping them sell more homes that they otherwise how do they, how do you help them convert non buyers to buyers and maybe free up inventory. We've had some of those nirvana transactions where you have like uh, someone like your neighbor there may be not a seller because of situations you, you discover optionality through reverse financing for purchase. You list the home, you buy a new home. You have to say that realtor sells ah that home to someone else. So, so and these are real life examples. This happens makes the realtor very happy and most importantly you have a, you have a client who's really happy because they've gotten their uh, they've gotten their goal accomplished.

Speaker A: Why And I think about, I think about that client and we all oftentimes we think about the first time home buyer and I'm gonna do, I'm gonna do right by them. I'm gonna you know get in early, educate, build loyalty and they're going to be this referral engine for me for the next 30 years.

Speaker B: Yeah, totally love it.

Speaker A: Do that all day long. Don't you know double down on that. But now imagine you're serving an active adult 60 something year old solving a real problem with a real solution. Now you think about that person, that individual's immediate referable sphere of influence. It's a lot bigger than that first time home buyer. It is.

Speaker B: Well and I'll build on that because this happens in reverse and it's exciting and it all roots back to trusting relationships. Right. So does the it like none of this really matters if the human beings don't have if they're not referable or have a trusting relationship with that client. Right. That's like you, you, you're all of your guests always start with that. And I think it's so true. And so I'll, um, I'll, I'll echo that or remind us of that and then build on like, none of this works without people and trust. Okay. It's just theory and data. You. But you take that conversation often adult children are involved in the transaction. Not all the time.

Speaker A: Right.

Speaker B: Uh, a lot of active adults. Okay. Are fiercely independent. M. More and more. So the old, you know, I would say the clients from 10 years ago, post World War II, silent generation, um, less, um, not always true, but, but less headstrong on this point. Would often involve family here. If you encourage your clients to involve the family, sometimes it's great. Sometimes you step on a landmine because they're fiercely independent. Right. And they're in their mid-70s, they grew up in the 60s and they have a handle on what they want to do. Okay. Um, but often we do get family members and financial advisors and CPAs or family attorneys involved in the transaction. And when you solve a problem and you've brought in constituents, other centers of influence for that homeowner and you put them in their dream home where it's a age friendly home so no falls and you know, slipping in the bathtub or going up and downstairs because falls in the home is a huge, uh, a huge problem for us. Creates 50 billion in health care costs every year. Falls in the home and the number one cause of injury and death. It's shocking.

Speaker A: Yeah.

Speaker B: Ah, for seniors. $50 billion medical price tag every year today. And so. And then families deal with the aftermath because there are unpaid caregivers or families often states away have to figure out, boy, how are we going to get in there and help mom and dad or grandparents. Um, so. But it's a family event often. And if you go in and you solve that and you put them into a great uh, you know, 55 and up community near friends and social life and independence. Or you modify the home so they can age in place safely. If they do want to age in place or tap the equity to maybe help a grandchild, there's a down payment on a, on a who is a new first time home buyer. You. The, the scenarios go go on and on and I would wager some of these resonate, if not all of them for your audience because. And they're realtors because we're all living life. We all have those neighbors. Right. And then you get in and you bring a solution and you make it easy and you solve that problem or help them Go after a goal, think about the referral partners that you have, an opportunity that now trust you explicitly and they've seen you in action. And it's even best because it's better because you stepped in with something that most people don't know about and everyone gets to have the light bulb moment and you're the person, the trusted guide who brought it to the table and helped solve it. So serving this demographic cohort to your point is a huge opportunity for referral business because you just build trust, um, the same way you do with first time home buying. But you build trust with folks who have a network who control equity and, and control, uh, other assets and have referral partners and you have an opportunity to do a great job for that client, but also get exposure to their trusted referral partner partner network, which is usually larger. And this was your point, Brian, than a millennial first time home buyer.

Speaker A: So I would be doing our audience and this podcast a disservice if I didn't reference the Rolling Stones behind you clearly. Clearly in the demogr.

Speaker B: Yeah, they clearly are. Now I'm not sure I can. I could sell Mick on one, but, uh, yeah, I love that. You know, it's funny, I. My one of my oldest daughter gave me that and I, and I framed it and I was trying to figure out where to put it in my little bitty office here and I stuck it there temporarily. But I've gotten so many comments on it, I left it. And then here's a funny story. Well, it's a little embarrassing. My, my daughter thinks it's hysterical. Um, so I was looking more closely at it about three months ago and it's 1990. I didn't go to that particular show, but it's 1990, uh, chore. And I was looking at. And I thought, oh, like my m. First concert was that tour. My first Rolling Stones concert was that tour in the US in New Jersey. And it was, it was 89. So it was like November, December of 89. And uh, so I'm having this light bulb moment about. Boy, that poster is even cooler now because it's like the first tour I saw and my daughter was here visiting and she lives in France now, my oldest. And she's like, why do you think I picked that particular one? She was way ahead of me. So we talk about being a willing learner and, and having your feet held to the fire, right? Uh, yeah, it's so. Thank you. I love it. And it's got some, uh, it's got some importance, some Relevance because of, uh,

Speaker A: where it came from for sure. So last question. I, I, you've been at the reverse space for almost two decades, right? Almost, uh, 18 years if I did my math correct.

Speaker B: You got it. Yeah. No in and out, I would say, which was, which was a, which was a gift. Um, because we learned, we were talking before about, uh, I originally got in to start and launch what was Countrywide's reverse platform. And you know, I had to Google the product like most people. The first time the recruiter mentioned, hey Country, I want somebody to go launch this thing. And I was like, never heard of the product. And I'd been around the block in banking and um, we launched that business was the bank of America business and then b of a MetLife, Wells Fargo, all the larger, I would say banks exited the space post the financial crisis. Um, and then I, I was in traditional mortgage lending doing a bunch of cool stuff which we talked about before we started recording. Um, but I love mortgage lending. And, and then in 2016 I made a decision to, to escape once more the, the big consumer bank environment. Um, not that it wasn't great for my career when I was building one and I met the founders of American Advisors group, uh, in 2016 and re underwrote the industry with a fresh pair of eyes, which was a gift being outside and looking in post the consumer safeguards that it went in after the financial crisis made the program a lot more scalable. And so coming in with a fresh pair of eyes to see the business has greatly informed a my passion and desire to get back into the and B, my view on the tremendous upside to serve more clients and really nudge the industry forward in, um, how we market and position ourselves, who we serve and how we serve and how we partner with the rest of the mortgage business, whether it's the MISMO working group we have, or we now have a reverse mortgage Advisory council with the mba. And so we're doing all of these things that you think, feel really intuitive when you say them out loud. Wow. Like, you guys didn't do that all, you know, for 20 years in the industry. But, you know, it is what it is. We, we didn't and now we are. And that's why I'm, I'm really excited. It's a great time for a lot of reasons for loan officers to begin to understand the programs. The, we talked about the addressable audiences there. No doubt. Yeah. Um, and the programs are more diverse and, and flexible and safer than, than ever. Uh, and we're beginning to mainstream and how, uh, we weave ourselves into the broader mortgage market, which is super exciting.

Speaker A: Well, Jesse, I'm, I'm excited for the channel. I'm excited for, uh, the audience that's going to learn a little bit more about this active adult space, this, this reverse lending business. And I appreciate you, you know, sharing your knowledge and expertise with the, uh, the audience today.

Speaker B: It was a pleasure. I appreciate the opportunity to be here. And, uh, I'm not hard to find. If any of your listeners, uh, have questions. Even if you don't work for rate, it's okay. Um, we're trying to be a force for good at the industry level. Um, so feel free. Uh, all joking aside, reach out, uh, we have perspective on the business. I'm happy to field any questions. I help with client scenarios all the time that come my way. Um, we have good, deep relationships in the industry. Um, and so we can certainly be a resource to anyone out there who, who needs it.

Speaker A: Love that. We'll put all your contact info in the show notes. So, guys, you can scroll down in the show notes. Get, uh, get connected with Jesse. Jesse, thank you again so much. And, uh, to the audience, we appreciate you tuning in every week. And, uh, come back next week for the next episode of Loan Officer Life Hustle.

Speaker B: Thank you so much.

Speaker A: See you, Jesse.