Reverse mortgage leads have been a solid source of business for lenders in California. Despite unique rules and restrictions, many lending institutions in the Golden State are having a lot of success with reverse mortgages in 2019.
Is the outlook for reverse mortgage leads in California as strong for the rest of 2019 and beyond? Let’s take a look at the facts and determine what might be the best strategy for lenders moving forward.
Generating Reverse Mortgage Leads in California Despite Restrictions
First, let’s review the rules and restrictions related to reverse mortgages in California.
According to the Reverse Mortgage Elder Protection Act of 2009, reverse mortgages in California must have adjustable or fixed rates of interest. Additional stipulations include:
- The lender is allowed to charge fees at the origination of the loan, during the loan period, or when the loan has fully matured.
- If the borrower receives his or her reverse mortgage money in the form of periodic payments, the lender is not allowed to reduce payments based on interest rate changes.
- A lender who fails to keep up with loan payments is liable up to 3X the amount of the balance, plus interest.
- Lenders may not penalize a borrower for prematurely paying off the loan.
California’s act also requires lenders to provide borrowers with at least 10 options for financial counseling. The counselors must be federally approved, non-profit providers.
Counselors are not allowed to receive any indirect or direct payment from anyone involved in originating the reverse mortgage loan.
The lender provides the borrower with a checklist of potential reverse mortgage pros and cons to discuss with the financial counselor. The application process cannot be completed until the prospective borrower certifies that he or she has received counseling.
“Entanglement” is another stipulation in the Elder Protection Act in California. This refers to the fact that lenders are not allowed to make a reverse mortgage contingent on the prospective borrower purchasing another good or service. For instance, a reverse mortgage loan can’t be incentivized based on the borrower also purchasing an annuity.
Despite all these regulations, reverse mortgages have remained popular in California. For many lenders, keeping a steady stream of reverse mortgage leads flowing in is a big part of their success in 2019.
However, if restrictions are to strengthen in California or at the federal level, that might put even more pressure on the reverse mortgage industry.
The Outlook for 2018 and Beyond
With news coming out this week that the Trump administration plans to put new limits on reverse mortgage lending, some lenders are worried about the long-term picture.
Even if changes are afoot, they will likely take months if not years to enact. Rather than sitting back and waiting to see what happens, lenders would be wise to step up their reverse mortgage lead generation throughout the rest of 2019 and into 2020.
As the saying goes, make hay while the sun is shining.
The best way to ramp up your lead gen in a hurry is to invest in exclusive, live transfer reverse mortgage leads from Elevated Perspective Marketing.
To learn more about how we can send verified, eligible prospects directly to your sales agents via conference call, or to talk about the future of reverse mortgage leads in California, call us at 877-959-8044 today!
We’re based in San Diego, California, and we’re experts in reverse mortgage lending!