Larger Market = More Qualified & Interested Borrowers
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It’s a marketshare problem. As an industry we have been negatively impacted by falling home values, cuts in lending ratios or principal limits, elimination of products and borrower qualification guidelines. In 2009 over 114,000 reverse mortgages were endorsed versus only 54,000 in 2012. Consequently we can easily point to any of these factors as the leading cause of our lack industry volume. But are we not seeing the forest through the trees? One well-respected industry leader told me “I don’t want a bigger piece of the pie but a bigger pie itself”. Otto Cushman, CEO of Liberty Home Equity Solutions was quoted in Reverse Review’s article entitled “Extreme Summit” saying “ Less than 1% penetration, We are failing”. He backs his assertion comparing 50,000 endorsed loans in 2013 to 200,000,000 [correction made from 200,000] qualified senior households with sufficient equity equally a paltry one quarter precent of available marketshare. It’s boils down to the law of numbers. The same principle that motivates us to look at how many leads it takes to generate X amount of loans per month should be our approach to marketshare. More positively interested potential borrowers equals more loans. So where do we beign?
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