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6 Tips to Survive a Diabolical Mortgage Market

6 tips so survive an ugly housing mortgage market

You may not be originating traditional or forward mortgages as HECM professionals are prone to call them but the impacts of skyrocketing mortgage rates and a fragile housing market on reverse mortgage lenders cannot be denied. 

Today homebuyer demand has been effectively squashed with the average 30-year mortgage rate more than doubling since the beginning of the year. Consequently, home sale prices are rapidly falling in several markets across the country. Closer to home, the 10-year Constant Maturity Treasury (CMT), which along with the lender’s margin determines how much money a homeowner may qualify for in a Home Equity Conversion Mortgage (HECM) loan, has skyrocketed from .54% in early March 2020 to 4.17% on Friday, November 4th. 

All this leads to the question, how can an originator increase their odds of survival in an abysmal market? 

Here are some survival tips curated from some of the nation’s top traditional and reverse mortgage producers. 

  1. Increase your prospecting activity. Higher rates and lower home values mean fewer homeowners will qualify. Increase your odds by increasing your outbound sales efforts. The more outbound contacts, the more potential qualified leads you’ll generate.
  2. Consider focusing your efforts on markets where home sale prices are not dropping considerably. Choosing markets with fairly stable or moderate declines in the median home price may reduce the number of homeowners ‘short to close’. One tool you can use can be found on Redfin’s Data Center. 
  3. Renew or start network marketing in earnest. If you’ve never built a network of professionals who cross paths with older homeowners now’s the time to start. If you’ve neglected your interactions with other service providers in your market schedule regular phone calls, prospecting, and meetings with area experts. Many of their clients are feeling the pain of inflation or investment losses and they need solutions.
  4. Consider holding public workshops. Get creative and incorporate inflation and home equity into a compelling public presentation. As always, get compliance approval before advertising or hosting an event. 
  5. Call your previous borrowers. Ask how they’re doing, if there’s anything you can help them with, and if they can recommend a friend or family member who could benefit from tapping into their home’s value with no required monthly mortgage payments. 
  6. The HECM as a HELOC alternative. Besides higher interest rates more are finding that qualifying for a home equity loan has become difficult with banks tightening their credit standards. Homeowners with substantial equity could benefit by taking a HECM line of credit, which, unlike a bank HELOC, cannot be frozen or reduced merely because of falling home values.

There’s no silver bullet for an ugly market, but there are certainly some strategies that may help you endure, survive, or even grow. 

What tips would you add for reverse mortgage professionals to increase their odds of surviving today’s housing and mortgage market? Share your ideas in the comment section below.


Editor in Chief: HECMWorld.com
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.

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  1. Other things to remember is to connector your “WHY.” Why did you get into this reverse space? What as the fire in your belly that drove you here?

    Shift your mindset and remember your “Lion and Bear Stories.”

    Stop thinking that your a victim of the market and change your actions instead of just giving up.

    Staying active builds confidence and leads success.

    Let the other unfocused people flounder while you pick up market share.

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