When it comes to marketing mortgages with postcards, I have shifted into another gear—“R” for Reverse.
For almost four decades, I’ve targeted 30-year fixed and adjustable mortgages with postcards sent to past and prospective borrowers. Some had interest rates as high as fixed at 16 percent or adjustables at 11 percent (in the 1980s). Our goal was simple: Get them to call us to see if it made “dollars and sense” to refinance.
It’s not much different today as I target reverse mortgage refinance and purchase customers. We’re informing borrowers who are 62 years or older how a reverse mortgage might work for them in purchasing their next home.
Over 62 homebuyers have been paying “all cash” to keep from having monthly mortgage payments. With the reverse mortgage purchase, they typically can make a 40 percent to 50 percent cash down payment and finance the rest with a reverse mortgage—and still not have a monthly mortgage payment.
In these tight times, homebuyers over 62 can buy a $300,000 home with $150,000 down and a $150,000 reverse mortgage. They would have $150,000 left to live on and wouldn’t be writing a mortgage check every month as long as they live in the home. In addition, they don’t have to qualify based on income, employment or credit. You verify the down payment and appraise the home and you’re pretty much done.
That’s the focus of our postcard campaigns that we’re aiming at seniors and Realtors. I am using three different postcard campaigns with varying success:
#1 — Taking a page from “financing flyers” we provide to Realtors and FSBOs, we mail 10 financing postcards in a bright red envelope to Realtors who have listings in “Over 55 Years Old” communities. The postcards feature a color photo of the Realtor’s listing and a headline of “No Monthly Payments!” along with the address. Realtors then place these postcards at their listings for showings and open houses to let prospective buyers know that with a reverse mortgage they don’t have to pay all cash to have “No Monthly Payments!”. Of course, the postcard refers to me as THE source of this reverse mortgage with a tagline: “Yes, Demas Knows How!”
We’re mailing out 50 red envelopes a month to Realtors and follow up with e-mail and telephone calls. This plants the seed of possibilities with Realtors and nets us one reverse mortgage a month.
#2– Again targeting Realtors for reverse mortgage purchases, we use a postcard format e-mail blast to Realtors every month to say: “I Didn’t Know You Could Do That!” followed up by a bold headline that proclaims “No Monthly Payments!” and mentions this is without paying all cash. We use the tagline “Demas Knows How” again to let Realtors know who they can call.
This goes out to about 6,500 Realtors every month (at a cost of $65) and yields five to 10 inquiries per month. I recently had my best month ever on this one, resulting in two reverse mortgages.
#3—Targeting new homeowners, we send postcards to 100 recent buyers in “Over 55 Years Old” communities every month. The postcard says: “Picture Your New Home with No More Monthly Payments” and includes a color photo of their new home on the front side of the postcard. We’re seeking those buyers who could have purchased with a reverse mortgage, but for some reason didn’t know about the possibility. We send the same postcard to each prospect four times— three times in the first 30 days and once more a month later.
We get about three inquiries for every 100 cards we send and close one reverse mortgage every other month on this effort.
In all of our postcard marketing we try to point out the necessary qualifications of the reverse mortgage– which are virtually none. There are no income, job, or credit requirements. In fact, there have been some cases where borrowers with foreclosures or bankruptcies in recent years can still qualify. (The age of the youngest borrower (must be over 62), current reverse mortgage interest rate and FHA appraised value combine to determine how much can be borrowed on a reverse mortgage. On purchases, that’s typically 50 to 60 percent of the sales price. FHA limits apply. On refinances, Reverse Mortgages are typically 50 to 70 percent of the FHA appraised value.) The single most important qualifying factor is the FHA appraisal.
We also point out the three types of reverse Mortgages available to borrowers. For refinances, these include a lump sum, a line of credit, or a monthly income. Purchases are a down payment with a lump sum from the lender as the initial reverse mortgage amount.
One other note. With Wells Fargo and Bank of America opting out of the reverse mortgage market, opportunities for small lenders and brokers have opened up considerably.
You need to constantly be educating Realtors and borrowers on how these reverse mortgages work. Much of your time will be spent on overcoming the “myths” that surround it. Recent changes have reduced fees significantly and make reverse mortgages very affordable to seniors. You just might be one postcard away from your first reverse mortgage origination
Written by: By Demas Lamas
Demas Lamas is a Reverse Mortgage Planner at Jacinto Mortgage Group, Pleasanton, CA.