HomEquity’s broker driven originations increased 20 per cent last year, outpacing its 17 per cent increase in business overall.
“A lot of brokers are feeling the pressure from banks and are not seeing as much growth as previously. They are looking for ways to increase their business. Reverse mortgages is a small but important portion of that,” said Greg Bandler, senior vice president of sales and marketing. “We have appreciated the professionalism of the brokers we’ve worked with. They are very much business and client driven.”
The 2011 increase, according to the company’s annual financial report, followed a banner year in 2010 with the broker segment increasing 110 per cent for the reverse mortgage specialist while business overall increased 87 per cent.
Improved awareness and education about HomEquity’s products had driven the increase, Bandler told MortgageBrokerNews.ca. The company had been contacting brokers directly, including attending broker events, to inform the industry about reverse mortgages.
According to Bandler, brokers often referred senior clients directly, but could also find that younger clients with concerns about their parents’ financial situation were interested in learning about reverse mortgages.
Criticism from some members of the industry that reverse mortgages were an expensive alternative to HELOCs stemmed from lack of understanding of the differences, Bandler said.
“In the short term HELOCs are great for people who can pay the interest and will eventually pay off the debt. With reverse mortgages there is no requirement to make interest payments unless they choose to until they decide to sell or move,” he said. “It’s a long term option for people who have been in their house for 20 or 30 years and have seen substantial appreciation.”
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