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Reverse mortgage industry conferences are often seen as an effective way for professionals to meet up, discuss best practices from across their markets and assess the regulatory environment at entities like the Federal Housing Administration (FHA) and within the states.
Occasionally, U.S.-based reverse professionals also get the opportunity to connect with practitioners in other parts of the world, which was the case at 2024’s National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in San Diego last September.
HousingWire’s Reverse Mortgage Daily (RMD) had a chance to meet up with Medina Cicak, Heartland Bank’s chief commercial officer in Australia, and Keira Billot, the New Zealand-based general manager of retail and reverse mortgages.
Why make the trip?
In an interview held in late January, the pair discussed some of their observations about the conference, American industry professionals and some of the talked-about business elements from the event and other areas of similarity and difference. The first key question came down to why they would choose to make the long journey, since flying from Auckland to San Diego takes more than 15 hours if you’re fortunate enough to fly direct.
“We came to the conference because we wanted to connect with the U.S. market to learn more about the product offering and criteria, the distribution and marketing methods and the future innovations that are planned to support the retirement funding industry in the U.S.,” the pair said.
Heartland is a longstanding company, with roots going as far back as 1875. Heartland Bank is based in New Zealand, and serves as the arm that offers reverse mortgages to older populations there and in Australia. Part of the desire to learn came from the larger reverse mortgage market in the U.S. when compared to those in New Zealand and Australia, they added.
“The reverse mortgage market in Australia and New Zealand is small compared to the U.S.,” they explained. “We have worked hard in each country to build a solid reputation for the product. Heartland has offered reverse mortgages in Australia and New Zealand since 2014 and is the largest provider of reverse mortgages in each country.”
But it’s also a growing market, the pair added. Both the New Zealand and Australia reverse mortgage businesses have experienced growth of roughly 20% each since that first year, and gaining further insight into the way the U.S. market has evolved could be helpful as they navigate their own market, they said.
Product similarities, differences
While there are several broad similarities between the New Zealand/Australia reverse mortgage product and the predominant program offered in the U.S., the regulatory presence in their markets are generally less strict. New Zealand includes more voluntary guidelines. In Australia, reverse mortgages are subject to the National Consumer Credit Protection Act (NCCPA) which comes with borrower protections such as lifetime occupancy and a “no negative equity” guarantee.
In New Zealand, the products are bound by the Credit Contracts and Consumer Finance Act 2003 (CCCFA), which the pair says “protects the interests of consumers in connection with credit contracts, consumer leases, and buy-back transactions of land” despite not having a specific reverse mortgage provision. Also at play in New Zealand is the government’s Ministry of Social Development, which established non-binding guidelines for reverse mortgages in 2008. Heartland complies with these guidelines, they explained.
The company also requires clients to seek out independent legal advice to ensure full comprehension of the product’s requirements, aiming to fulfill a similar function to the stateside counseling requirement. But you don’t have to look very far for differences between their market and the U.S. counterpart.
“The range of products offered was probably the biggest difference,” the pair said. “The HECM for Purchase in the U.S. is marketed to real estate agents to help people buy homes,” and no equivalent product exists in New Zealand or Australia, they said. The amount of HECM for Purchase material at the event was striking to the pair, but the variety of players in the U.S. relative to the other two nations also stuck out.
“In New Zealand, there are only two main providers of reverse mortgages, both are banks,” they said. “Heartland Bank is the largest provider by a vast majority. The main distribution channel is direct-to-customer, however there are some brokers that also refer customers.”
In Australia, Heartland is one of 11 reverse mortgage providers, and applications that come through brokers “are typically presented to a panel of lenders and customers choose the best product for their needs,” the pair said.
Getting the word out
The pair added that they were also struck by the different tacts the U.S. industry takes with marketing reverse mortgages to potential clients.
“[R]everse mortgages are marketed so differently in the U.S., in the way that they’re compared to a standard mortgage, highlighting the overall cost benefit,” they explained. “This is not common in Australia or New Zealand. And although the purpose of the product is somewhat different in the U.S. […] this approach to marketing is potentially something for us to consider exploring.”
Different nations can take on vastly different approaches to marketing their reverse mortgage products. Even in North America, the overall tonal differences between many of the most prominent and visible reverse mortgage commercials in the U.S. can be very different from the tones explored immediately north of the border.
HomeEquity Bank, based in Toronto, Ontario, demonstrated this with advertising presentations at prior NRMLA events, showcasing a more fun, somewhat rebellious emphasis for Canadian seniors who are determined to age in place.
HomeEquity bank has also taken novel approaches by hiring familiar media personalities to older Canadians, including a longstanding national news anchor as well as an American former conman-turned-security consultant whose story was the basis of a popular Steven Spielberg movie.
