Credit unions missing reverse mortgage demand, executives say

Kamler pointed out that in the past 12 months, credit unions accounted for only 81 of the nearly 36,000 reverse mortgages originated nationwide. This figure is particularly small given that approximately 55 million credit union members are eligible for such products.

One significant hurdle is that many potential borrowers are unsure where to start. Bartholomew explained that Mountain America began offering reverse mortgages after members approached the credit union with external quotes and questions, seeking trusted advice. "They trusted the credit union to help them and advise them as what to do," Bartholomew said, noting the high fees charged by external providers.

Mountain America initially had one reverse mortgage loan officer, and after that employee’s passing in 2011, they hired another. By around 2015, the credit union started training all its loan officers across branches to discuss reverse mortgages with members. Currently, loan officers and branch employees are trained to identify members who might have questions and direct them to appropriate resources.

Kamler added that a broader challenge involves front-line staff, such as tellers and call-center employees, who may not be equipped to answer reverse mortgage inquiries, sometimes incorrectly stating the institution does not offer them or advising members to search online. This can create a disconnect for older homeowners.

Furthermore, Kamler noted a shift in how reverse mortgages are perceived and utilized. "Twenty years ago, it was only for someone who’s out of money. It was a last resort program. Today, reverse mortgage is completely different. We’re serving members that are using it as a financial planning tool," he stated. Borrowers are increasingly using reverse mortgage lines of credit as part of their retirement strategy, benefiting from features like a growth option, though availability can be influenced by interest rates and loan terms.

For credit unions lacking in-house expertise, Kamler suggested partnering with specialized reverse mortgage companies as a viable option to serve members. The executives stressed that enhanced education is crucial for credit unions to capitalize on their aging membership, with Kamler concluding, "There is a tremendous amount of room for improvement."