Rate’s reverse mortgage leader on product specialization and growth

By maintaining a consistent posture that is informed by the dynamics of the traditional forward mortgage business, Rate’s reverse mortgage division has seen notable growth in the year after the appointment of new leadership.

Ryan Ogata, Rate’s executive vice president of reverse mortgage lending, previously described how his experience in the forward lending business helped to inform the way he approaches reverse. In this second part of his interview with HousingWire’s Reverse Mortgage Daily (RMD), Ogata describes his plans for building on the prior success of the division and how it’s preparing for the possibility of lower rates this fall.

Moving forward in reverse

Ogata further described his approach to leading the division by saying that it was informed by the research he performed prior to taking the reins last year.

“Before I even accepted the role, I did some analysis of the business,” Ogata said. “A big part of that was looking at the size of the existing sales force actively selling reverse mortgages. Our analysis showed that there were fewer than 500 originators doing, on average, at least 20 loans annually. In forward terms, that’s not a lot of business, but in reverse terms, it’s actually pretty good, relatively speaking.”

Ryan Ogata

But considering the size of the addressable market and the projected growth of the senior demographic in the future, that is not enough to fully serve the potential clients who could qualify for reverse mortgage financing, Ogata said. The baby boomer generation on its own represents as much as 20% of the nation’s population.

“When you consider the size of that market opportunity and the fact that there’s an 80% homeownership rate among boomers, 500 people aren’t going to make a dent in what’s available out there,” he said. “It needs a larger sales force, and that’s going to come from the forward teams — those on the forward side of the business learning to fully embrace reverse mortgages as part of their overall product offering.”

Leveraging existing personnel with experience, even if it comes primarily from the forward lending side, allows the reverse division at Rate to scale more effectively, Ogata explained.

“The mortgage business has always been a numbers game,” he said. “The number of loans you’re going to fund is based on how many leads you bring in. With the approach we’re taking, the only way we’re going to penetrate the market opportunity is by getting our existing sales team — which is already a pretty successful and large one — focused on the reverse opportunity and folding it into their overall offering.”

The client, Ogata said, will not discern between a forward and reverse loan officer. Instead, they want a professional who can “prescribe the appropriate product for what the client is looking to achieve,” he said.

Specialization vs. diversification

Ogata does not think of reverse-oriented work as “specialization,” he said. Instead, he views it primarily as a matter of product diversification among the professionals who work for Rate.

“We’re not moving away from forward, but we’re adding to it,” he said. “I can keep my forward business that I’m used to, but that doesn’t stop me from offering another product as an alternative. It’s about learning that product, understanding when to apply it and when not to. It’s less about specialization and more about having a broader product offering and learning to sell something different while being deliberate about how to execute on that market opportunity.”

As an example, he floated a scenario in which the LO who worked with a client on a forward mortgage might be the preferred option for the same person seeking a reverse mortgage. The way that Rate’s reverse division seeks to work helps to make that possible.

“Maybe, just by chance, some of that is happening now that we can sell it,” he said. “But the numbers show that the team is being deliberate in their actions and their intent to go out, find this business and sell it to consumers who might not have considered it previously.”

Support with ’finite resources’

When asked about the corporate support Ogata is getting from Rate, he expressed satisfaction, since it seems to him that the company views this business line as a priority for growth.

“The support has been great. In my position, you always want more, but I have to be realistic with our finite resources.” he said. “But they have been extremely supportive. The marketing materials, the presentations, the continuing education, all of that was a team effort. There’s no way one person could do it all on their own.”

That support was one of the things that helped Ogata to see this as a career step worth taking, he explained.

“When I was considering the opportunity, that level of support obviously played a big factor,” he said. “The company already had the resources needed to go out and execute on something like this. They’ve been extremely supportive, although you always want more, but you have to be realistic.”