Ryan Ogata has been leading the reverse mortgage division at Rate — recently rebranded from Guaranteed Rate — for roughly a year, but the division has seen notable growth during that time.
According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI), the company grew its endorsement volume by roughly 870% year to date through July, as noted by RMI’s Jon McCue in a recent interview with HousingWire’s Reverse Mortgage Daily (RMD).
To better understand the trajectory the company has been on, Ogata recently sat down with RMD to discuss the dynamics of Rate’s reverse mortgage business and how its growth has been playing out during his time at the helm.
Learning and growing
Ogata came from the forward mortgage business. He notes that while he has learned a lot about the reverse channel’s unique attributes, there are a lot of similarities between forward and reverse lending.
“One similarity is that the forward space is something of a zero-sum game,” Ogata said. “Every company is competing for their slice of the pie, their share of the mortgage market. For example, when rates move in our favor, there’s a predefined business opportunity: Every customer with a higher note rate on their mortgage in the forward space becomes eligible for refinancing. Every company then tries to grab as much of that market share as possible.”
There has been recent growth for reverse divisions inside forward-centric companies, with growth being particularly evident among leading lenders that have made major acquisitions that include reverse mortgage divisions. Examples include Cherry Creek Mortgage’s reverse division being acquired by Guild Mortgage and Movement Mortgage hiring well-known reverse mortgage leaders.
Ogata has taken notice of these dynamics.
“I was reading an article that noted how other companies are experiencing success by growing their reverse departments, but they seem to be doing it with a forward-like strategy,” Ogata said. “They recruit an existing team that’s already doing reverse mortgages from another company, or buy that company. Is that really growth? In reality, they didn’t create a market or change anything for the industry at large — they just took originators who were already producing under a different name.”
At Rate, Ogata said the growth hasn’t come from recruiting existing reverse mortgage professionals, but the company also isn’t averse to doing so.
“In my opinion, we weren’t ready to do that,” he said. “We didn’t have a value proposition because we were coming into the space with comparatively less reverse experience or production under our belt. Why would anyone be interested in joining our organization when we had no value to add? But here we are, doing it on our own without bringing in a team that already had a book of business.”
Because of that, the value proposition has changed, he added.
“I would like to think that we now have something of value to offer a reverse originator,” Ogata said. “We are now actively marketing the product to a wide range of customers and referral partners.”
Rate’s forward loan originators are seeking reverse sales opportunities, which Ogata said speaks for itself.
“This aligns with what I originally talked about when I took this role — a market creation opportunity,” he said. “We’re not benefiting from the preexisting, zero-sum game of the reverse space, where companies just take originators’ employment. We’re going out and trying to find customers who maybe wouldn’t have considered a reverse mortgage if it weren’t for our marketing efforts and what we’re trying to accomplish.”
Leveraging the ‘forward machine’
When asked about the kinds of LOs that he has brought into the reverse division at Rate, Ogata said that the division is accomplishing its growth primarily from those serving in a support capacity, since the reverse division does not have an abundance of dedicated LOs.
“The way we’ve architected things at Rate is by choosing to leverage the existing forward machine,” Ogata said. “It’s arguably one of the most productive sales forces in the entire industry. We’re trying to get them focused on the reverse opportunity — how it helps the right buyers and retirees as a good product — and really have them be the sales force that understands reverse mortgages. They need to present it as an option when it makes sense for someone who is age-appropriate.”
When a deal emerges, an inside sales team helps structure the transaction, which benefits from the support-minded approach.
“The inside sales team can help communicate with the customer about aspects that the forward loan officer might not be able to convey due to a lack of experience,” he said. “So, we’re building a robust support structure rather than trying to get our own reverse loan officers out in the field selling reverse mortgages.”
As a relative outsider when taking the reins of the division, Ogata had a lot of learning to do. His 20 years of forward lending experience helped to craft his approach to reverse, he explained.
“I’ve been a forward guy for over 20 years, up until this last year in reverse. That’s where I was familiar, and it made me, I guess, the optimal choice for a company like ours, which is focused on enabling the forward sales team to offer reverse mortgages as part of their product offering,” he said. “We’re incorporating it into their standard business, rather than seeing this bifurcated landscape where you’re either a reverse person or a forward person.”
That background helped him craft an approach where he could build a mortgage team with a particular goal in mind, but a lot of learning along the way has been necessary, he said.
“It hasn’t been an easy path. I’ll admit, I probably thought it was going to be easier than it’s turned out to be,” he said. “But, like anything, from hard work comes results, and I’m really happy to see what we’re accomplishing.”
