Open Mortgage, an Austin, Texas-based multi-channel lender, laid off roughly 24 staffers in its forward mortgage division last week as it works to weather a challenging mortgage market. However, the company is also demonstrating confidence in its reverse mortgage segment, as a company leader made a recent appearance to talk about the product category on a nationally-syndicated television talk show.
The size of Open Mortgage’s reverse mortgage division has also grown larger in comparison to the forward side, with the retail reverse mortgage team doubling by the end of the third quarter in 2022, according to Scott Gordon, the Open Mortgage founder and CEO. Company leaders expect that team to triple by the end of 2023.
Reduction in forward footprint
Gordon said that last week’s reduction in force (RIF) applied primarily to wholesale operations and forward mortgage operations personnel. The total number of affected employees was approximately two dozen, he said.
“These reductions are all tied to the market downturn that everybody’s unfortunately experiencing,” Gordon told RMD. “We’re trying to be the adults in the room and keep everything scaled.”
Gordon said that displacing employees is always a difficult choice, but reiterated that the issue was not related to performance, but to the reduced market.
“It’s probably around two dozen, which doesn’t sound very big compared to a lot of companies,” he said. “But we feel like when you’re one of those people, it’s horrible. The people who were RIF’d today or received a reduction in hours, there was no performance problem. We’re just dealing with the reduced market, and that’s always sad.”
Gordon said he is expecting some rocky times ahead in the mid-term, but is looking to stabilize business in 2023.
“Our thinking from what we see — and of course, we’re watching every piece of news out there — Q4 will continue to be down,” he said. “Q1 [2023] will probably be down. But, I’m pretty bullish about Q2. I think it’s a weird market that will be hard for a little while, but we just have to live through it while inflation gets broken. If you’re watching the news, [the Consumer Price Index (CPI) recently] came out lower. I expect in the next few months, that’s going to happen again.”
Tripling down in reverse
When it comes to the reverse mortgage division, however, Gordon sees a different story unfold with staff, and says that the hiring on pace will continue at least through the end of 2022.
“The good news is that since the beginning of the year, by the end of Q3 we had doubled the size of our retail reverse teams,” Gordon said. “And with the people coming over now, we should easily have tripled by the end of the year. That is part of my sunny outlook for Q2 2023. We know it takes people a while to get going, and in reverse, it’s hard right now, as is traditional. But we also know we have great turn times and the team has been building, so that’s pretty good.”
Gordon also spoke about the sustainability of recent hirings — and whether or not future RIFs will be necessary.
“I think [things are] stable with respect to the hiring activity,” he said. “As we’ve balanced forward and reverse recently, we’re taking into account all this growth that we’ve been having in reverse. To make sure we can keep having great turn times. I just think reverse and forward both have to live through this next three to four months. Reverse mortgage has been a great hedge for us that balances out when times are tough in forward. It’s been great having both.”
New initiatives
Gordon also noted that there’s a new education and advertising initiative for Open Mortgage’s reverse business, one which led to the company’s chief revenue officer, Scott Harkless, appearing alongside talk show host Montel Williams.
“We were invited to be the exclusive reverse mortgage partner for their show called ‘The Balancing Act’ on Lifetime, and we taped a segment that will air on Lifetime on Monday,” he said.
The segment aired Monday morning at 7:30am EST and is scheduled to re-air in the same time slot on Tuesday, November 22. It will be shown in hundreds of local and regional markets starting in early 2023.
Open mortgage has also launched a new consumer-facing reverse mortgage website called OpenReverse.com.
“[The website] is a consumer-centric educational website with a reverse mortgage calculator, educational videos, a digital reverse mortgage research guide and more,” said Adam O’Daniel, Open Mortgage SVP of marketing.
Gordon said that the partnership came about after program’s producers reached out to the company.
“They reached out to us about the possibility of doing that kind of segment,” Gordon said. “So then, we designed the content with them, how to make it help dispel the myths, and just help get more information out about reverse.”
Harkless said that this marks the beginning of the company’s new brand awareness outreach goals.
“Sharing our story and the benefits of reverse mortgages with Montel Williams will help many more seniors unlock the benefits of home equity in their retirement strategy,” Harkless said. “Montel and his team are passionate about education and helping their viewers make sound financial decisions. It’s a great fit for our brand, and it provides our reverse sales staff with a powerful tool as they look to serve more families in their communities.”
