When reverse mortgage professionals from Australia and New Zealand made the long journey to San Diego last year to attend the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo, they were ready to learn about the core differences between the businesses in a different part of the world.
What they found was a product type that had yet to reach their shores in the form of the Home Equity Conversion Mortgage (HECM) for Purchase (H4P). They discovered a high level of government involvement and a host of industry participants eager to chat with their professional counterparts from thousands of miles away. And they also said that a partnership between their company and some of their American counterparts could be possible.
These are some of the elements that Medina Cicak, chief commercial officer for Heartland Bank in Australia, and Keira Billot, the bank’s New Zealand-based general manager of retail and reverse mortgages, discussed in an interview with HousingWire’s Reverse Mortgage Daily (RMD).
U.S. government involvement
The NRMLA Annual Meeting in September 2024 featured several guests from the federal government’s housing arm, the U.S. Department of Housing and Urban Development (HUD). Key to this presence was then-Federal Housing Administration (FHA) Commissioner Julia Gordon and David Berenbaum, HUD’s deputy assistant secretary for housing counseling.
This level of government involvement and interaction, the Heartbank Bank officials said, was a surprise compared to the way business is conducted in their part of the world. While the Australian government offers a product called the “Home Equity Access Scheme,” it has far different governing requirements and is typically seen as an option for an older homeowner who might have more modest needs.
It has a minimum age requirement of 67, and it has seen a skyrocketing level of uptake over the past several years (768 participants in 2019 compared with more than 12,000 in March 2024).
Meanwhile, a reverse mortgage in the region is accessible to homeowners as young as 55 and features a far larger amount of potential proceeds. These are determined by the age of the youngest borrower in the household.
Stateside government engagement
Still, the amount of information that Cicak and Billot gleaned from the HUD officials in attendance made an impression, they said.
“We were impressed in learning the level of engagement from government on reverse mortgages, and the required regulatory protections and functional support mechanism to support customers, such as the financial counseling services,” they explained.
Lenders in their part of the world generally handle these conversations more directly to ensure understanding of the requirements. There is also a requirement that a client must seek independent legal advice before taking out a loan. Financial advice is not insisted upon but is recommended in consultation with trusted advisers like family members.
But the pair appreciated the chance to engage with U.S. government officials on the topic of reverse mortgages, they said.
“Speaking with the government officials regarding their policies was a huge highlight for our business,” they explained. “Understanding their impact in the market has provided us significant insight. Also, meeting system providers like HECM Toolbox who have developed specific products to improve the reverse mortgage market was great.”
Partnership possibility?
When asked whether they saw any potential for partnering with the American reverse mortgage industry, Cicak and Billot were enthusiastic about the idea.
“We think there is significant opportunity in both markets and there may be the potential for partnering in the future,” they said. “As the leading providers of reverse mortgages in both Australia and New Zealand, we are always looking to innovate and are open to entering into partnerships which will improve the value we offer our customers.”
Marketing could play into this, since the pair said they appreciated gaining insights about business promotion from other attendees. This was particularly true for sessions related to the use of video content and generative artificial intelligence.
Since there is so much crossover between the core demographics, there could be lessons that may cross over into both regions. Other “nuts and bolts” issues regarding loan mechanics were similarly enlightening, they said, with particular attention to “understanding how the credit assessment is completed, how the lenders and lending officers work, and how they do business development.”
The industry in Australia and New Zealand is also much younger than it is in the U.S. There is hope that observable changes in the regulatory posture around reverse mortgages here could ultimately play out in similar ways in their countries.
“It’s pleasing to see that the reputation of reverse mortgages in the U.S. has improved. Now they are heavily regulated and the market is working to rebuild trust post the 2008 financial crash, with improved regulation,” they said.
“In Australia, reverse mortgages have been regulated since 2009. In 2012, the Australian government introduced high levels of regulation, including ‘negative equity protection’ on all new reverse mortgage contracts, which helped to counter negative perceptions.”
Seeing some success on the rhetorical front, despite the ongoing challenges faced in the U.S., appears encouraging.
“As the market leader in both Australia and New Zealand, we’re pleased to see the market grow as the industry works to raise awareness of the product,” Cicak and Billot said.
