Open Mortgage’s reverse split highlighted on national talk show
Open Mortgage, an Austin, Texas-based multi-channel lender, laid off about 24 employees in its term mortgage division last week as it struggles to weather a tough mortgage market. However, the company is also showing confidence in its reverse mortgage segment, as a business executive recently made an appearance to talk about the product category on a nationally televised talk show.
The size of Open Mortgage’s reverse mortgage division has also grown relative to the term side, with the retail reverse mortgage team doubling by the end of the third quarter in 2022, according to Scott Gordon, founder. and CEO of Open Mortgage. Company executives expect that team to triple by the end of 2023.
Reduced footprint forward
Gordon said last week’s reduction in effect (RIF) applied primarily to wholesale operations and term mortgage operations staff. The total number of employees affected was about two dozen, he said.
“These cuts are all related to the market downturn that everyone is unfortunately experiencing,” Gordon told RMD. “We try to be the adults in the room and keep everything to scale.”
Gordon said moving employees is always a tough choice, but reiterated that the problem was not with performance, but with the shrinking market.
“It’s probably about two dozen, which doesn’t seem like a lot compared to a lot of companies,” he said. “But we feel like when you’re one of those people, it’s awful. People who were RIF today or got their hours reduced, there was no performance issue. We’re just dealing with a reduced market, and that’s always sad.”
Gordon said he expects tough times in the medium term, but is looking to stabilize business in 2023.
“Our thinking from what we see – and of course we watch all the news out there – the fourth quarter will continue to be down,” he said. “Q1  will probably fail. But, I’m pretty optimistic about Q2. I think it’s a weird market that will be tough for a little while, but we just have to live with it while inflation is broken. If you watch the news, [the Consumer Price Index (CPI) recently] came out lower. I expect that in the next few months it will happen again.
When it comes to the reverse mortgage division, however, Gordon sees a different story playing out with staff and says the pace of hiring will continue through at least the end of 2022.
“The good news is that year-to-date, by the end of the third quarter, we had doubled the size of our reverse retail teams,” Gordon said. “And with people coming in now, we should easily have tripled by the end of the year. That’s part of my sunny outlook for Q2 2023. We know it takes people a while to get going. , and conversely it’s tough right now, as it’s traditional. But we also know we’ve got great rotation times and the team has built up, so that’s pretty good .
Gordon also spoke about the sustainability of recent hires — and whether or not future RIFs are needed.
“I think [things are] stable in terms of hiring activity,” he said. “As we’ve been balancing forwards and backwards recently, we’re factoring in all that growth we’ve had in reverse. To make sure we can continue to have good spin times. I just think reverse and walking before have to go through the next three to four months. The reverse mortgage has been a great hedge for us to compensate for when times are tough in the future. It was great to have both.
Gordon also noted that there is a new education and publicity initiative for Open Mortgage’s reverse business, which has led to the company’s chief revenue officer, Scott Harkless, appearing alongside the talk host. -show Montel Williams.
“We’ve been asked to be the exclusive reverse mortgage partner for their show called ‘The Balancing Act’ on Lifetime, and we’ve recorded a segment that will air on Lifetime on Monday,” he said.
The segment aired Monday morning at 7:30 a.m. EST and is scheduled to air again in the same timeslot on Tuesday, November 22. It will be released 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, senior vice president of marketing at ‘Open Mortgage.
Gordon said the partnership came about after the program’s producers contacted the company.
“They reached out to us about the possibility of doing this kind of segment,” Gordon said. “So we designed the content with them, how to make it help dispel myths and just help get more information about the reverse.”
Harkless said this marks the start of the company’s new brand awareness goals.
“Sharing our story and the benefits of reverse mortgages with Montel Williams will help many more seniors realize the benefits of home equity in their retirement strategy,” Harkless said. “Montel and his team are passionate about educating and helping their viewers make smart 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.