Chris Clow/RMD: How is the reverse business going this year?
Tyler Plack: We just finished May, and I thought the results for May were really good. I’m excited about the direction we’re headed. Some of our corporate goals are to expand sales floor space and focus on hiring some remote loan officers in a “hit the street” model. Some of these loan officers were very welcoming and exciting to us.
We see continued growth in our face-to-face and call center models as well. The results are increasing month by month this year. We expect this trend to continue through the end of the year. To say I’m bullish on reverse mortgages might be an understatement.
Clow: Your company was highlighted in the recent RMI report due to a significant increase in launches between February and March. I’m curious how the procurement goes. Are you focusing on any specific areas of the business to further grow and maintain progress throughout the year?
Plack: Yes, we are very focused on our direct mail model. We do a lot of work in the data science department. This is such an important corporate goal that I probably spend about half of my time focused on data science. This is very important to what we do. The growth in results you’re seeing is due in part to our advances in statistics.
This is really a statistical model, but it does a good job and continues to improve. We’re very excited about this and hope to continue growing Origin primarily through our own marketing and the new outside sales model we’re building.
Clow: Without giving away any proprietary information, I’m curious about how data science impacts the decision-making process. Is there anything else you can tell me about what you’re focusing on and how that translates into return on investment?
Pluck: I think there’s a class of consumers who want the product but aren’t qualified for it, and there’s a class of consumers who are qualified but don’t want the product. What we really want to focus on are consumers who want the product and qualify for it. This is where data modeling comes in.
We’re looking at the overall credit profile and the overall property profile, applying a lot of mathematical and statistical modeling to figure out who we can best help. This allows us to help more people at a lower cost and ensures that the people we talk to actually get help, rather than those who would be willing to accept our help but unfortunately will never qualify for help. So it’s the intersection of the consumer’s level of interest and our prediction of their eligibility.
Clow: Is this material accessible to you, or is it primarily generated internally, or do you take another approach to it?
Plack: It’s a mixture of everything. We get some data from other sources and we use a lot of it internally. We put all of this into a model that helps us decide who is most likely to receive a loan, close and finance each week.
Clow: Do you think this is used enough in the industry? Although I could be wrong, there doesn’t seem to be much emphasis on data science in the wider business.
Plack: I think there will definitely be benefits through better modeling, but I don’t know if that’s going to be key for everyone. I know it works well for me because of our analytically minded team, but for the average loan officer or sales manager, I wouldn’t focus on the data. I would focus on connecting with financial advisors and planners and using traditional methods. At scale, what we’re doing makes sense, but there’s more than one way to make loans.
Any company should take a multi-faceted, multi-modal approach. We might be really good at direct mail, but we might be missing out on referral networks and this type of initiation. We are working hard to achieve this. For those who are new to direct mail marketing, maybe they should take some time. Just like an investment portfolio, your marketing strategy should be diverse.
Find more work from Tyler Plack and South River on RMD soon.
