Chris Crow/RMD: How is reverse business going this year and how do you expect business to progress by December?
Tyler Plack: We just finished May, and I thought the month was very good. I’m excited to see what the future holds. One of our corporate goals is to focus on scaling our sales floor and hiring more of these remote loan officers in an “on-the-ground” model. The reception we’ve received from some of our loan officers has been very warm and exciting.
As for the in-person and call center models, they continue to grow as well. They’ve increased every month this year. We expect this trend to continue through the end of the year. To say we’re bullish on reverse mortgages would be an understatement.
Crow: Your company was featured in a recent RMI report for experiencing a significant increase in loan volume from February to March. I’m curious how the procurement landscape is going. Are you focusing on any particular areas of your business to further grow and drive business forward throughout the year?
Plack: Yeah, we’re very focused on direct mail models. We’ve been doing a lot of work in the data science department. It’s such an important company goal that I spend about half my day on data science. It’s so important to what we do. Some of the improvements you’re seeing in performance are due to the advancements we’re making in the statistics world.
It’s very much a statistical model, but it’s working well and it continues to improve. We’re very excited about it and expect to continue to see originations increase primarily through our own marketing and through the new external sales model that we’re building.
Clow: I don’t want to give away anything proprietary, but I’m interested in how data science impacts your decision-making process. Can you share more about what you look at and how you apply it to drive return on investment?
Plack: I think there are consumers who want the product but don’t qualify, and there are consumers who qualify but don’t want the product. What we really want to focus on are consumers who want the product and qualify. That’s where data modeling comes in.
We look at the overall credit picture and the overall asset picture and we apply a ton of mathematical and statistical models to find who we’re best able to help. So the result is that we can help more people at less cost and the people that we’re talking to actually get help, rather than people that want our help but unfortunately don’t qualify. So this is the intersection of both consumer interest levels and our predictions of their eligibility.
Clow: Is that data something you can capture, or is it primarily generated in-house, or do you process it in a different way?
Plack: It’s a mix of everything. We have data that we get from other sources, we have a ton of data that we use internally, and we feed it all into our models to help us determine on a week-to-week basis who is most likely to accept a loan, close a deal, and fund it.
Clow: Do you think the industry is using it enough? It seems like data science isn’t really emphasized in business in the broader sense, but I could be wrong.
Plack: I think you can definitely benefit from better modeling, but I don’t know if it’s key for everyone. I know it worked for me because of my analytically-minded team, but for the average loan officer or sales manager, you shouldn’t focus on data. Focus on making connections with financial advisors and planners and using traditional methods. The way we do things makes sense because we’re large, but there’s more than one way to make a loan.
Every business should have a multifaceted and diverse approach. You might be great at direct mail, but you might be missing out on referral networks and that style of outreach. That’s what we’re focusing on. If you haven’t touched direct mail marketing yet, it’s time to take some time to get into it. Just like your investment portfolio, you need to diversify your marketing strategy.
More updates on Tyler Plack and South River will be published in RMDs soon.
