The American Credit Union Mortgage Association (ACUMA) recently convened its "Make Your Mark" annual conference in Las Vegas, where industry leaders highlighted a stark disparity between the demographic needs of credit union memberships and the current lending output of the sector. Despite a massive base of age-eligible homeowners, credit unions remain a marginal presence in the reverse mortgage market, a segment currently dominated by specialized non-bank lenders. The discussions at the conference underscored a critical need for credit unions to modernize their approach to senior lending as a means of both member retention and financial relevance in an era of shifting demographics.
Ron Kamler, president and CEO of Alliance Reverse Mortgage, and Brandon Bartholomew, mortgage sales manager at Mountain America Credit Union, served as the primary architects of this discussion. Their presentation focused on the logistical and educational hurdles that have historically prevented credit unions from capturing a significant share of the Home Equity Conversion Mortgage (HECM) market. The central thesis of the session was clear: credit unions possess the trust and the membership base required to lead the industry, yet they lack the operational infrastructure and internal education to convert that potential into volume.
The Statistical Disconnect in Senior Lending
The data presented at the ACUMA conference revealed a profound gap in market penetration. Over the past 12 months, approximately 36,000 reverse mortgages were originated across the United States. Of that total, credit unions were responsible for only 81 originations. This figure stands in sharp contrast to the broader credit union ecosystem, which currently serves approximately 55 million members who meet the age requirements for a reverse mortgage—typically 62 years or older for the federal HECM program, though some proprietary products now start at age 55.
This discrepancy suggests that millions of credit union members are either seeking these financial products from external competitors or are unaware that their primary financial institution could facilitate such a loan. Kamler noted that the "relationship advantage" credit unions typically enjoy is being squandered in the reverse mortgage space, as members are forced to look toward aggressive third-party marketers or large-scale non-bank originators who may not have the member’s best financial interest at heart.
A Chronology of Implementation: The Mountain America Model
The evolution of reverse mortgage offerings at Mountain America Credit Union, a Utah-based institution, provides a roadmap for how credit unions can transition from passive observers to active participants in the market. The institution’s journey reflects the broader industry’s struggle to maintain specialized expertise.
In the early 2000s, Mountain America relied on a single reverse mortgage loan officer to handle all inquiries. This "specialist-centric" model is common among mid-to-large credit unions but carries significant institutional risk. When that sole specialist passed away in 2011, the credit union faced a temporary vacuum in its ability to serve senior members. Although a new specialist was eventually hired, the leadership realized that a siloed approach was insufficient for a membership base spread across a wide geographic area.
By 2015, Mountain America shifted its strategy toward a decentralized model. The institution began an aggressive campaign to train all loan officers across its various branches to at least discuss the fundamentals of reverse mortgages. This was not intended to turn every employee into a technical expert, but rather to ensure that no member inquiry was met with a "dead end." Today, the credit union utilizes a tiered knowledge system where front-line branch employees and call center staff are trained to identify the "triggers" for a reverse mortgage conversation and can seamlessly hand off the member to a qualified resource.
Identifying the Internal Education Crisis
One of the most significant barriers to growth identified by the panelists is the failure of internal communication. Kamler shared anecdotal evidence and industry observations indicating that when members call their credit unions to ask about reverse mortgages, they are frequently told the product does not exist at that institution, even when it does.
This "disconnect," as Kamler described it, often happens at the first point of contact—the teller line or the call center. Employees who are focused on traditional checking accounts, auto loans, or standard forward mortgages often view reverse mortgages as a niche or "fringe" product. In some cases, employees may harbor outdated prejudices against the product, viewing it as a "loan of last resort" rather than a sophisticated financial tool.
When a member is told to "search online" for information by their trusted credit union representative, they are immediately exposed to high-pressure sales environments from competitors. Bartholomew noted that many members only returned to Mountain America after receiving quotes from outside lenders that included "outrageous" fees and interest rates. This realization—that members were being financially disadvantaged by looking elsewhere—served as a primary catalyst for Mountain America to formalize and expand its internal reverse mortgage program.
The Evolution of the Product: From Crisis to Strategy
A recurring theme at the ACUMA conference was the need to rebrand the reverse mortgage within the credit union culture. Historically, the Home Equity Conversion Mortgage (HECM) was associated with borrowers in financial distress who were attempting to avoid foreclosure or pay for emergency medical expenses.
However, the modern reverse mortgage landscape has shifted toward "strategic wealth management." Kamler emphasized that today’s borrowers are increasingly affluent individuals using the product as a financial planning tool. For example, a reverse mortgage line of credit allows a homeowner to access equity during market downturns, preventing them from having to sell traditional investment assets (like stocks or 401ks) at a loss.
Key features of the modern reverse mortgage that appeal to this demographic include:
- The Growth Feature: The unused portion of a HECM line of credit actually grows over time at the same rate as the loan’s interest rate plus the mortgage insurance premium. This provides seniors with a larger pool of liquidity as they age.
- Non-Recourse Protection: Borrowers or their heirs will never owe more than the home is worth at the time of sale, a federal protection that provides peace of mind to the "Silver Tsunami" generation.
- Social Security Optimization: By using home equity to bridge the gap between retirement and age 70, seniors can delay taking Social Security benefits, thereby maximizing their monthly lifetime payments.
Market Implications and the Role of Partnerships
For many credit unions, the hurdle to entering the reverse mortgage market is not a lack of will, but a lack of resources. The regulatory requirements for HECMs are stringent, requiring specialized FHA-approved counseling and complex servicing capabilities that differ significantly from traditional 30-year fixed mortgages.
Kamler suggested that for institutions unable to build an internal department, the "partnership model" is the most viable path forward. By partnering with specialized wholesale reverse mortgage companies, credit unions can offer the product under their own brand or through a co-branded arrangement. This allows the credit union to maintain the member relationship and earn fee income without the overhead of maintaining a specialized back-office staff.
The broader implications for the credit union movement are significant. As the "Great Wealth Transfer" begins, trillions of dollars in home equity are currently held by the Baby Boomer generation. If credit unions fail to provide the tools necessary to manage that equity, they risk losing the next generation of members—the heirs—who will move those assets to the institutions that helped their parents manage their retirement effectively.
Analysis of the Competitive Landscape
The current reverse mortgage market is highly concentrated. Data from the Department of Housing and Urban Development (HUD) shows that a handful of non-bank lenders, such as Finance of America Reverse and Mutual of Omaha Mortgage, account for the vast majority of HECM volume. These firms have invested heavily in national television advertising and digital marketing.
Credit unions, however, possess an "omni-channel" advantage that these non-banks lack. With physical branches in the communities where seniors live, credit unions can provide the face-to-face consultation that many older borrowers prefer when discussing complex financial decisions. The ACUMA panelists argued that by simply "showing up" and making the product visible, credit unions could capture a double-digit share of the market within a few years.
Conclusion: A Call to Action for Credit Union Executives
The presentation at the ACUMA "Make Your Mark" conference served as a wake-up call for an industry that has traditionally been slow to adopt "niche" mortgage products. With 55 million age-eligible members and a track record of only 81 loans in a year, the room for growth is not just incremental—it is exponential.
To succeed, credit unions must move beyond the "one-specialist" model and integrate senior equity solutions into their broader mortgage and wealth management strategies. This requires a multi-pronged approach: comprehensive staff training, the debunking of historical myths surrounding reverse mortgages, and a commitment to viewing home equity as a pillar of retirement security.
As the US population continues to age, the demand for liquidity in retirement will only increase. Credit unions that fail to adapt to this reality may find themselves sidelined, while their members seek financial security from the very predatory lenders the credit union movement was designed to protect them against. The "Mark" that credit unions must make, according to Kamler and Bartholomew, is one of education, accessibility, and proactive member service in the face of an aging America.
