Can Tom Selleck Convince Seniors Reverse Mortgages Aren’t Too Good to Be True?

Latest good-guy pitchman for a product with an image problem

If you were around in 1987, you might remember People magazine naming Tom Selleck the "sexiest man in the world." You might recall how that famous, mustached face graced the covers of the glossies and tabloids, or how Magnum, P.I.—the CBS series that pulled in up to 18.7 million weekly viewers during its eight-year run—made Selleck among the most recognizable faces in America. Playing an ex-special ops Vietnam vet in the show, Selleck skillfully blended his devilish playboy charm with a smart, hardened, patriotic side. It was an unbeatable combo—and it's one a company called American Advisors Group is hoping can still work its old magic nearly three decades after Magnum ended.

Selleck, still swarthy and handsome at 71, has continued to play tough, no-nonsense TV characters, most recently Commissioner Frank Reagan on the CBS series Blue Bloods. But Selleck's latest screen appearance is unlike anything he's done before. Selleck recently began pitching AAG's reverse mortgages. (A new spot debuted Thursday; watch the first one below.)

If you're too young to remember Selleck's heyday as a TV private investigator, well, it doesn't matter—you're not the target audience, anyway. AAG hopes to woo boomers heading into retirement, specifically Americans over 62, the minimum age you need to be to quality for a reverse mortgage.

"There are 10,000 people turning 62 every day, and we want to appeal to that demographic," said Teague McGrath, chief creative officer for AAG. McGrath said Selleck is the right age and has the right image for the task at hand. "On and off screen, Tom has credibility and no issues," McGrath said. "He's a very decent, wholesome man. And that resonates."

In fact, Selleck is only the latest in a long line of gallant, law-abiding men—Hollywood graybeards, all of them—who've pitched reverse mortgages to an aging demographic. Robert Wagner, Fred Thompson, Jerry Orbach and James Garner are among the television veterans to sell reverse mortgages (see sidebar.) Yet a close look at Selleck's spot shows just how delicate a sell this financial product can be.

AAG Commercial 2016 from AAG on Vimeo.

"I know what you're thinking," Selleck intones in his rich baritone, staring out the window of a loft apartment in the fashion district of Los Angeles. "I thought what you thought. … Just like you, I thought that reverse mortgages had to have some kind of catch. Just a way for the banks to get your house, right?"

This opener is a head-on confrontation of one of reverse mortgages' many perception problems—ones so persistent that AAG recruited Selleck to take over after longtime spokesperson Thompson died last year. McGrath said he'd hoped the public image of reverse mortgages might have improved to the point where hiring another star wouldn't be necessary, but it was. "People still have negative perceptions of reverse mortgages as a last-resort financial product," he said. "So, realistically, we still need a celebrity spokesperson."

A loan with an image problem

For those who aren't familiar, reverse mortgages convert home equity into tax-free cash payments homeowners over 62 can use to help fund their retirement. But, lingo aside, the product is still a loan—a complicated loan with high fees, and one that must be repaid in full when the homeowner dies or moves out of the home. The negative public image that saddles reverse mortgages stems largely from the great recession, when "mortgage" became a dirty word.

In the wake of the 2008 financial crisis, as banks retreated from the mortgage business, a number of unscrupulous peddlers filled the gap, pitching the product to unwitting seniors as found money without informing them of the myriad financial obligations required to keep the loan intact. A New York Times story in 2012 detailed the plight of a California widow who failed to put her name on the reverse-mortgage deed and then lost her home after her husband died and the loan came due. She became the poster child for the hazards of reverse mortgages.

"There are a lot of good reasons why reverse mortgages work, but it's a complex instrument. And it takes a little more attention than [most] people have," said Steven Sass, an economist with the Center for Retirement Research at Boston College. "Complexity is always off-putting, [but] the bad reputation is in part because a swindler might induce people to take these out."

While the federal government has since tightened up the requirements for getting a reverse mortgage in an effort to protect unwary seniors, the product's image hasn't improved much. Last year, for example, Consumer Reports ran a story with the unequivocal headline: "Don't be suckered into buying a reverse mortgage."

Help wanted: celebrity

This is why so many lenders have reached out to mature, good-guy TV stars, whose familiarity and perceived trustworthiness are key to reaching an older demographic. Yet, even this practice has come under fire. Last June, the Consumer Financial Protection Bureau studied a bunch of these ads and went public with its disapproval.

"As older consumers consider reverse mortgage loans to tap into their home equity, they need to be careful of those late-night TV ads that seem too good to be true," CFPB's director Richard Cordray said in a statement. "It is important that advertisements do not downplay the terms and risks of reverse mortgages or confuse prospective borrowers."

The CFPB reviewed reverse-mortgage ads in five major markets and found that "many contained confusing, incomplete, and inaccurate statements regarding borrower requirements … and borrower risks."  After convening a focus group of seniors who'd watched the ads, the group found that "some consumers struggled to understand that reverse mortgages are loans that must be repaid with interest."

As it turned out, Tom Selleck shared some of these concerns himself—it took AAG no less than six months to negotiate his participation—and did not want to be part of an effort that would be construed as misleading. It's why the script Selleck reads in AAG's ad is one largely written by Selleck himself and is based on his own misgivings about reverse mortgages.

"He [originally] thought reverse mortgages were a way for banks to get your home," McGrath said. "And we said, 'Why don't we make that the basis for the commercial? Why don't you talk about your experience?' He said, 'If you can do it that way, I'll be a part of it.' He didn't want to tell people what to do but to walk them through the process. [He says,] 'You might want to check it out—like I did.'"

To be sure, it's a softer sell than a reverse-mortgage buyer would have encountered in the bad old days of unscrupulous mortgage lending. Even so—and Selleck's sincerity as an individual notwithstanding—Sass believes that retirees who are on the fence signing up for a reverse mortgage would do better to talk to a financial advisor than buy into the reassurances of a TV spot. "I don't think Tom Selleck saying, 'Call to get my brochure,' and then your talking to the high-pressure salesman, is the best solution," he said.