The reverse mortgage industry is one that never stays still, either through the design of the companies that are a part of it, or because of external change that it is forced to adapt to. While that can contribute to a chaotic environment, it also translates into a generally beneficial trait for any business: adaptability, and leaders charged with dictating the direction of the industry’s lenders are often tasked with implementing change quickly and decisively.
Perhaps no greater example for the necessity of adaptability exists than the COVID-19 coronavirus pandemic that began in 2020. It understandably up-ended the proverbial table of everyday life, and forced businesses all over the world to adapt to a new set of circumstances. Because the reverse mortgage business already has such a streak of adaptability built into it by necessity, lenders and other stakeholders seemed uniquely suited to pivot with the new realities created by the crisis, resulting in what many perceive to be a solid year of business.
RMD previously took a look at four trends that are likely to guide the reverse mortgage industry in 2021, but jumping off of that, the following four lenders are also worthy of an eye because of their own streaks of adaptability, and their different individual desires to meet the needs created by today’s challenges and recent strides made toward those goals.
Fairway Independent Mortgage Corp.: Aiming to blur the line between forward and reverse
If there is a common refrain in speaking to anyone from Fairway, it’s that the employees and the company culture are always heaped with praise in both on- and off-the-record conversations with RMD. After making high-profile hires over the past year including now-business development specialist Timothy Harder, former Home Box Office (HBO) executive Kirby Bradley to create a forward and reverse mortgage “newsroom,” and national reverse training specialist Dan Hultquist, Fairway is actively expanding its roster of varied professionals to bolster its national efforts.
The fact that those national efforts come with a sizable loan officer corps of 4,000 LOs across a footprint that spans the United States is one of the key efforts the company’s reverse mortgage division is planning to use to try and make reverse mortgages a more mainstream retirement funding solution.
With many of those loan officers vocalizing an interest in the reverse mortgage product category, Fairway is providing tools to teach more of them about its intricacies and potentially to bolster the presence of reverse mortgages among current personnel, according to Peter Sciandra, Fairway’s national reverse mortgage sales manager.
“Nearly a thousand loan officers have already requested further training on originating and referring reverse mortgages,” Sciandra said in the announcement of Hultquist’s hiring. “Dan’s addition to the team has the branch network clamoring to add even more reverse volume to their business plans.”
Additionally, Fairway forged a partnership last year with the National Association of Insurance and Financial Advisors (NAIFA) which will see Fairway provide educational materials for NAIFA-sponsored events like webinars, blog posts and print pieces in the association’s Advisor Today magazine publication.
As a part of the partnership, Fairway subject matter experts will join NAIFA’s National Speaker’s Bureau, and the two organizations will collaborate through the LECP Center to further the education of financial planners and consumers on a host of mortgage-related topics, including the greater incorporation of home equity into retirement planning.
Finance of America Reverse: More proprietary innovation on the way
Certainly not a lender to overlook, Finance of America Reverse (FAR) has long been a trend-setter in the reverse mortgage industry especially in terms of its leadership in the proprietary product space. “HomeSafe” is likely the most recognizable proprietary reverse mortgage product on the market, with wide availability and an active correspondent partnership with American Advisors Group (AAG) helping to stretch the product suite’s reach even further.
Still, 2021 could be a major moment for the company as the likelihood of a new proprietary offering appears to be on the horizon, based on an appearance on The RMD Podcast from Jonathan Scarpati, VP of wholesale lending at FAR.
“I think continuing to innovate and creating more product is going to be really important for the future of our industry,” Scarpati said on the podcast. “Just creating more opportunity, casting a larger net, and being able to help more Americans get to work on retirement is really what we’re out to do. I don’t think anyone really does that better than FAR, and 2021 will mark another innovative product that’s going to be set to launch later on this year.”
FAR’s parent company also recently made its intentions known about launching an initial public offering (IPO) in 2021, and a new proprietary offering will help further diversify the business of the parent according to Finance of America CEO Patti Cook. In an effort to meet more of the market potential, Cook touted the existing slate of proprietary products offered by FAR while hinting that there is more to come on that front.
“We have already launched a very successful proprietary reverse product targeted to this population to supplement the standard FHA-backed reverse mortgage product, and have plans for a second proprietary product,” Cook told RMD in December. “Most importantly, this sector represents an opportunity for us to do something great for our borrowers: help them solve a problem and achieve their financial goals. We at Finance of America have a real competitive advantage in this sector, as we have already demonstrated our ability to innovate.”
Longbridge Financial: Leading the way in new tech solutions
Mahwah, N.J.-based Longbridge Financial is a company aiming to be a dynamic participant in the reverse mortgage industry, and always seems to have a new initiative or a new priority to share. Whether it’s receiving the second-highest ranking from a global credit rating agency, being described as a portfolio strength from a major investor, or bolstering its sales division, Longbridge is always doing something and striving to position its products and services in dynamic ways.
One of the major trends that has emerged in the reverse mortgage industry for 2021 is a renewed emphasis on technology, and Longbridge has demonstrated that it wants to be a leader in taking that to heart. After creating a new platform for broker partners and launching then subsequently adding additional features to a website dedicated to its servicing platform, Longbridge also recently rolled out the availability of a mobile app designed to allow consumers to view valuable servicing information on the go.
This step into technology is also likely not to be the last for Longbridge, according to Richard Burke, head of servicing and vendor risk management at Longbridge.
“We are always looking to incorporate the latest technology to both improve our internal processes and provide a streamlined experience to all of our borrowers,” Burke told RMD in February. “Our goal is to leverage technology wherever possible in helping to educate more borrowers and prospective borrowers on the many benefits of a reverse mortgage when compared to other home equity products.”
Mutual of Omaha: Bringing tech to H4P, broadening financial planner base
The incorporation of technology is not exclusive to Longbridge, however, as Mutual of Omaha Mortgage’s reverse division has also recently rolled out a mobile application specifically designed to serve potential reverse mortgage borrowers seeking either a Home Equity Conversion Mortgage (HECM), or a HECM for Purchase (H4P) transaction.
Mutual of Omaha has also expressed that greater incorporation of technology into the reverse mortgage process is essential to creating an experience that borrowers will come to expect, especially as new generations of seniors become eligible for reverse mortgages in the future. Of course, though, COVID-19 has played a big role in determining the necessity for new technology.
“We have seen that seniors have been more able to adopt and use technology over the last few years,” said John Metcalf, vice president of sales technology and strategy for Mutual of Omaha Mortgage to RMD in January. “But I think what’s really come to light in terms of deployment of this app is that you have more people across the country — and across the world — leveraging technology to communicate with their families and friends due to the pandemic.”
Late last year, Mutual of Omaha also turned heads in the reverse mortgage industry when the so-named insurance company expanded the scope of its needs analysis software, Navigator, to encompass a client’s housing wealth situation into their individual profile. This is a move which will allow financial advisors to get a fuller understanding of a client’s situation by including housing wealth in their advisor/client conversations, something which has long been advocated for by the reverse mortgage industry.
