Senior Lending Network Halts Applications, Looks For Buyer or Additional Capital
July 7th, 2009 | by admin Published in LLS, News, Reverse Mortgage | 26 Comments
World Alliance Financial Corp., a reverse-mortgage lender that operates the Senior Lending Network announced today that it will no longer accept new loan applications, and will begin scaling back its operations effective immediately.
"World Alliance Financial is proud of its history of providing, through its reverse mortgage products, financial resources to seniors to help them achieve economic well-being that they could not otherwise attain. We very much regret that we can no longer accept new loan applications," said World Alliance Financial Chief Executive David Peskin.
"To be clear, this decision will have no impact on our current borrowers, holders of GNMA securities that we’ve issued and our partners in the Senior Lending Network. We will continue to service outstanding loans, as well as fulfill all of our other obligations. Our core infrastructure will remain fully intact while we seek other opportunities,” Peskin said.
Mr. Peskin also noted that the Senior Lending Network will direct those who have applied for loans but have not yet been cleared for closing to alternative lenders.
WAF’s parent company, KBC Group has been hit hard by the downturn in the economy, receiving government relief three different times adding up to $41.5 billion in financing and guarantees to recover from disastrous mortgage bets that its financial engineers and traders made.
KBC has been shedding its US holdings, earlier this year EquityKey was repurchased by its founders after it cut off funding for its product which provided a cash advance on a house in exchange for the right to share in the homes future appreciation.
Viviane Huybrecht, spokesperson for World Alliance’s Belgian parent company, KBC Group, said “We greatly appreciate the efforts of our colleagues at World Alliance. However, as the Group has made clear in prior announcements, it is conducting a group-wide, strategic review of its operations and deployment of capital, and as part of that process has decided to no longer make funding available for new reverse mortgages.”
Huybrecht added, “Both the KBC Group and World Alliance management are working diligently to find a buyer or capital partner for the business, but if we are unsuccessful we will begin to slowly wind it down. In the interim, we will be retaining a core group of employees to ensure that World Alliance Financial is able to honor all of its current obligations, and will provide support services to former sales and support staff to help them through this difficult transition.”
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July 7th, 2009 at 10:35 am (#)
Sad to see yet another wholesaler depart. I'm sure that the employees gave their all to strive for success.
July 7th, 2009 at 11:54 am (#)
We have not departed yet. We have not been defeated. We will be making every effort to succeed and we thank you for your support.
July 7th, 2009 at 12:30 pm (#)
I hope Congress and AARP take note. The more this industry is restricted by such things as lowered origination fees and higher margins forced on us by Fannie Mae in response to its new requirements under HERA, the more this industry will retract.
No one has done more to promote this industry in a strong and positive manner than David Peskin. This pull back is not a welcome event. The vast majority of us hope that SLN does well and pulls out of this temporary set back.
July 7th, 2009 at 2:31 pm (#)
Not much shocks me in our industry anymore – but that news shocked me.
July 7th, 2009 at 2:41 pm (#)
We need companies like SLN advertising and communicating the wonderful product benefits of reverse mortgages.
Bob Purcell
July 7th, 2009 at 4:59 pm (#)
I don't know of anyone who is making a profit in the reverse mortgage business, despite our “excessive” fees.
July 7th, 2009 at 7:58 pm (#)
Let's just hope and pray that this is not a sign of things to come in our industry. It would be nice if someone came to the rescue and they split off from KBC like Equity Key!
July 8th, 2009 at 5:27 am (#)
Banks and boutiques…..the industry changes every day towards that end…, the writing is clear! If you told me Nutter and SLN would shut down operations this year, I'd have told you you were nuts, yet here we are. So, does SLN continue to advertise and generate leads, or are they out of that business as well, and what happens to our buddy Mr. Wagner?!??!
July 8th, 2009 at 5:55 am (#)
For the Industry's sake, I'd hope the Brand is picked up and the Robert Wagner TV Ads continue…as this has done more to promote the understanding of Reverses than anything.
July 8th, 2009 at 6:21 am (#)
Another “Boiler Room” operation bites the dust! Company started out good–but changed for the worse a few years ago. What will Robert Wagner do now?
July 8th, 2009 at 7:50 am (#)
SLN has done a lot getting the word out to seniors, their children, and advisors. It's sad to see them go, and makes me wonder who could be next
July 8th, 2009 at 8:31 am (#)
This is a real negative for the industry as a whole. David Peskin was not perfect BUT he did more for the industry than any one individual I can think of. As a former employee I wish him well and hope a recovery is possible. The larger picture is.. it possible to be profitable in this industry that serves seniors so well? Or have we all been Mislead? Does Hud need to re-examine their meddling in the origination fees etc.What lessons can be learned from this? Does anyone have any Ideas how to convey to Government players that this is to big of an event to ignore and take lightly. Very good luck to you David I wish you well!
July 8th, 2009 at 1:01 pm (#)
The Robert Wagner advertising did more to inform the public of Reverse Mortgages and their provisions and therefore acceptability than any other source or more than you could imagine.
Let's hope that someone else can pick up this for SLN.
July 8th, 2009 at 4:23 pm (#)
for the record, not one senior that I have ever spoken to about the SLN DVD said that is was helpful. Marketing the product is one thing, actually explaining it is another!
July 8th, 2009 at 4:47 pm (#)
SLN died when David sold Vertial Lending, it just took a year before the life support plug was pulled. Hope everyone planned ahead for this
July 8th, 2009 at 4:56 pm (#)
Phone room operations used to work well when FHA was a bad word in the real estate industry. If a senior needed the money availabe through a reverse mortgage, the lender options were limited. The mortgage fraud driven housing collapse has dictated a new model. States have clamped down on unlicensed LO. Personal in home contact with the borrower combined with a brand name you can trust is the new model going forward.
July 8th, 2009 at 7:20 pm (#)
Bad timing! Secondary market went to hell. Margins went up and lower margins on the books were worthless. KBC is having issues with other investments. 130 million per month to fund loans and keep the lights on. Also, on the chop shop comment the structure & sales teams in that office is second to none they are the best from the best. SLN was still making a profit that wasnt the issue. KBC pulled the plug!!! David Peskin, SLN will be back and better then ever.
July 8th, 2009 at 7:38 pm (#)
FYI,The dvd is designed to give them a general idea. Every caller was assigned to one person who contacted them to educate them and make sure they understand the program. It was an introduction to the process that SLN provided and perfected.
July 9th, 2009 at 5:52 am (#)
Say what you will…the Robert Wagner commercials definitely got word of this “niche” product out to the masses. Too many of the people that have been in this business for years are having a harder time with the floodgates open to any lender that lost their subprime and need another product.
If FHA would quit lumping this loan in with the other troubled programs, life would be so much better…
July 10th, 2009 at 3:44 pm (#)
no comment
July 10th, 2009 at 5:45 pm (#)
When the company turned a blind eye to Managers like Chris Cosmon and his coke habit thats when you knew the company was going down. Walking in with sunglasses or not at all for days on end. Amazing how a peeon like me even noticed things like that.
July 11th, 2009 at 7:45 am (#)
I don't like to see anyone fail in this business. We may be competitors but we all benefit from the exposure that all provide. Reverse mortgages are the best kept secret in the mortgage world and I will miss the Robert Wagner commercials.
July 24th, 2009 at 11:58 am (#)
Does anyone know if Peskin is going to offer wholesale again when he reopens as Guardian First with Jason Levy?
August 18th, 2009 at 6:55 pm (#)
I'd like to know about the objective of this business..but I think nobody wanted to fail their business…reverse mortgage are not really good..
August 20th, 2009 at 5:46 am (#)
Real Estate Internet Marketing
Maybe you should learn how to construct a sentence before bashing an industry.
August 20th, 2009 at 12:46 pm (#)
Real Estate Internet MarketingrnMaybe you should learn how to construct a sentence before bashing an industry.