John LaRose took a struggling company from its early days as a data entry shop and turned it into the largest reverse mortgage-only subservicer in the country. From his first NRMLA meeting in 2004 to today, where he holds a seat on NRMLA’s board, LaRose has seen the reverse mortgage industry take shape as a group of professionals with a common goal.
John sat down with RMD to share some of his experiences from working with family to addressing some of the tough questions it will take in order for this industry to grow.
RMD: How did you first come to Celink? What has changed?
JL: I first came to work for Celink in 1985. At that time, it was a large data entry shop that did a little bit of loan servicing for the Federal Housing Administration and state housing finance. My job was to decide which direction to take the company. I quickly determined data entry was dying and that loan servicing was growing.
Then in 1999, the markets basically collapsed for our business as a mainstream subservicer and by 2004 we were pretty much looking at liquidating the company.
What made you look to reverse mortgages?
I was invited by Peter Bell to attend the Atlanta NRMLA conference in 2004. There, I met industry leaders from Fannie Mae, as well as Jeff Taylor, Paul Franklin and Shawna James. What I heard and what I saw was the caliber of people in this industry and the needs they were fulfilling. It really struck me, almost like it was a calling, that this—this is what I want to do.
It was something I knew I could build a company around and design not only to support client needs but also the needs of seniors.
Tell us about the early days.
We were approved by FNMA in July 2005 and began subservicing in September. Now we have 70,000 reverse mortgages we are subservicing and we should be around 200,000 by the end of this year.
And the forward business… is history?
As of December 31, we have stopped servicing forward loans.
We are proud to be a one-trick pony. We don’t do anything but subservice reverse mortgages. We have not interest in being an investor and we are content where we are.
How did you build the reverse mortgage team?
It started with [my son] Ryan, who is now company president. When we received approval from FNMA, we were asked to take over a portfolio from Wendover, which was going out of business at the time. Ryan started the reverse business with two other people in 2005. Sure, we had some support from the company, but it was really just a team of three people.
Right now, we’re a little over 100 employees and are hiring on a regular basis. We aim to be around 175 in the near future.
Our recent growth is a result of Nation Star selecting us to be their subservicer and the business transferred from Bank of America.
What has kept you in this business?
An across-the-board, passion for the product. A passion for helping and providing a product that helps seniors live a better or more comfortable life. Everyone I talk to from NRMLA’s board of directors to brokers and correspondent lenders seems to really feel good about what they are doing.
I’m very optimistic about the future of this product.
Is there any other good news?
A year ago, we were under siege with misinformation. Today, there’s more talk about how reverse mortgages are becoming mainstream. Take Florida for example. You’re dealing with a demographic that pays attention to this product and the knowledge base is exponential. In the Midwest [where Celink is headquartered], people seem to have a more cynical eye, but they’re starting to say, “hey, this concept is pretty cool. Who can I call to find out more?”
Where do you see the growth opportunity?
That is a question I don’t have an answer to. We need a stronger secondary market execution. The market now is driven by six or eight GNMA issuers. If the product does go mainstream, we are going to need more.
Speaking of one-trick ponies, without a propriety product and market for it, it’s a pretty fragile state of the industry and I don’t know how anybody can change that, but it’s the biggest hurdle for the industry going mainstream.
Looking back, what would you have done differently?
It has been everything and more than what I’d hoped for. It has been a joy and a pleasure to work with my son and to watch Ryan and his team develop a corporate culture that I requested from the beginning based on the idea that every customer should be treated as though it is our own grandmother we’re working with. That’s the culture I’ve always wanted, and he and his team have done a wonderful job achieving that.
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