While many lenders have tried to tap into the reverse mortgage “sleeping giant,” a select few have actually succeeded in a calculated effort to grow HECM for Purchase business.
Cherry Creek Mortgage’s reverse mortgage division, 1st Reverse Mortgage USA, is one of those lenders. The Lakewood, Colorado-based company now generates about 20% of its Home Equity Conversion Mortgage volume from H4P transactions, attributing its success to well-established relationships with home builders and real estate professionals in select areas of the U.S.
Now, the company is making an even greater push to grow its H4P business with a concerted effort led by Tim Harder, vice president of business development, who will expand his role to serve as the sales team manager responsible for expanding relationships with homebuilders and developers.
“Our experience is with existing relationships, and we now are taking that expertise and casting a wider net and reaching out to more builders—especially as builders look to develop more and more 55-and-older communities,” Harder tells RMD. “Right now, one out of four homebuyers are 62 and older. By the year 2030, 20% of our population in America will be over 65.”
Based on its efforts in the H4P market, Harder anticipates that within five to eight years, the product may comprise as much as 35% to 40% of 1st Reverse Mortgage USA’s business. In his broadened role, he will be hiring a team to manage builder relationships, starting in the Rocky Mountain region and expanding organically in the future.
The company has seen continued interest among builders who have successfully sold new homes through the H4P program —including referrals from builder to builder — who not only view the program as a means to sell homes, but also to sell upgraded “dream homes” to some families and individuals who may not have had the means to buy new homes in the past.
“We are finding for a lot of seniors, this is their final chance to buy their dream home,” Harder says. “Over the years, due to life circumstances, they haven’t been able to upgrade or right-size, but this is their chance. For the builder, it’s a chance to sell upgraded homes and furnishings. It’s also a chance for the real estate agents to open up more homes to sell.”
1st Reverse Mortgage USA recently expanded into the forward loan business under its “1st Mortgage” brand, as an addition to the operations of its parent company, Cherry Creek — an existing player in the forward space. The 1st Mortgage Solutions USA entity will share resources directly with 1st Reverse Mortgage USA.
Written by Elizabeth Ecker