The CRMP designation was created by an Independent Certification Committee comprising of members from the National Reverse Mortgage Lenders Association (NRMLA) that administer the program, while working in conjunction with Professional Testing, Inc.

Each of the nine designees were required to have a minimum of two years of experience in the reverse mortgage business and close at least 50 loans; take 12 hours of continuing education courses, as well as NRMLA’s three-hour ethics course, pass a background check and sit through a three-hour exam. The certification is valid for three years, during which time designees must sit for an additional 12 hours of continuing education per year to be re-certified.

“I congratulate Henri as an inaugural designee as she has demonstrated a deep understanding of the product and a dedication to continually use ethical lending practices with our Customers,” said Trish Kauker, Vice President, WSFS Reverse Mortgage.

WSFS is the number one reverse mortgage lender in Delaware, endorsing 95 HECM loans YTD according to data from the Department of Housing and Urban Development.

The company used to have a larger reverse mortgage footprint when it purchased 1st Reverse Financial Services, but decided to shut it down only a year later.

WSFS also completed the wind-down of 1st Reverse Financial Services, its national reverse mortgage subsidiary which contributed a loss of $363,000 or $0.03 per common share in the fourth quarter.

During the fourth quarter of 2009, 1st Reverse reported a pre-tax loss of $363,000 and recorded $219,000 in fee income along with expenses of $582,000 during the quarter.

WSFS announced it would start winding down 1st Reverse last year.  According to HUD data, the company endorsed 265 HECMs in 2009.  Check out its listing at ReverseBase for more information.

“We have made fundamental progress at improving our core franchise and earnings power, and while our results have stabilized in the third quarter, we continue to be challenged by high credit costs,”  said Mark A. Turner, President and CEO.

The company recognized a $746,000 positive adjustment on a $12.4 million par value BBB+ rated mortgage-backed security (MBS) issued in connection with a 2002 reverse mortgage securitization as a result of market improvement in credit spreads.

During the third quarter of 2009, 1st Reverse reported a pre-tax loss of $166,000 as it moved towards completing the wind-down said WSFS.  The reverse mortgage subsidy recorded $626,000 in fee income and expenses of $792,000 during the quarter.

Earlier this year, WSFS announced it would be winding down 1st Reverse despite the fact it was close to breaking even.  WSFS anticipates it will complete the wind-down during the fourth quarter of 2009.

The Washington Post covered how the Federal Housing Administration’s reverse mortgage program faces changes due to an estimated budget shortfall of $798 million in the program for the coming fiscal year.

Peter Bell, president of the National Reverse Mortgage Lenders Association told the WaPo the change could prevent more than one out of five applicants from paying off their existing home mortgage debt with a new reverse loan.

During Bell’s testimony to the Subcommittee on Housing and Community Opportunity, he proposed restructuring the mortgage insurance premium instead of the 10 percent reduction in principal limit factors.

“HUD could generate the income the program needs to operate, while reducing upfront costs, by restructuring the MIP with a lower front-end amount and a higher ongoing MIP. By reducing the up-front premium to 1% or less, while raising the ongoing premium an appropriate amount, the program can be operated on an easily-adjusted self-sustaining basis, senior homeowners would not have to experience any reduction in proceeds from a HECM, and up-front costs could be lowered—a winning combination for all.”

The WaPo story also mentions an option which allows seniors current lender to accept less than a full payoff, given the diminished reverse mortgage proceeds available.  Any unpaid balance could be recasted as junior liens secured by the property, repayable over an agreed-upon term of years, or in a lump sum with interest at the time of sale of the house.

Some lenders have already done this said Ralph Rosynek, President of 1st Reverse Financial Services.  “Many times – a subordination is much easier and less risk for all of the parties, as the original lender has the option to modify and recast by working with the borrower’s “new cashflow” position,” said Rosynek.

Given the current economic situation and government’s approach to housing, Rosynek said he doesn’t believe a subordination truly violates the current HUD guidelines of “no new debt” incurred as the result of securing a HECM mortgage versus recasting and placing a new lien on the property.

He added that, “Ultimately, it is the present lender who must consider the risk of being in a limited position behind a combo 1^st/2^nd HECM versus another REO property.”

Reverse Mortgages Feel the Squeeze (Washington Post)

Effective at the end of business on July 31st, 1^st Reverse will no longer accept any new loan applications from the company’s network of retail loan originators and wholesale lending partners.  However, the company will process, underwrite and fund all loans currently submitted or received by July 31^st. 

“Our primary goal during this wind-down of operations is to protect and serve the seniors who have reverse mortgage loan applications on file with 1st Reverse,” said Ralph Rosynek, President and CEO of 1^st Reverse.

“Management and staff have taken pride in the company’s record and reputation for support and service to seniors and our business partners. The decision to close our company will not alter our commitment to the seniors we so proudly serve, our business partners who have chosen to work with us, and the vendors who have supported us”, said Rosynek.

Included in its earnings announcement is that it’s conducting an early wind down of 1st Reverse Financial Services, the company’s reverse mortgage subsidiary.

In late April 2008, WSFS acquired a majority stake in 1st Reverse Financial Services, LLC.  During the second quarter of 2009, 1st Reverse reported a pre-tax loss of $152,000, compared to a pre-tax loss of $586,000 for the first quarter of 2009.  1st Reverse recorded $654,000 in fee income during the second quarter, an increase of $98,000, over the first quarter of 2009. Expenses were $806,000 during the second quarter, $336,000 below the first quarter of 2009.

"Despite the improved results, the subsidiary has still not reached breakeven levels, and in the current economic climate, prospects for achieving required returns are weak,” said Mark A. Turner, President and CEO of WSFS. “As a result, WSFS has made the decision to conduct an orderly wind-down of this start-up initiative."

As a result of this decision, during the quarter WSFS recorded an additional $1.6 million pre-tax charge related to the wind-down of 1st Reverse including the write-off of all related goodwill and intangibles, outstanding intercompany receivables and its remaining investment in this subsidiary.

Mr. Turner continued, "WSFS remains committed to the reverse mortgage product and will continue to originate reverse mortgages through its Delaware-based retail franchise. This group has been the top reverse mortgage originator in Delaware for the past year and a half."

Another interesting note from the announcement, WSFS had $953,000 in expenses related to due diligence on an acquisition prospect.  Sources close to WSFS told RMD that the company was in discussions to acquire the Senior Lending Network but the deal fell through towards the end.

WSFS Reports 2nd Quarter ’09 Results

1st Reverse’s Q1 2009 numbers show an improvement compared to a pre-tax loss of $832,000 for the fourth quarter of 2008.  "1st Reverse has modified its business plan to rely more heavily on retail loan originations, and also during the first quarter implemented many cost reductions to improve expected breakeven origination volumes," the statement said.

During the earnings call, Andy Stapp from B. Riley and Company asked Mark Turner, WSFS’s President CEO, “do you still anticipate 1st Reverse to turn a profit in the second quarter?”  His response below:

Andy, our primary goal now with 1st Reverse management is to continue to hone the model and cut costs to get them to a breakeven level as soon as possible. At the same time, we are also working with 1st Reverse management on our strategic alternatives for that business, which could include partnering, a sale of part or all of the business, or an orderly wind down if we cannot get sufficient traction.

It’s been a difficult market for a start up involved in mortgages, as home values have come down. I’ll say though we still strongly believe in a reverse mortgage product as a great way for seniors and baby boomers to live comfortably in their homes in retirement. And we believe the product has a bright future because of the demographics, and we continue to have great success originating from our local retail branch network.

• Index = 1-Month LIBOR
• Margin – 5.500
• Available for refinances and purchases.
• Eligible Property Types – SFD, Condos, PUD’s, and 2-4 units (if one unit is owner occupied
• Proprietary counseling required (IAMP)
• Eligible states = AZ, CA, CO, CT, DOC, DE, FL, GA, HI, IL, MI, MD, NY, NC, NH, NJ, NM, MD, NY, NV, OH, OR, PA, RI, SC, VT, WA, VA, WI

Borrowers with property values of $1.5 million and up will find the FLEX provides a competitive alternative to a HECM, even with the higher loan limits.  Below is an example of how the product compares to a HECM for a borrower with no mortgage balance.  

Correspondents will be required to complete the mandatory webinar training in order to be able to originate the FLEX product.  Initially, the product will be rolled out to a select group of correspondents said Ralph Rosynek, President of 1st Reverse.