Direct Finance Buys First Call Mortgage, Increases Reverse Mortgage Footprint

image Last week Direct Finance Corp announced that it had purchased the assets of First Call Mortgage Inc just a few days after Massachusetts and New Hampshire state regulators ordered the company to stop originating loans.  According to regulators, First Call Mortgage inflated borrowers incomes on loan applications, was lax with security surrounding customers personal information, and sold reverse mortgages without the proper Massachusetts license.

“This is a significant event for Direct Finance Corp. and reflects my continued confidence in the mortgage industry in spite of these difficult times,” says Alain Valles, president of Direct Finance and current president of the Massachusetts Mortgage Association.

The acquisition will help Direct Finance grow its reverse mortgage business which according to HUD’s Neighborhood Watch originated 98 HECMs in the past year.  Combining that with the 146 HECMs First Call Mortgage originated without the proper licensing in Massachusetts will make them one of the largest reverse mortgage lenders in the state.  Anyone else think its crazy that First Call Mortgage originated that many HECMs and wasn’t smart enough to get properly licensed?

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Details of the transactions weren’t disclosed but odds are good Direct Finance got a great deal due to the company’s problems with state regulators.  As part of the deal Direct Finance acquired furniture as well as the loan officers and support staff of First Call Mortgage.

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  • Better disclosures for Reverse Mortgages. Let’s put together a form that informs the senior’s what kind of loan he has and if it is gov. insured or not. He might not even know what it means to not be gov. insured. It means you may not get your money if the lender does not want to give it to you if your loan is higher than the present value. The government insured loan does make sure you get it, by picking up where the lender left off. Without it, you do not have that protection and at the mercy of the lender. Don’t you think that is important enough to put in a disclosure form and signed by all. Otherwise, does the counselor really tell you the down side to the types of loans that are considered dangerous. Telling the whole story is so necessary. After you look at the long contract, and all the legal wording, at older person may or may not understand what it all means. This would be a protection for the senior and all parties.

  • Are you kidding me? Anyone involved in the Reverse Mortgage business is aware that the state of Massachusetts is patrolling Reverse Mortgage companies with NO clear understanding of how their Moving Target of ridiculous requirements is affecting Massachusetts seniors and causing a horrible environment to conduct business. They are simply flying blind and on a witchhunt looking for another revenue source. They are only interested in collecting their newly instituted excessive fees to inflate their bloated bureaucracy with no regard for how Reverse Mortgages are helping and sometimes literally saving our seniors from financial desperation. Here’s a hint, how about fostering a productive environment to help seniors access their own money instead of trying to bury their beaurocratic snout deeper in the pockets of businesses and Massachusetts seniors.

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