Reverse Mortgage Lenders Get Creative to Fund Ginnie Mae HMBS

Reverse mortgage originators who fund loans through Ginnie Mae are turning to middle men in order to get needed liquidity. One of those facilitators is Knight Libertas, Jersey City, N.J., which describes itself as “the leading source of off-exchange liquidity in U.S. equities…with a greater share volume than any U.S. exchange.”

David Fontanilla, formerly vice-president, Deutsche Bank Securities Inc., Securitized Products Group, is representing Knight to the reverse mortgage sector, according to those now doing business with him. While at DB, Fontanilla called himself “the only dedicated reverse mortgage trader on [Wall] street.” Asked about his new role, he declined comment citing lack of permission to comment publicly about it.

However, Torrey Larsen, president, Security One Lending, San Diego, who has worked with Knight Libertas for several months, did provide some details to RMD. “They provide liquidity for our firm,” Larsen reports, noting that “there is not a lot of liquidity or partners who want to take time to understand reverse mortgages.”

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In exchange for Knight providing a “repo-line”, Security One permits the firm to distribute its loans “so they can securitize and distribute to investors,” according to Larsen. “We fund the loan and sell it to an investor and the money comes back to the warehouse line so we can turn it two or three times a month.” he says, adding:

“With $20 million, I can fund $60 million [in reverse mortgages] per month. It’s the only way we can begin to accumulate enough funding to do a Ginnie Mae security,” says Larsen.  Security One Lending, which acquired Omni Reverse earlier this summer, funds 120 to 150 units per month, according to Larsen.

Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade, currently specializing in the reverse mortgage sector. He can be reached at nmorse@morsecommunications.com

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  • Neil,

    We hope to see those funded numbers continue to grow. This avenue is a tremendous help in reaching our growth goals. It had a multiplier impact on liquidity — over night.

    • ReverseDisclosure,rnrnWe cannot violate corporate structures and pay bills that are not our own. It would be a good idea if you contact the CFO of Security One Lending, Inc. directly. The telephone number for company headquarters in San Diego where the CFO has his office is (866) 480-4715. My personal office is in Lakewood, California but I will be in San Diego in a few hours. Please speak with our San Diego receptionist and leave a message for me personally with your name, telephone number, and exact complaint; I will speak with the CFO directly about it. rnrnWe have no control over payment of bills initiated or incurred between March and November 24, 2008 (and in some cases later). All activities during that period were the financial responsibility of Fortes Financial, Inc., a company not owned by the owners of Security One Lending, Inc. That entity stopped its reverse mortgage operations on November 24, 2008 as cited at http://www.forteswholesale.com/. During that period in 2008 Fortes Financial, Inc. purchased and held the right to use the name, Security One Lending; Fortes Financial, Inc. returned that right to Security One Lending, Inc. shortly after its November 24th announcement.rnrnI am not the CFO but would like to help you. Unfortunately you have chosen to accuse Security One Lending, Inc. of failure of paying its debts with no details, disguising your real identity, and making your attack in a public forum, hardly the way to settle debt issues. Who you are and what your motives maybe are unknown to me or the management of Security One Lending, Inc. If your gripe is legitimate and involves Security One Lending, Inc., I will personally try to help if you call San Diego before 2:30PM (Eastern Time) and leave the information I requested above. I have put the receptionist on notice that your call may be coming in. Otherwise, please call the receptionist and ask for the CFO.rn

  • It appears RMD has not changed some of its editorial philosophy, since I've been away: Namely the ability to hide one's identity by using an alias. It has always seemed to me that reverse mortgage folks should above all stand for transparency and truthfulness. Everyone is entitled to an opinion and the right to express it. Not standing behind your word leaves a lot to be desired, in my opinion. I truly wish John would require real names–perhaps in the world of the Blogger, it isn't possible.

  • It appears RMD has not changed some of its editorial philosophy, since I’ve been away: Namely the ability to hide one’s identity by using an alias. It has always seemed to me that reverse mortgage folks should above all stand for transparency and truthfulness. Everyone is entitled to an opinion and the right to express it. Not standing behind your word leaves a lot to be desired, in my opinion. I truly wish John would require real names–perhaps in the world of the Blogger, it isn’t possible.

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