Virtual Bank Returns to Reverse Mortgage Business

image RMD has learned that VirtualBank Seniors Lending Group is getting back into the reverse mortgage business after it was shut down in late 2007.  Al Rodriguez is heading up the business as President and Dennis Loxton will be the National Sales Manager for wholesale.

Virtual Bank is accepting new broker applications effective immediately and plans to formally open for business nationwide in early March.

Prior to shutting down, Virtual Bank offered a creative suite of products like the Mega Life, Life Plan, and Prime Life which were designed for borrowers who didn’t quite fit into the HECM program or the jumbo products in the marketplace.

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While it’s doubtful the company will be offering the same type of products as before, we’re being told Virtual Bank is in the process of getting approved as a Ginnie Mae issuer.  However, its no secret that Ginnie Mae has a backlog of applications from reverse mortgage lenders and all we’ve been told is “We’re working through them as fast as we can”.

Assuming Virtual Bank is able to get approved to issue HMBS, they will have plenty of competition as execution on the secondary market continues to improve.  Last week SunWest and Reverseit pricing improved drastically and began paying over 2% in YSP to correspondents for fixed rate HECMs.

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  • It will be interesting to see how this re-entry into the reverse marketplace plays out for them.

    Seems a bit aggressive to jump in to the HMBS program that quickly…but no one ever accused Virtual Bank of not being aggressive with their business plans.

  • I don't think Ginnie Mae has approved an Issuer in over a year. While there are a lot of frustrated lenders that want to get involved in the HMBS program, I for one am glad that GNMA is taking it's time to get it right.

      • It is my understanding that Celink is “technically” approved as an HMBS Issuer, but they are limited to being an HMBS subservicer (Subcontract Servicer), and Participation Agent. In other words, they cannot be an “active” HMBS Issuer.

      • I wouldn't think Ginnie would be able to or want to keep track of those who had Issuer approval with limitation. I suppose I could be incorrect.

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