Naysayers and doomsday scenarists step aside because Richard Pitbladdo is in the house. Pitbladdo is chief financial officer of LTC Global, Medford, Oregon, a company he co-founded in 2002, after stints with LTC Insurance and an earlier career as a business professor at the University of Rochester (New York).
More recently, between 1997 and 2002, Pitbladdo managed capital and investment strategy in the long-term care line of business, starting with John Hancock. In 1999, he joined GE Capital’s LTC insurance division as the top investment actuary, later moving to LTC Reinsurance Services as a senior vice-president. LTC Global is affiliated with First Mariner Bank in Baltimore.
Pitbladdo, who holds a PhD in economics from Stanford University and has been a fellow of the Program for Ethics and the Professions at Harvard University, also knows math. “1946 plus 62 equals 2008,” he figures – shorthand for the leading edge of Baby Boomers arriving at the threshold of qualification for a reverse mortgage. Thus, he says confidently: “When the housing market turns around just a wee bit, reverse mortgages will go crazy” – as in, dramatic growth.
For now, though, Pitbladdo says “the industry has problems,” but turn over that coin and you’ll find it is “a good time to acquire” other companies. “That’s the reason we got into the business,” he remarks. “The market is having a lot of trouble, that’s why we came in.” Also auguring advances, “the government has the motivation to subsidize reverse mortgages to help Medicaid,” Pitbladdo says.
In particular, he points out that “the refi market is ‘kaput’ and “those people who have paid off their houses in the north still need financing in the south,” but some seniors can only get a reverse mortgage because they may have no credit [standing] as a result of short sales and foreclosures.
“The demographics are all right,” Pitbladdo insists, and the future is particularly bright for the “long-term player.” That’s why his company got into the sector “in the bad times – it’s cheap.” First Mariner typically produces 200 loans per month but is down to less than 100 now in a slower market environment.
Written by Neil Morse