Virtual Bank Leaves Wholesale Again, Will Focus on Retail

201004130745.jpgOnly two months after VirtualBank Seniors Lending Group returned to the reverse mortgage business, it’s closing its wholesale channel and keeping its small retail footprint said management in a conversation with RMD.

“Upon the recommendation of the senior management team, VirtualBank Seniors Lending Group has made the strategic decision to shift from a wholesale and retail reverse mortgage origination model to one focused solely on retail originations,” said the company.

“The wholesale management team has left VirtualBank Seniors Lending Group on extremely good terms and we look forward to working together with them in the future on various opportunities in both the forward and reverse mortgage areas.”

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During our conversation, it’s clear the company felt the wholesale business has gotten extremely competitive in the last month and is part of the reason it decided to exit. With lenders releasing updated HECM products, dramatic pricing changes, and volume trending lower they weren’t sure there was a need for another wholesale lender in the marketplace.

VirtualBank originally entered the business in 2007 offering a suite of proprietary products to address the needs of borrowers who could benefit from a higher loan limit. However, as the secondary market fell apart so did Virtual Bank and it left the industry only five months later.

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  • I am stunned that they would recruit an entire “wholesale team” and only five months later, shut it down. I really feel sorry for those folks who left a previous job and are now being kicked to the curb.

    Virtual Bank will NEVER be a prime time player in this industry!

  • It is surprising how soon after this lender rejoined the industry that it started cutting back its footprint. First one must wonder about their long-term commitment to wholesale partners at any time in the future and also about their commitment to the industry. One would think that if they had recent experience in the industry, they would have had some contingency (other than withdrawing) plans in place to ride the turbulence we are all experiencing.

  • The barriers to entry for a new wholesaler – at this time – are almost insurmountable. Without GNMA approval, there would be little hope for survival.

  • The barriers to entry for a new wholesaler – at this time – are almost insurmountable. Without GNMA approval, there would be little hope for survival.

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