LTC Global Acquires Another Reverse Mortgage Company

NewImage.jpgLTC Global has acquired a controlling equity interest in EquiPoint Financial Network, a San Diego, CA, based reverse mortgage lender.

Last year, LTC Global agreed to acquire a majority interest in another reverse mortgage lender, Next Generation Financial Services (NGFS), which is currently operating as a division of 1st Mariner Bank.

“The EquiPoint acquisition is part of our strategy to expand our financial product offerings to the senior market,” said Thomas A. Skiff, Chief Executive Officer of LTC Global.  “We expect substantial synergies between EquiPoint and NGFS. We admire what Bruce Barnes and the EquiPoint team have accomplished in the industry so far, and we’re looking forward to working with them.”

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EquiPoint’s principal Bruce D. Barnes will continue to serve as President of the company.

“LTC Global’s resources and experience in the senior market will complement EquiPoint’s business. In particular, LTC Global’s financial strength will enable EquiPoint to underwrite, close and warehouse a substantial inventory of loans,” said Barnes.  “We also anticipate significant marketing synergies,” he said.

The deal makes a lot of sense for a couple reasons. As long as First Mariner is in bad shape financially, there isn’t much NGFS can do as part of the bank.  However, if LTC Global wanted to take the company out of First Mariner, they wouldn’t have any licensing to originate loans since they’ve been operating under the bank’s charter.

By acquiring a controlling interest in EquiPoint −which is licensed in 21 states − they can quickly hit the ground running if they choose to move NGFS out of the bank.  RMD asked whether the company planned on doing that and they wouldn’t comment.

EquiPoint is the 18th largest reverse mortgage lender in the country according to data from the Department of Housing and Urban Development.  The company endorsed 478 HECM loans during FY 2010.

Terms of the deal were not disclosed.

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  • Will the merger be successful? While mergers seem like good ideas, many times that is all they are. Too often personalities get in the way. We’ll see if it works out. Like any honeymoon expectations run high.

  • On November 16, 2009, Admin reported: “EquiPoint Financial Network (EFN) announced it has partnered with private investor Michael White and Hibernia Capital Advisors to enhance the company’s capitalization, management and strategic planning efforts.” He then goes on to say: “The San Diego, CA based reverse mortgage lender is also working on a new marketing campaign which will be based around helping customers better plan for the future using the slogan, ‘Smart Planning & Peace of Mind’.” In the article Admin also states that the company claimed: “The company’s goal is to have the highest loan to agent ratio in the industry by the end of 2010.”

    Then on September 1, 2010, Admin stated: “Only days after the Federal Reserve issued a proposed rule to reign in deceptive reverse mortgage advertising, Oregon Live is reporting that San Diego, CA, based EquiPoint Financial Network is mailing out fake checks to seniors that read ‘U.S. Economic Stimulus Package Approves New Payouts for Seniors’.” If that were not bad enough, Admin then goes on to say: “The advertisement also includes a picture of CNBC financial host and author Suze Orman saying, “look into reverse mortgages, they’re a good way to go”. A representative for Suze Orman Media said it’s considering taking legal action against the company because it never authorized the use of her photo.”

    The marketing plan looks like it was a great success — dummy checks and the phony endorsement of Suzy Orman. Of course, company management stepped up to declare its responsibility for the misleading ad by confessing it was not its fault but the fault of some unnamed renegade branch, a statement which reassured all (LOL). Since EquiPoint did not make to the end of 2010, there is no way to verify it achieved its announced goal for funded loan to originator ratio – a dubious mark of distinction to begin with.

    LTC Global is a brave white knight, maybe too brave.

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