As the landscape for reverse mortgage brokers continue to change with new third party rules from the Department of Housing and Urban Development, companies are looking to see how they can be successful in the future.
“Little by little, everyone is trying to find their way and figure out what the next move is and overcome certain obstacles and re-invent themselves,” said Jason Levy, CEO of Guardian First Funding Group. “Figure out how to navigate through the tumultuous times we’ve seen over the last few months.”
Levy’s company recently announced an asset deal with Urban Financial that is expected to close early next year and provides significant backing it can use to grow the Robert Wagner brand. But not every company has these types of opportunities and leaves the future of mortgage brokers up in the air.
“It’s going to be very difficult for mortgage brokers to be successful with all the new regulations,” said Dennis Haber, EVP of Agency for Consumer Equity.
New regulations seem to favor lenders that use their own funds to close, which is why the industry has seen companies like Great Oak Lending Partners join lenders that can help with the transition from broker to banker. While new third party originator guidelines from HUD don’t look as bad as Haber initially thought, the secondary market execution currently available poses a problem for brokers.
“The incentives seem to dictate that lenders could say we are better off decreasing wholesale and increasing retail because of the secondary market execution,” he said. What worries Haber most though, is the threat of additional scrutiny on the industry from politicians, especially at the state level.
“We as an industry need to show on the state and federal level that we’re policing ourselves,” he said. “We need to be pro-active, making sure that everybody is working on best practices to ensure everyone is doing what’s best interests of the borrower.”
If the industry can prove to legislators that it’s already already doing that, Haber hopes legislators will take a collaborative approach, rather than “legislate and make new laws about things they don’t totally understand.”