1st Reverse Mortgage USA Leverages Major “Forward” Footprint to Fuel Growth

As companies like Bank of America and Financial Freedom announced they were exiting the reverse mortgage business, one of the largest mortgage bankers in the country has been quietly preparing to make big moves into the industry.

With more than $3.4 billion originated in “forward” mortgages, Cherry Creek Mortgage is a top-25 lender according to data from the company’s website.

Based in Greenwood Village, Colo., the company has built a small reverse mortgage presence through 1st Reverse Mortgage USA, a division focused exclusively on working with seniors. Since 2008, the company has grown to work with more than 100 community banks that represent 350 locations according to Dan Harder, vice president of 1st Reverse Mortgage USA.

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The company has flown under the radar of most in the industry, endorsing 251 HECM loans in 2009, making them the 30th largest reverse mortgage lender according to data from the Department of Housing and Urban Development. But that’s all about to change, as 1st Reverse Mortgage USA begins to leverage the strength of its parent company’s 50 branches and more than 300 “forward” originators to grow its reverse mortgage business.

“[Our originators] all want to increase their business and we’re introducing reverse mortgages as another opportunity,” says Harder. “In the forward space, they’ve been inundated with refis, but after the number of refinances slowed, they started taking a look at what’s next.”

Bringing on originators with little to no reverse mortgage experience fits in nicely with 1st Reverse’s community bank business, which is built around providing a significant amount of education and co-originating strategies in order to be successful, he says.

“It’s all about education,” he says. “Our coaching has worked on the bank side and we plan to bring it to Cherry Creek loan officers.”

The company is also utilizing the financial strength of Cherry Creek to get approved as a Ginnie Mae HMBS issuer. Already approved as a forward issuer, Harder says it has the financial wherewithal to meet the agency’s requirements. “I don’t see any reason why we wont get [GNMA] approval,” he says.

Better execution will also help to drive new business through their wholesale channel, which Harder says was quietly launched earlier this year and currently has five account executives covering 22 states, with hopes to be licensed in as many as 40 by the end of the year. Also in the works is a correspondent channel, which could launch as early as June.

More growth is expected from a new direct retail sales force, which should have around 10 loan officers in the next couple weeks. “Our long term goal would be to get up to 25 direct loan officers strategically placed throughout the US by the end of the year,” he says.

One could argue the company is growing in too many place at once, but Harder says it’s part of its strategy to diversify.

“It’s really about balance for us,” he says.  “It goes beyond reverse mortgages, it’s also about the forward side and to be a full service company [for consumers].”

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