Reverse Business Garners “Forward” Attention at National Mortgage Convention

While reverse mortgages were not the central topic of conversation, at the Mortgage Bankers Association conference last week in Chicago one reverse-specific information hub received quite a bit of attention.

The conference, which had a strong forward focus for its 3,000+ attendees including insight from industry figureheads including government officials, housing economists, and political leaders who shared thoughts on mortgage banking and the greater housing recovery, also quietly earned attention from those looking to get into the reverse mortgage business.

A reverse mortgage information booth led by software provider ReverseVision with support from other industry participants saw a surprising amount of interest from those in the forward lending world. As the only reverse mortgage-specific booth at the conference, many lenders looking to get into the business stopped by to ask for more information.

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“We were really surprised by how many companies came to us and said, ‘Hey, we’re looking into reverse,'” Thomas Martignoni, ReverseVision founder told RMD. “It was a healthy interest,” he said.

RMD spoke with several lenders who do not yet offer reverse mortgages, but had stopped by the booth because they have either received requests from borrowers or they are seeing the potential demographic for reverse mortgages is on the rise, and are interested in getting into the business.

Getting in to the reverse business is not something that happens overnight, and many have tried without success. But Martignoni notes that while there are challenges in shifting into the business of reverse, the majority of questions from forward lenders were well informed.

“There was a good curiosity,” he says. “We had quite a few companies and people approach us and ask good questions—not just “What is a reverse?” but how to get into the market, what to expect, risks and challenges.”

A recent change in FHA regulations has also made it much easier for traditionally forward lenders to make the foray into reverse loans, as non-FHA-approved originators can now offer reveres mortgages.

Will non-reverse lenders continue to encroach on the market? The interest could be short-lived.

Martignoni sees two reason for the increase in attention. First, lenders see and hear the demand for reverse mortgages and want to broaden their product offerings. Second, their core business is lacking.

“They see the forward market is not performing at the moment, so they have some idle time over the next year to look into something new,” he says.

Written by Elizabeth Ecker

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  • I realize that what I’m about to write will probably not make me the most popular guy on the street; but, its time to say it after reading the above. When I left an exempt originator, as they were a federally chartered bank, and re-entered the world of state regulated origination I had to take my 20 hrs for NMLS and also my state required pre-licensing hrs. I then had to pass the exams. Fortunately, with many years on both the forward and reverse side I was able to do so. My time is spent 100% in the reverse industry. There were exactly 2(two) questions on those exams relative to reverse mortgages. I have people who originate for me that have never done a forward mortgage and taking  those classes was like taking Greek to them. I’m proud to say my people are very bright and after a few tries, by some, were able to pass the exams enabling them to do something they have never wanted to do….forward mortgages. Except for the RESPA portions, they might as well have gone to jet flight school. The relevance to the reverse mortgage industry was pretty much the same. I believe that this industry is significantly different from the forward industry, in so many regards, that it needs to have separate training and licensing apart from that required for forward mortgage industry originators. This is needed for the protection of our seniors as well as the protection of our industry.

    Our seniors deserve to be working with trained, knowledgeable, caring professionals who understand the seniors issues of aging in place, supplementing retirement, meeting medical needs, etc..They deserve to be working with those who know the reverse mortgage products and all the ramifications of their use. They do not need to be subjected to those who just” have some idle time over the next year to look into something new” and, just to find a new source of revenue. 

    It is my belief that if one were to research the origination of the loans that we read about in the news that are technical defaults, spouses removed from title, inappropriate product sales and more…..we would find that those loans were originated by those originators who are not full-time reverse originators, dabblers, newbies, or out of state telemarketing/internet originators who are far more interested in the sale than the senior.

    Is anyone in agreement with my thoughts?

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