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.
“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