A group led by former New York Life employees is in the planning stages of a standalone reverse mortgage business that will ultimately offer both Home Equity Conversion Mortgage (HECM) and proprietary reverse mortgage products in a “socially responsible” way.
“We are thinking about the reverse mortgage as part of an overall financial plan,” says Michael Gordon, founder and managing partner for the new company, Longbridge Investments LLC. “Americans should be thinking about their house as an asset.”
Gordon, who most recently served as head of new business ventures for New York Life Enterprises, which included developing Home Equity Income Solutions LLC., a startup designed to originate and securitize HECMs and proprietary reverse mortgage loans, is working together with a team including former New York Life employees Manjiang Xu, John Curran and Ben Woloshin, as well as economist Christopher Mayer and former MetLife manager Melissa Macerato.
The New York City-based company is in the early stages of funding its business with plans to hire and origination team in the coming months.
“We learned a lot from our experiences at New York Life that will help us,” Gordon says. “We see this as an opportunity and as something that is underutilized by retirees.”
Longbridge plans to grow a team of licensed loan officers for a phone origination team as well as a team of face-to-face originators. The company will begin offering HECM loans with the goal of offering proprietary products in the future.
“The key will be having a product choice so we can have the right product for the right person,” Gordon says.
Gordon declined to comment on whether the company was looking into acquisition possibilities.
With respect to the recent research from the financial planning industry indicating reverse mortgages may be a viable retirement option not only for those who truly need to tap their home equity but also those who do have retirement savings, Gordon says Longbridge is open to working with borrowers of this type.
“We are interested in doing research on incorporating alternative assets into portfolios,” he said. “There is no question this asset should be adding value to retirement portfolios.”
New York Life was rumored to have been planning a reverse mortgage entry earlier this year, but to no avail.
Written by Elizabeth Ecker