Top-15 lender NewDay USA has decided to completely exit the reverse mortgage industry in the wake of upcoming changes to the federally-insured home equity conversion mortgage program, according to sources with knowledge of the situation.
Company executives announced on September 7 that the reverse mortgage division would stop originating new HECMs effective immediately, an executive familiar with the situation told RMD. NewDay will not close any more loans and plans to transfer its entire reverse mortgage pipeline to another company. The exit has been attributed to the HECM program overhaul, which begins October 1.
The Fulton, Md.-based company did not wish to make a statement on the topic, a public relations spokesperson told RMD on Wednesday.
NewDay Financial, which began doing business as NewDay USA in 2012, was ranked ninth in endorsement volume for July 2013 according to Reverse Market Insight data, with 87 loans that month. Overall, it was the 13th-largest lender for loan volume in 2013, with 508 loans comprising a 1.3% market share.
In addition to its reverse mortgage division, NewDay USA also originates VA, FHA, and conventional forward mortgages.
Written by Alyssa Gerace