Since the reverse mortgage for purchase was approved by Texas voters in November and lenders began originating it earlier this year, the first lenders are reporting that they are beginning to close the newest reverse mortgage loan type available in the Lone Star State.
Others have loans in the pipeline they expect to close shortly, and are seeing even more potential in Texas than in other areas of the country due to the demographics and real estate market there.
Georgetown Mortgage, based in Georgetown, Texas, reported this week that the company has closed the first H4P in Texas and anticipates more demand based on education efforts currently under way among real estate professionals in the state. Georgetown operates a reverse mortgage division under the name Reverse Mortgage Focus.
The first H4P was originated by Georgetown Mortgage Branch Manager Rebecca Williams for a newly constructed home in Lumberton, Texas.
“As a closed loan seller operating in several states, our operations team has managed hundreds of H4P loans since 2009, but it was very gratifying to be part of a little slice of history in the grand state of Texas,” said Reverse Mortgage Focus National Sales Manager Barry Scoles.
Open Mortgage, based in Austin, Texas, says it has been building a pipeline of HECM for Purchase loans in Texas since the product was approved for lenders.
“There’s a lot of enthusiasm for the product among the people in Texas,” said Joe Morris, senior vice president of Open Mortgage’s reverse mortgage division. “Texas didn’t really participate in the Great Recession. It’s amazing to see the new construction going on. [Originators] are calling on Realtors and they are getting business out of it.”
Both lenders have educational efforts under way, with Open Mortgage having one team member authorized to teach continuing education classes to Realtors and Georgetown Mortgage having already conducted many successful sessions.
Last May, prior to the loan approval being voted into law, the company applied for approval under the Texas Real Estate Commission to teach a 3-hour continuing education class to real estate agents on the use of the HECM for Purchase. The first class was conducted in July in San Antonio. To date, more than 400 agents have attended the course.
“We knew there was some risk launching our educational initiative that far ahead of the November election; however, we felt strongly that getting out in front of this new option was important,” Scoles said.
But lenders are encouraged by the potential they are already realizing with Georgetown’s first loan closing this week and more H4P loans anticipated to close soon.
“Other states may not be as enthused, because it’s not as new.” Morris says “In Texas, we’re hitting the market and starting to call on Realtors. We’re starting to see some more momentum.”
Written by Elizabeth Ecker