Reverse Mortgage Funding Moves Forward on REIT IPO

Reverse Mortgage Funding, the team behind Reverse Mortgage Investment Trust, has submitted a registration statement toward taking the REIT public later this year.

The company, which launched in late 2013 and has been on the forefront of new Home Equity Conversion Mortgage product development under the leadership of several former MetLife executives and other industry veterans, was reported to have been eyeing an IPO for the REIT, according to a New York Times article published last week.

According to a press release filed Thursday, the company has confidentially submitted a registration statement with the Securities and Exchange Commission in connection with a proposed initial public offering of its common stock, including the REIT’s expected acquisition of RMF.

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The company has reportedly raised in the ballpark of $230 million through private investors. It says the proceeds from the IPO will be used toward expansion of the business including origination, acquisition, servicing and investment in reverse mortgages and HECM-backed mortgage securities.

RMF and the REIT have yet to disclose the number of shares that will be offered or the price per share. The New York Times reported the REIT to date has sold 15 million shares at $15 a share to its investors.

Also yet to be determined is whether any selling stockholders intend to offer shares in the offering, according to the press release.

RMF has recently led the launch of a new fixed rate reverse mortgage, the HECM Choice, that allows borrowers to access an upfront draw as well as additional proceeds after a year post-loan closing. Last week, the company rolled out a new adjustable rate HECM, the HECM MAX5, which lets borrowers access the same amount of money as a traditional monthly adjustable-rate HECM, but reduces the lifetime interest rate cap to 5% over the initial rate.

Written by Elizabeth Ecker

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