Reverse Mortgage Market Sees Broker Count Boom

ReverseVision added 733 mortgage brokers to its RV Exchange (RVX) loan origination software between July 2013 and June 2014, including 379 brokers added in the first half of 2014, the reverse mortgage tech provider has revealed. 

This “staggeringly high number” of brokers added on the RVX system is a strong indicator that the industry may see an uptick in reverse mortgage loan volume, Rob Katz, ReverseVision Executive Vice President, tells RMD. 

“The fact that loan volume for the reverse market is low, but there’s more people getting into it, to me, is a leading indicator that that lower loan volume is temporary,” he says. “Moving forward we should start to see the loan volume ticking up because of it.”

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After reporting an 18-month low in June, reverse mortgage volume began to make a slight comeback in July. Endorsements for home equity conversion mortgages (HECMs) rose that month 4.2% to 4,092 loans. In contrast, HECM volume dropped 12.7% in June from 3,927 in May. 

Contrary to signing on so many brokers, recent data shows retail is still outperforming wholesale in reverse mortgage volume across the most recent month of data analysis by Reverse Market Insight. The trend has been fairly consistent throughout the past several years and was clear in May when retail volume showed a 12.2% increase, while wholesale/broker volume saw just a 2% rise. 

But the slowdown of originations on the forward side, the “dead” refinancing market and ReverseVision’s marketing efforts all contribute to boom in broker interest, Katz says. With the exception of last month, the number of brokers signing up on the RVX system has increased each month compared to their respective months in 2013. No broker signup data before January 2013 is available, since that was the first month ReverseVision began tracking it. 

“The vast majority of these brokers are forward lenders that are getting into the reverse space. In 2013, it was less deliberate; I think there were brokers that probably just did one [reverse] loan,” Katz says. “In 2014, there’s been a sea shift; when interest rates in the forward world started going up and the refi market started dying, brokers in the traditional space panciked. Now brokers have two choices: Get out of the business or expand the types of products they have — and expanding into the reverse space makes sense. We’ve tried to stoke that flame.”

In June, ReverseVision integrated Landmark Network’s appraisal services to the platform, enabling RVX users to order appraisals with one click. 

Earlier this summer, ReverseVision also launched RV University, an online education platform created to teach mortgage professionals about the reverse mortgage industry. Since then, ReverseVision began offering a free online course on key program changes related to non-borrowing spouses and updates to principal limit factors, which went into effect Aug. 4. 

Written by Emily Study

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  • “This “staggeringly high number” of brokers added on the RVX system is a strong indicator that the industry may see an uptick in reverse mortgage loan volume” and “Now brokers have two choices: Get out of the business or expand the types of products they have — and expanding into the reverse space makes sense. We’ve tried to stoke that flame.”

    Really? This should alarm anyone who cares about the integrity of the industry and the consumers that rely on it. Will we see an “uptick” in the very misinformation that we have been trying so desperately to correct? Such as ” You don’t have to pay back the loan” or “The money in your credit line earns you interest”, or “Take your wife off of title and get the higher loan amount….You can always put her back on title after closing” or “Take your title out of trust and avoid the approval cost and hassle, you can always put it back in trust later” or “You want the fixed rate, as protection against rising adjustable rates” or “You can always refinance later” or “Your estate automatically has a year after you pass away to deal with the loan”, to name just a few, many of which are commonplace in the Forward world.

    Reminds me of a conversation with a high-volume realtor where I was promotng the virtues of a HECM for Purchase. “What a nightmare, he screamed! I will NEVER do that again!” Really, who did you work with I asked? “Well, my usual L.O. who handles all my referrals” he replied. How may HECM’s has he done, and how many H4P?, I asked. Silence…….

    Will that 1 hour of C.E. covering “non-traditional mortgages” for the 8-hr Safe Act C.E. requirement (not necessarily or usually on Reverse Mortgages by the way) be enough to educate the L.O. that dabbles in the R.M. world and does 1 or 2 loans before giving up? Hardly. We know that Reverse is Nothing like Forward. Maybe its time to mandate detailed education, testing and licensing for RM Originators. Wells Fargo and their extensive training for newbie RM LO’s is Gone. And just having the big lenders process the loan for the inexperienced RM LO is not answer.
    God help us all.

  • This is just the refi market drying up. Nothing new…seen this in the past. brokers will go where they think there is money and then realize it’s not always greener on the other side. And why wouldn’t they when reverse is paying 6-8 points on the backend. This may remind them of their subprime days…

  • History is repeating itself – the same thing happened when the Subprime market crashed. They needed someplace to go, and Reverse was where they went, but most didn’t stay – they didn’t have the patience.

    Now a different market is entering the Reverse space, but for the same reason. Their market died, and they need someplace to go, or quit. And Reverse just happens to pay pretty well, for the moment, so they’re coming here. Time will tell if they have the patience to stay. Personally, I doubt it. They’re too used to going fast … it’s tough to slow down when you’re used to driving a high performance car.

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