Just over five months into his role as President at Liberty Home Equity Solutions, RMD caught up with Mike Kent to hear what’s in store for the company as it navigates under the most recent changes to the Home Equity Conversion Mortgage (HECM) program and beyond.
Kent, who was previously president of loan originations for Reverse Mortgage Solutions, joined Liberty in late April, bringing with him more than 30 years of forward mortgage experience that has spanned leadership roles across various lending areas of expertise including sales, operations and secondary markets.
In a Question & Answer with RMD, Kent discussed why he chose the “corporate route” with Liberty, his plans at the company, thoughts on the Financial Assessment and non-borrowing spouse updates, and more.
RMD: You’re an entrepreneur who has primarily worked with other entrepreneurs in the past. Why did you decide to go the corporate route?
MK: First off, I don’t think one is exclusive of the other. Being an entrepreneur is simply a willingness to look in places others have not or make a bet on an idea that others may not be willing to make.
Being entrepreneurial is more of a state of mind or thinking. A good entrepreneur also weighs risk and return. None of this is absent at Liberty because Liberty always challenges the norm, and tries to think “outside the box,” but Liberty will never exceed investor or regulatory risk thresholds.
This year, and for the next few years we will be looking in areas that others may have overlooked or were unwilling to explore due to the perceived risk in the current lending and regulatory environments. However, Liberty believes that we must reexamine the potential risks as a necessary process to achieve potential reward. This is where being a part of a larger public entity has significant benefits.
Liberty and its parent company, Ocwen Financial Corp., have a strong capital position. This is the upside that I personally considered when joining the organization. In addition, our parent Ocwen is an incredible community-focused company that is dedicated to caring for the clients and communities it serves. Ocwen has granted 500,000+ sustainable modifications, 42% more HAMPS than any other servicer and $5+billion in principal reductions have been given.
This is a common theme shared at Liberty, namely “Caring for our Customer,” and this is what drives us to do everything possible to be better at everything we do.
What are/were your plans for the first 100 days at the helm of Liberty Home Equity Solutions?
Well, I have now been at Liberty for 150 days! Time flies when you are having fun!
The first 30 or so days I spent getting to know my incredible management team and what I consider a world class team of employees. I also wanted to know our history and our underpinning. It was great to learn that it truly is all about the customer here at Liberty.
I spent the next 60 days reviewing our strategic direction and all of our processes. Again, I was so pleased to find the customer at the root of everything.
For the last 60 days, we have more fully developed our forward-looking strategy, Liberty One, and we have begun the internal and external alignment necessary to achieve some extremely lofty goals.
Keep a close eye on Liberty going forward, I think you will be impressed at what we accomplish and the new spirit we bring to the industry.
Will there be a strategic shift for Liberty now that the Financial Assessment is in place?
Our strategic focus is always driven by the level of care we show to and provide to, our customers. This will not change under Financial Assessment.
We have re-tooled our processes to take advantage of the opportunities that Financial Assessment provides, together with other market opportunities such as increasing home values, and we are making some significant investments that we believe will propel us forward over the next 12 to 18 months.
Do you think the industry needs some new blood/entrants to spark some growth?
Expanding distribution is an absolute for the industry [as the market’s demographics evolve and our society recognizes that reverse mortgages when used properly can be a valuable tool for retirement planning].
Growing the HECM market is at the core of our forward-looking strategy. Having new ideas is a great way to energize an organization and an industry. Liberty is committed to leading in this area.
Do you see Financial Assessment and Non-Borrowing Spouse (NBS) resolutions as encouraging to new reverse mortgage entrants? How are you seeing the changes realized in the market to date?
Financial Assessment and the resolution of NBS issues are the two biggest opportunities the industry has experienced since introduction of the GNMA HECM securitization program.
The changes have made the product more secure for the borrower and the FHA MMI fund. These are critical to the long term success of our industry. Liberty already has begun taking advantage of these changes and it is showing up in real results and benefits to our customers.
Hypothetical: You’re sitting in front of one of the top-50 largest forward lenders who is thinking about getting into the space: What’s your pitch to him on why he needs to make the investment in reverse?
Funny you asked. We already have had this opportunity and the forward lender is in the process of being approved with Liberty to originate reverse mortgage loans. That is the extent of the strategy I am able to share at this time. Can’t give away everything!
Finish this sentence: The Financial Assessment is…
An incredible tool to better care for your customers and increase your business and productivity.
Where does the jumbo market go from here?
I think this is a real opportunity. I believe there is a significant market that currently is being underserved. It requires the right product in the right places at the right time.
There are products currently in development that meet these requirements. It requires a significant investment and a significant push to succeed. I am certain it is on its way.
Written by Team RMD