Selling Home Builders on Reverse Mortgages, One H4P at a Time

Call a HECM for Purchase (H4P) a “sleeping giant,” a vastly underutilized product—call it whatever you like. One full-service mortgage banker, however, is calling H4P the bulk of its reverse mortgage business.

An estimated 90% of the reverse mortgage business for Concord Mortgage Group is H4P, according to David Weinstein, senior loan officer and manager of the reverse mortgage division at Concord Mortgage Group, a Division of NOIC, Inc., a full-service mortgage banker in Westerville, Ohio.

Weinstein started the reverse mortgage division at Concord about 4-5 years ago, when the company began offering the product. Today, the lender currently offers HECMs to clients in eight states and Weinstein estimates that Concord originates roughly 75-100 H4P loans annually.


“Concord is, for the most part, a purchase shop,” Weinstein told RMD. “My domain focus is really on HECM for Purchase and my emphasis is continuing to educate the real estate community, builders and agents in the benefits of the H4P.”

A 26-year veteran of the mortgage industry, Weinstein has previously specialized in new construction lending for the last 15 years. It is this experience that allows him to approach reverse mortgage sales from a more holistic approach, especially when it comes to establishing relationships with regional homebuilders.

Most of the deals Weinstein works on involve new home construction. In fact, some of Concord’s homebuilder partners primarily build communities for buyers age 55 and older.

“By saying we’re going to focus on the product, meaning the house—that gets some doors open for us,” Weinstein said. “When we talk about how H4P can increase sales, that becomes a benefit because builders want to sell homes.”

Concord Mortgage Group offers a variety of different loan programs, including reverse mortgages, conventional loans, VA loans, Federal Housing Administration loans, conventional loans and jumbo products.

On the reverse side of the business, Weinstein has been primarily working with Epcon Communities, a Dublin, Ohio-based builder specializing in the age 55-plus market with properties across 19 states.

In efforts to best serve its customers, each Epcon Builder Partner selects locally preferred lenders that provide the most honest, viable and competitive financial solutions available. With the help of these partners, Epcon customers are equipped to choose financing options that best suit their needs, such as conventional mortgages, FHA/VA and HECM loans.

Weinstein has been working with Epcon for at least eight years now, almost as long as he has been living in Columbus, Ohio.

“Since their demographic has been primarily that Boomer client, through necessity we’ve been able to offer the H4P, which they have used for an unbelievable success,” Weinstein said.

When working with homebuilders, Weinstein explains to them the various positive reasons for why someone would get a reverse mortgage. He emphasizes that the H4P product allows the homebuyer to save their cash by requiring them to put down only a fraction of the home’s purchase price as a down payment, while also eliminating their monthly mortgage payment.

Since the inception of the H4P in 2009, endorsement volume for the product has yet to eclipse 4% of total HECM volume in any given fiscal year, according to HUD data. In Fiscal Year 2015, H4P represented just 3.94% of overall HECM endorsement volume, but this share has been progressively increasing every year since the product’s inception, when it accounted for only 0.48% of overall volume.

Despite this miniscule penetration rate, there are some originators across the country who have been successful in making H4P their sole focus. The keys to their success have been largely due to relationships established with home builders, real estate agents, financial planners, among other financial services professionals working with retirees and Baby Boomers.

For reverse mortgage originators looking to establish relationships with homebuilders in their areas, Weinstein suggests that when reaching out to contact builders, reinforce the benefit that H4P has not only for buyers but for builders as well.

“It [H4P] maintains values in communities because now there are no short sales; it allows buyers to add more options in the home because they are now paying 35-50 cents on the dollar; and it allows people who usually wouldn’t qualify for a loan to now get a loan to help generate sales in that market,” Weinstein said. “Those are among the three big things that I emphasize when I reach out to homebuilders, if nothing else.”

Written by Jason Oliva

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  • The HECM for purchase program (H4P) product has been a sleeping giant in my opinion. For the builder it is a great tool and a great way to sell their models and homes close to completion.

    Sure, it is difficult to bring the H4P product into the picture at the beginning of construction or when a to be built property is sold and the buyer needs to be qualified immediately.

    However, the H4P product can play a major roll for the builder in the example I mentioned in the first paragraph. What a great advertising tool for the builder. When a builder can advertise:

    “Seniors 62 years of age or older, you can now purchase one of our upgraded models with as little as 45% down or less. The best part, the rest financed with no mortgage payments for the rest of your lives! Call us and find out more!”.

    Don’t you think that will stir up a lot of interest, it sure will!

    Like Jason also points out in his article, the real-estate broker, what a great opportunity we have with them. I don’t feel we focus enough on the relator. We need to meet with the broker and show him or her how his or her agents can increase sales by utilizing the H4P product effectively. Then set up a time to speak before the whole group and show them how to increase their sales!

    We need to push harder on the H4P product and understand more how to capitalize on it fully!

    John A. Smaldone

    • John,

      Perhaps you live in a state where the influx of seniors exceeds their outflow. The H4P opportunity is not as great here as in places like Phoenix or the St. Petersburg MSA.

      There is little doubt that the H4P is a sleeping giant in places like Florida. So why aren’t the originators there plugging into this potential source of originations?

      What I don’t get is advertising that a reverse mortgage will result in “no mortgage payments for the rest of your lives!” Isn’t the payment of the balance due at termination, a mortgage payment and don’t more HECMs terminate within 9 years of their origination than at any other time? A substantial portion of those terminations are not because of the death of a borrower. So why state something that is untrue about the nature of a reverse mortgage in an advertisement?

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