While some mortgage bankers have closed reverse mortgage operations in recent years, one family-owned mortgage business based in Denver, Colorado has recently decided to start offering the Home Equity Conversion Mortgage product and is looking to grow the offering for borrowers.
The family-owned and -operated mortgage banker, American Financing, has been in business since June 2001, after its founders, Damian and Gabie Maldonado, started originating loans out of their home two years earlier. The company has since grown into a national mortgage banker licensed in 50 states, and has just recently begun a concerted effort market fixed rate reverse mortgages and HECM lines of credit, says Meghan Keller, reverse mortgage manager for American Financing.
In part, the opportunity stems from a recovering home market, Keller told RMD in an email.
“There’s a ton of opportunity because so many markets around the country are underserved,” Keller says. “For example, here in Denver, home values are up over 10% over the past year, continuing a long-term trend that’s grown equity for a huge number of homeowners in the area. Too many older residents in the region don’t know how valuable all that equity can be, and how a reverse mortgage can help them tap into it. We aim to change that.”
American Financing corp operates employs salary-based mortgage consultants and is a direct lender. The company has started its reverse mortgage marketing in the greater Denver area and across the state of Colorado and is testing both traditional and online marketing approaches with optimism.
In particular, the company sees potential in the reverse market due to demand demographics, Keller says.
“We expect a surge in reverse mortgages for two reasons,” she says. “First, Americans as a group are getting older. Already the average life expectancy in this country is 85, and one-fifth of Baby Boomers will be 65 or older by 2030. The addressable market is growing fast. We also expect more of those eligible to opt for reverse mortgages to take advantage once they fully understand the benefits and protections: zeroing out a mortgage payment while staying in their home and tapping equity for key expenses such as long-term care is an easy sell.”
Written by Elizabeth Ecker