Huron Valley Financial today announced the acquisition of Home Point Financial’s reverse mortgage operation, a move that will bring an existing team of nearly 40 Home Equity Conversion Mortgage employees to Huron Valley’s 1st Nations Reverse Mortgage subsidiary.
The firms declined to discuss the details of the transaction, though Huron Valley CEO and president Eric Bradley emphasized that the move was a strategic acquisition, and not simply a transfer of employees. Bradley noted that the Ann Arbor, Mich.-based Huron Valley had plotted to expand its reverse mortgage operation for some time, but wanted to grow through the purchase of an existing team with knowledge of the industry and established contacts.
“It says a lot about the industry, and what’s happening the industry, and it says something about the kind of commitment that Huron Valley is making,” Bradley told RMD. “There are so many companies that are interested in reverse, but when they get in, they find it’s not what they thought it was.”
The newly combined team — which will retain the 1st Nations name — will be led by Mike Gruley of 1st Nations and Josh Shein, who had previously headed up the Owings Mills, Md.-based Home Point’s reverse shop. Both praised the opportunity to work together.
“We can truly be a lethal force out there,” Shein told RMD. “We really think we can do some phenomenal things.”
Shein has spent 17 years in the reverse world, originally co-founding Great Oak Lending Partners in 2001 and then running the team at Maverick Funding’s Reverse Mortgage Network, which Maverick sold to Home Point in 2015.
The move will significantly bolster Huron Valley’s presence in the HECM marketplace, which Gruley began helping to build in August of last year: The firm had originated 23 reverse loans through the end of May, good for 75th place on Reverse Market Insight’s list of the top 100 Federal Housing Administration-approved lenders. Home Point, meanwhile, sat in 14th place with 328.
Forward, Reverse Growth Planned
He and Gruley plan to lead the reverse mortgage team in concert with Huron Valley’s forward arm, with a goal of providing a wide range of products and potentially generating referrals from both sides of the business. Huron currently has licenses to lend in 27 states, aiming for 35 by the end of the year alone through the acquisition of Home Point — along with a plan to fund more than $150 million in HECMs each year.
“The growth in our industry has to expand not just in the reverse — forward lending, reverse, builders, and all of that business,” Bradley said. “Having the right platform to serve all those channels is difficult.”
Bradley also plans to restart Huron Valley’s efforts to become a Ginnie Mae-approved issuer of Home Equity Conversion Mortgage-backed securities, a process that Bradley said the firm had explored but delayed for various reasons over time — including the current integration of the 1st Nations Reverse team.
Home Point’s decision to sell its reverse mortgage operation simplifies matters for the company, which had previously had multiple HECM-related initiatives: In addition to its own reverse mortgage team, Home Point made an investment in Longbridge Financial, a Mahwah, N.J.-based HECM lender, last fall.
Expansion Might Not Stop Here
The former Home Point reverse team will remain at its existing headquarters in Maryland, Shein said; because Home Point had staffed locations in New Jersey and California with both forward and reverse employees, staffers at those facilities have been shifted to new locations nearby. All of the loans currently winding through the Home Point pipeline will be completed under the 1st Nations name, Shein said.
Shein and Gruley have plans to grow the team over time through new hires, and Bradley wouldn’t rule out further expansion through another strategic acquisition of an existing reverse mortgage firm.
“We think there is tremendous opportunity in the industry for people who want to make a change, be with a different kind of group, a different kind of leadership,” Shein said.
Written by Alex Spanko