Recognizing a lack of traction for the product, Reverse Mortgage Funding has added to the list of ideas for boosting Home Equity Conversion Mortgage for Purchase originations with an in-house course and a new certification title.
The Bloomfield, N.J.-based lender opened up its HECM for Purchase certification classes to wholesale origination partners this week, a move that RMF national sales leader Mark O’Neil hopes will result in more H4P closings for both his company and the industry at large.
“We all recognize that it’s fallen short of its promise,” O’Neil said of H4P, a program that allows homeowners aged 62 and over to use a reverse mortgage when buying a new home. “So we were looking at: Why is it that more originators aren’t embracing this? Why is it that more H4Ps aren’t getting written in this country every year?”
The problem, RMF determined, was the greater number of hangups associated with the more complicated H4P transactions, which O’Neil says he’s seen scuttled at the last minute due to underwriting issues.
“You don’t ever want to blow a purchase deal, especially, and it’s really an area where you need to know what you’re doing,” O’Neil said, adding that the room for error may have turned off originators in the past. “If you don’t know what you’re doing, there are many opportunities along the way to shoot yourself in the foot.”
RMF’s six-module training program seeks to educate originators about those potential opportunities for failure, from marketing issues to precise contract language to the ever-present worries about underwriting. For instance, the program cautions HECM for Purchase originators to ensure that all parties — especially sellers — realize that they may be working on a slightly extended timeframe compared to those associated with private products not backed by the Federal Housing Administration.
“It’s a government program,” O’Neil said. “It’s not a loan that’s going to close in a week or two.”
RMF joins a host of other lenders and partners who have attempted to goose H4P originations: 1st Reverse Mortgage USA of Lakewood, Colo. recently created its own HECM for Purchase team, and appraisal firm Landmark Network, Inc. appointed a construction-focused leader to handle appraisals for new dwellings — including H4P transactions. C2 Financial, the largest mortgage broker in California, also launched a similar training program about reverse mortgages for originators, with one course developed in collaboration with RMF.
RMF has offered its training program to internal retail originators for several months, with a significant amount passing the final exam and earning RMF’s new “HECM for Purchase Certified” designation. That professional credential is valid for two years, O’Neil said, and also allows participants to use a special logo on their business cards and other marketing materials.
RMF’s new credential reflects a secondary goal of the program: making originators feel more confident when working with traditional H4P partners, such as real estate agents and financial planners.
O’Neil declined to provide RMD with any specific H4P volume goals, but emphasized that the company approached the program with a desire to tap into the lost potential of the industry’s “white whale” for all originators, not just those who work with RMF.
“We feel there is a lot more pent-up potential for this program, and we think this is a key step in better preparing our originators to go out there and grow this business,” he said. “We’re just looking to grow the overall industry, and a big part of that is growing the H4P business.”
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