Reverse Mortgage Funding recently rolled out a new software program designed to streamline the application process, a move that the Bloomfield, N.J.-based firm hopes will make Home Equity Conversion Mortgages more accessible to “forward” lenders.
The company’s new “Loan Qualification” engine allows brokers who use its proprietary Tango Reverse origination software to perform a kind of pre-assessment on prospective borrowers. As the broker inputs all of the client’s information — including income, debt, and property specifications — the system produces conditions, and can suggest compensating factors that would help him or her qualify for a reverse mortgage.
The engine is part of RMF’s plan to target originators who might be interested in working in both the forward and reverse worlds, national sales leader Mark O’Neil told RMD.
“This one was another grow-the-industry initiative,” O’Neil said. “We feel that not only will LQ make reverse mortgage specialists’ jobs quicker and easier, we feel that this engine will make the HECM program more accessible to traditional ‘forward’ originators.”
RMF spent more than a year working on the software, O’Neil said, and rolled it out to wholesale partners last week after its own retail employees had been using it for several months. It’s the most recent milestone for the company’s outreach strategy, which included the announcement of a new HECM for Purchase training program last week and a new television ad that seeks to demystify the reverse mortgage brand in the eyes of the average older American.
Of course, RMF isn’t alone in the “forward” play. C2 Financial, California’s largest mortgage broker, launched a HECM education program of its own last fall as part of a push toward “generational lending” — the idea that a single broker offering both forward and reverse products can develop long-lasting relationships with borrowers and their families that result in multiple loans.
After Skyline Financial, a top-50 mortgage lender, announced its intentions to expand its reverse operations through a partnership with ReverseVision last month, the software firm’s vice president of sales and marketing Wendy Peel compared generational lending to a “forward” lender offering Federal Housing Administration products as a gateway to meeting new homebuyers — and positioning themselves as the first contact when those homebuyers want to upgrade.
“That’s the loan they make money on,” Peel said of the more profitable upsize loan. “That’s the loan they want.”
Recent data from Reverse Market Insight shows that more originators are joining the industry: The number of active originators in May was 23% higher than at the same time in 2016, and according to RMI president John Lunde, some of that growth could be coming from forward lenders looking for new business amid a stagnant refinance market.
“That forces forward originators to look around for a new volume source, and some of them end up in reverse,” Lunde told RMD in an e-mail. “It’s also generally true that as volume increases in reverse, more originators come into play, and vice versa.”
RMF’s program will seek to tempt forward lenders with a familiar interface and a helping hand through the sometimes complicated world of reverse mortgage origination.
“It’s just going to greatly simplify the entire process of originating a loan,” O’Neil said.
Written by Alex Spanko