Reverse Mortgage Giant AAG Planning to Launch Forward Division

American Advisors Group is set to launch a forward mortgage division in October, according to an online job listing.

“AAG is changing the nation’s view of a reverse mortgage, and now launching the forward mortgage option,” the Indeed.com posting for a “Forward Mortgage Inside Sales” position at AAG reads.

“Due to this exciting launch, we are looking to hire 10 forward mortgage inside sales representatives to start with us early October,” the post continues.

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The Orange, Calif.-based lender consistently leads the industry in reverse mortgage originations, and has played an instrumental role in introducing the products to the general public through commercials starring famous pitchmen such as Fred Thompson and Tom Selleck. But an attempt to enter the forward market would mark a major evolution for the firm, founded in 2004 by current CEO Reza Jahangiri as a reverse-focused lender.

The posting advertises a full-time position with opportunities for National Mortgage Licensing System approval and licensure in up to six states, as well as other training.

An AAG spokesperson said the company has no formal announcement at this time, but noted that AAG has its eyes on other industries.

“AAG is currently exploring ways we can help more seniors live more comfortably in retirement,” the spokesperson told RMD in an e-mail. “That includes testing demand for traditional mortgages, home equity lines of credit, and helping seniors sell their homes and relocate if reverse mortgages aren’t appropriate for them.”

The spokesperson also pointed to a recent Orange County Register profile of AAG and Jahangiri, which described preliminary plans for expansion into traditional mortgage products.

“We want to be agnostic from a product standpoint,” Jahangiri told the Register. “We want to be more of a solutions business versus a single-product business.”

Just last week, RMD reported on a website for AAG Residential Services, a real estate brokerage aimed at matching seniors looking to downsize with agents who have experience working with clients aged 55 and older.

In a pitch to brokers, AAG notes that it receives 50,000 inquiries from older consumers each month, including those who don’t end up wanting a reverse mortgage but might be interested in downsizing or receiving in-home assistance.

“AAG gets thousands of calls each day from seniors wanting to make a change — many wanting to sell their home,” the site reads.

As with the new forward operation, AAG did not directly comment on the real estate brokerage to RMD.

Only about 9,000 of the half-million people who called the lender in 2016 ended up signing on the dotted line for a Home Equity Conversion Mortgage, according to a recent Forbes profile of AAG and Jahangiri, and these moves together may indicate an attempt by AAG to capitalize on their vast quantity of leads by offering other products and services.

And AAG wouldn’t be alone: Multiple lenders and real estate brokers in recent months have recognized the potential for partnerships in a push toward “generational lending,” or the idea that one lender can provide loan products for all phases of a borrower’s life.

For instance, Reverse Mortgage Funding rolled out new software to target forward brokers interested in HECMs; California’s largest mortgage broker, C2 Financial, developed a reverse mortgage training program with the assistance of RMF and Finance of America Reverse; and forward lenders such as Skyline Financial and Starkey Mortgage have expanded into HECMs.

Written by Alex Spanko

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  • Well done! So many ways to monetize those leads I’m surprised it took this long for them to expand on their services. Real estate, LTC insurance and maybe establish a REIT for senior apartments and other 55+ housing. Don’t just provide financing but establish JVs to develop housing solutions. AAG marketing and lead program should be attractive for other industries to partner with them to create a powerhouse for senior solutions. I know there are regulatory hurdles to overcome but the opportunities are too big not to expand.

    • Roberta,

      That is one to view it. In my meager experience, I have seen what happens when companies try to diversify too rapidly especially into JV housing solutions. There is still the problem even in business of a “bridge too far.”

      • It does seem like Forward, Real Estate and Title is a lot to take on. However, all this must have been planned. This change blindsided the industry and I don’t think any company, especially one that big, can do stuff like this overnight. Panic no, but another sign that this business is getting tougher, again.

      • Howard,

        That is yet another view. No question about it being planned or not but seems more reaction than proactive choice. The issue is not if planned or not but rather how long has this been planned and how many times has that plan been delayed.

      • Diversification is smart business. They spend a ton of money on marketing and with these new changes the needle never moves so why not capitalize on all those leads and put them to work since they paid for them already.

      • Are you really, really sure?

        Look at Walter Investment Management Company. It diversified into HECMs (S1L) and servicing (RMS) them. That did not work out that well. WIMC lost more than its shirt.

      • Like any business, the success depends largely on how well it is executed. Still, there is clearly money to be made in business models that have succeeded for others in those markets.

      • Roberta,

        Interesting to see you caveat your claim that “diversification is smart business.” Sometimes it is and sometimes like with our friends at Walter, not so much.

        I worked at a Forbes 100 that kept trying to diversify into related businesses but failed after holding onto the enterprise longer than they should have. They lacked the right operations and management people.

      • If it was such a great idea? AAG and others would have entered the Markey YEARS ago. It’s no secret that less than 2 percent of eligible retirees ever use the HECM. With that abysmal market penetration? I would have fired my marketing director AND diversified my product offerings. AAG and most other lenders failed to do ANYTHING. Now, we see the idiots at HUD pretending (once again) they see and comprehend why this loan is administratively problematic. Instead of embracing the financial planning world and it’s creativity? They continue to allow mediocrity and incompetence rule the product and program.

      • Dan,

        What part of the financial planning world are you talking about. Legally my sweet 6 year old granddaughter is a financial planner. As a real estate broker, I am a financial planner as is my local Park Ranger.

        I have seen financial planners advise 80 year olds to take out rider free deferred annuities that do not start distributions until they are 92 years old when the only source of premium they had was the HECM line of credit and their only assets are their home and the nontransferable right to further Social Security benefits.

        When looking about both the 2000 crash and the 2008 mortgage crash, please explain how the financial planning industry as a whole helped ANYONE in the city of Stockton, CA. Dot coms were still being pushed just before their crash in 2000 by financial planners and all but a very few warned about the MORTGAGE crash. Most were overly focused on home values.

        While you may be sold on the financial planning community being a bulwark against MMI Fund losses from HECMs, I laugh. Even actuaries and specific segments of the CPA community are far better suited for that task.

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