Despite Changes, Reverse Mortgage Newcomer Sees Promise in Program

HomeBridge Financial made a concerted push into the reverse space earlier this year, and despite industry jitters about new principal limit factors, the company still sees promise in the Home Equity Conversion Mortgage.

“I have been in the reverse industry for 14 years, and the one thing I can count on is change,” Dino Guadagnino, the company’s national reverse mortgage program manager, told RMD.

Guadagnino came to his current position through Prospect Mortgage, which was acquired by HomeBridge last fall — shortly after he had been hired on at Prospect to help boost their Home Equity Conversion Mortgage profile. Af the time of the acquisition, Guadagnino said, the Woodbridge, N.J.-based HomeBridge had been closing a handful of reverse mortgages a month.


But management at the firm saw an opportunity in the reverse space, joining a growing wave of forward lenders that have attempted to use the HECM as a way to expand their business and capitalize on existing contacts.

“The reverse eligible homeowner is a market that has been underserved with the withdrawal of the big banks from this space, which we are excited to be serving,” HomeBridge divisional senior vice president and chief of staff Todd McKenzie said.

“HomeBridge is excited about the idea of jumping both feet into the reverse mortgage space,” McKenzie said.

The idea, at HomeBridge and elsewhere, is to take advantage of their existing relationships and referral partnerships to amplify the reverse message. Some in the industry have called it “generational lending” — the idea that a single loan company can provide mortgages for the duration of a customer’s homebuying life, from the first purchase to the trade-up to a reverse mortgage for funding retirement.

Mortgage companies of all sizes and types have seized on this idea, with Starkey Mortgage in Texas (now known as Certainty Home Loans) launching a reverse division earlier this year; Reverse Mortgage Funding developing software designed to attract forward brokers; and C2 Financial, California’s largest mortgage broker, partnering with HECM lenders to educate its originators on the products.

At HomeBridge, the plan has involved hiring nearly 30 reverse-specific loan officers, while also using the company’s existing team of nearly 1,000 forward loan officers to drum up referral business. So far, HomeBridge has cracked the top 50 retail HECM lenders according to the most recent data from Reverse Market Insight, logging 127 endorsements during the 12 months ended August. That’s good for 57th place overall.

Though the company entered the market just before large-scale changes to principal limit factors and mortgage insurance premiums, HomeBridge still sees the opportunity in HECMs — particularly considering the Department of Housing and Urban Development’s other October surprise regarding the HECM for Purchase product. Now that potential H4P borrowers no longer need to wait for the certificate of occupancy for new construction, Guadagnino said, the loan officer’s task isn’t quite as difficult.

“This has opened up opportunities, and is allowing our reverse specialists to have a conversation with builders that before was a lot more difficult,” he said. “The purchase opportunity just got a little easier.”

Written by Alex Spanko

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  • No one is saying that a newcomer cannot get a piece of the endorsement pie even in this fiscal year when the pie WILL shrink in relationship to the last fiscal year.

    It seems that the pie grows one year only to shrink the next. It seems the crust of the endorsement pie is not made from flour or graham crumbs but from RUBBER so that it can stretched one and allowed to shrink the next.

    I wish I could welcome newcomers into the industry in a year when endorsements are shrinking. That welcome must wait till fiscal 2019.

    • Not saying you are wrong in your analysis but must you ALWAYS be so negative and Doom and Gloom? Why not say NOTHING? Some things need no response but every single day, day after day, month after month, year after year, you are there to point out what is wrong, why it won’t work. I was always taught, if you do not have a an idea on how to make it better, if you don’t have a solution, DO NOT BRING ME YOU PROBLEMS! Do Not Complain and Point out The Negatives!

      • EricSD,

        You have a choice. Read or don’t read what I write.

        One definition of insanity is doing the same thing over and over expecting different results. If you expect to read an optimistic or pessimistic outlook from someone named The_Cynic, well, I question your ability to reason.

        I am a realist. Thank goodness, I am a positive one. Imagine just how dark my comments would be if I wasn’t.

        Perhaps you see the trends in the last decade as positive. Why you would do that, I do not know. Maybe you would like me to state how positive it is that our current endorsement volume is less than half of what it was in fiscal 2009. Or maybe you like me not to compare at all. I will not do either.

        John Smaldone is one of optimists in this industry who regularly comments in RMD. You should be thanking him not correcting me. You should be supporting him.

        You scream: “DO NOT BRING ME YOU PROBLEMS!” (Sic) Then you elevate your normal voice and say: “Do Not Complain and Point out The Negatives!” Yet as a realist, I ask: “Just what did you just bring me?” Complaints and problems with no real solutions except to all but tell me to not write anymore if it is not optimistic.

        EricSD, I like you but what you wrote perplexes me — hopefully to become a stronger realist.

  • Great optimistic article and a great attitude by Dino Guadagnino and Todd McKenzie.

    This is what we need and maybe this is what it will take, new companies with new approaches and enthusiasm to wipe out the negativity.

    Good luck HomeBridge along with all my luck given to Dino Guadagnino and Todd McKenzie. They will be fine!

    John A. Smaldone

    • John,

      First neither optimism nor pessimism mean anything; facts always prevail. There is the rule of salesmanship: You are attempting to sell to another salesperson.

      Look at all years since fiscal 2009. Has optimism or pessimism changed anything? Optimism did not extend our 100,000 endorsement years, did it? Did we get to three years of over 100,000 endorsements by optimism alone?

      Why people get bummed out is not pessimism. It is the authoritarian nature of optimism and its failure to change anything other than emotions and that only temporarily.

      I am a realist who remains positive about the industry generally but am also a realist. We will be checking the numbers on our new lenders over the next few years. But let me remind readers: Where is Walter and Ocwen today? In case someone has not noticed, trying to rid themselves of reverse mortgage operations. Few lenders count their reverse mortgage operations as their crown jewels but a few key ones do.

      • Positive realest, good points you bring out, however, those that are vanishing does not mean new ones will not take there place.

        HomeBridge is an example of what I am talking about. Sure, there is no way you can compare a HomeBridge to an Ocwen or Walter but it is a start!

        John A. Smaldone

      • John,

        I wish some large lender who understands our industry would come in to replace Wells, BofA, and MetLife.

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