Live Well Makes Forward Push Amid Reverse Mortgage Uncertainty

In light of the weakened state of the reverse mortgage market, Live Well Financial has begun rapidly expanding its forward mortgage operations.

The Virginia-based lender has maintained a forward channel since its inception in 2005, but its focus has largely been on reverse mortgages, which have historically comprised 80% of Live Well’s business. 

Bruce Barnes, executive vice president at Live Well, says the company will focus on promoting traditional mortgage products to its closed-loan sellers, wholesale partners, and retail branches.


“Our goal is to not shrink any portion of our reverse business, but to grow the forward side so that it is equal to or greater than our reverse operations,” Barnes says. 

Barnes says that while October’s changes to the reverse mortgage program have influenced the company’s decision, concerns about future principal limit cuts have propelled the move.

“More than anything. it’s the potential for upcoming changes that is motivating us to move much further into the traditional mortgage space,” he says. “There’s concern of the mortgage insurance fund being separated from the traditional side of business, and if that were to happen, the reverse mortgage product would have to be self-sustaining. I don’t think they’d have any other choice but to make additional adjustments to the program, which may cut further into volume and qualifying criteria for the consumer.”

Live Well joins a variety of players in the reverse mortgage space making concerted pushes into the forward lending market, including industry leader American Advisors Group and software provider Baseline Reverse, which recently launched a platform specifically designed to ease forward lenders into the reverse lending field.

Barnes says Live Well is taking steps to build security considering the uncertainty that looms in the space right now.

“This is a defensive move, a strategic move, and a smart move in the environment we’re in,” he says. “For those who aren’t considering alternatives, it may get very difficult for them if program changes are made.” 

Live Well is enhancing training for its sales staff so they can effectively originate both forward and reverse mortgage loans, and increasing its operational support for its forward channel. 

“It’s our advantage right now — we’re one of the few reverse mortgage lenders that has the opportunity to offer both reverse and forward products, and we are building training and webinars to help reverse mortgage brokers navigate the traditional mortgage space,” Barnes says. “We’re working very hard to help our brokers in the space navigate this so they don’t get left on the sidelines.”

Written by Jessica Guerin

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  • Some lenders have acted timely and responsibility to the permanent removal of a significant segment of the traditional HECM market. Others want to be seen as acting that way, but in fact, are probably on the verge of being too late and some have yet to respond at all. One person recently struck a tender nerve with many in citing the possible further reduction in Principal Limit Factors beginning next fiscal year; yet that seemed little more than stating the obvious.

    One of the few to understand the stagnation we were experiencing and create a response was Torrey Larsen in his creation of Synergy One as a forward mortgagee. Then as times changed and his covenant not to compete ended, Torrey began creating yet another reverse mortgage division. AAG even though a major reverse mortgage lender also realigned itself. Now others are doing the same as well. Small independents like Mike Banner realized that HECM demand was weak and took the necessary steps to be able to offer forward mortgages.

    Now we once hear again the false concept that HECMs must be self sustaining but that is nonsense. So once again education is needed. Currently the HECM program must pay 1) lender loss reimbursements, 2) the costs of assignment, and 3) provide a 2% reserve in the MMIF. The costs incurred by HUD for its personnel costs and the cost of their benefits in running the HECM program plus all other operating, general, and administrative costs are not paid for by HECM MIP but through the annual appropriations made by Congress to HUD.

    Even it seems some hold onto the idea that property charge defaults that financial assessment mitigates right now would be losses to the MMIF if financial assessment were not in force. While there may be a small amount of merit in that position, it has seemed from the beginning, financial assessment was overkill.

  • I welcome Bruce Barnes announcement with open arms! We need more of this, we need companies like Live Well to step up to the plate and take innovative steps to continue on with the HECM and the reverse mortgage!

    Some of the statistics Carmine De Sota refers to are right, however, we have a lot on the horizon to be optimistic about, such as the appointment of Brian Montgomery! Big move, which could mean big things and changes down the road!!

    I feel this was great timing for Bruce Barnes to make this announcement, I will be looking closely at the future of what Live Well will be unveiling!

    John A. Smaldone

    • John,

      Sowing doubt about what others say is one of the worst characteristics of the optimistic.

      You say SOME of the stats I use are right. So which ones are wrong? Quite frankly, I don’t believe you know or care. Your concern is not facts but putting down with doubt whatever you don’t like about what I present.

      We see similar attitudes expressed by attendees at our seminars. While we point out how HECMs can improve cash flow in retirement, they say that we focus on the negative that will seldom happen, since most seniors will be just fine throughout retirement.

      Please stop the undermining unless you can put down what others say with facts while providing an actual citation.

      • Carmine,

        I was actually complimenting you. I am not even going to degrade myself in getting into a debate with you on this!

        I know and care more than you know!

      • John,

        Somehow saying that “some of the statistics Carmine De Sota refers to are right” sounds like some of the stats are also wrong.

        There is no question that in part of it is a compliment but with a hard backhand across the face.

        So again I ask you which stats are wrong.

  • Diversifying into the forward market might make up for reduced volume, but hecm lenders may find out the hard way how thin the margins are to be competitive. Offering forwards to seniors that don’t qualify for a hecm due to LTV issues may be an alternative, but income qualifying with strict DTI requirements may prove much more difficult. How a senior can qualify for a loan size $150k+ on a fixed will be difficult, especially in a rising interest rate environment where P&I payments will increase. A senior who refinanced in the past 6 years will not give up a sub 3% rate when a heloc would be less costly and easier to qualify.

  • With further reduction in the PLF, on top of the other recent changes, I’m wondering how the HECM program is viewed by HUD, the FHA and Congress in the long run.

    There doesn’t seem to be any strategy at all, no long-term or short-term, and that seems rather irresponsible.

    Putting-out-fires with nothing more in explanation than “it had to be done” isn’t a strategy, It’s just a: “we’re doing this, live with it.”

      • Mr. McSherry,

        I just wanted to give you a chance to reconsider your statement. HUD never said that “it had to be done.” But nonetheless, that quotation certainly reflects a strategy, even if it is undisclosed. Mortgagee Letters are not written to explain what motivated HUD to take the actions mandated in a Mortgagee Letter.

        Two reasons for Mortgagee Letter 2017-12 is seen in the HUD Annual Report to Congress on the MMIF and another through spoken explanations by HUD staff. In an ideal world HUD would tell us why they do things either in the original Mortgagee Letter or in a separate but official explanation to the Mortgagee Letter. They do that to some degree in the latest in the questions and answers to the latest regs.

        We accept this situation because normally HUD provides that information through one way or another.

  • Mr. McSherry,

    Why are you saying that HUD’s only strategy is that “it had to be done?” It did not have to be done. Look at the last two years of the Obama Administration. There were huge losses and nothing was done to mitigate losses in future years. It was their intention and strategy to do NOTHING about PLFs or MIP to mitigate losses in future cohorts.

    Secretary Carson made the strategic decision that something had to be done about future losses. So he actually did something about the horrible losses that were clearly seen in the Annual Report to Congress on the MMIF for last fiscal year, rather than allowing them to be covered up as in the majority of the Annual Reports to Congress on the MMIF in the prior six fiscal years.

    If you do not read the Annual Reports how will you understand their overall message and thus grasp why HUD does what it does? If you have been reading these reports over the last nine years and concluding that HUD has no strategy, we can have a debate but I find nothing in your writing that is anything other than bias, bias that many in the industry find appealing yet bias nonetheless.

    In your latest reply you said: “I just clearly stated that HUD doesn’t seem to have a long-term strategy for the HECM program.” Do you read what you previously wrote? In your original comment you actually wrote: “There doesn’t seem to be any strategy at all, no long-term or short-term….” You declared HUD had NO strategy at all so why in your latest reply did you qualify your NO strategy position? In fact it seems you have changed your position to say that HUD has a short and mid-term strategy.

    Let us just say I believe in reading Annual Reports and Actuarial Reviews on the HECM portfolio in the MMIF. I have a difficult time trying to carry on a rational discussion with someone who keeps changing his positions in hopes of defeating a coherent argument. I never can find your research into primary sources reflected in your opinions. What I have always been able to find is bias. You have every right to opine based on bias but do not expect me to accept your bias unless I conclude your bias is substantially correct.

    • Veal wrote:
      “Why are you saying that HUD’s only strategy is that “it had to be done?” It did not have to be done.”
      This is what I wrote:
      “Putting-out-fires with nothing more in explanation than “it had to be done” isn’t a strategy,”

      I sure looks as though I wrote the exact opposite of what you’re wrongly asserting that I wrote: I wrote that it isn’t a strategy; which is what my entire message is predicated upon.

      Also, everything that I’ve written on the subject has clearly stated that the “October change” didn’t have to be done and should be repealed.

      So, there doesn’t seem to be a path to fault-finding victory for you in this, your, fabricated “argument,” no matter how you try to twist it around.

      • Mr. McSherry,

        Since my name is clearly spelled in many places in this thread I must assume you writing “Veal wrote” is somehow intended as an insult. I am not so easily insulted.

        I argue the October changes had to be made and Secretary Carson was right for doing it. A rise in the average loss per HECM from $26,441 for fiscal 2016 to the highest level ever at $35,447 had to be dealt with. The HECM is supposed to be a break even mortgage insurance program.

        Rather following in the steps of his some his predecessors, he refused to muddle the picture of the HECM program by apportioning some of the MMIF forward mortgage reserves to offset the losses of the HECM program in the HECM financial status reports.

        Again I cannot read these reports and reviews for you; however, by what you write, it is not clear you would understand them. This is why your arguments are opinion with no data backing them. Bloviating as you do about HECMs, shows how you are turning it into an art. That is not easy to do.

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