One Reverse Mortgage is rolling out its first private reverse mortgage product, which the company hopes will meet the needs of a larger audience looking to tap home equity during retirement.
The San Diego, Calif.-based reverse mortgage lender, a subsidiary of Quicken Loans, will allow consumers to borrow up to $4 million using the Home Equity Loan Optimizer (HELO) product, according to the company’s website.
There are also fewer property restrictions compared to the Federal Housing Administration’s Home Equity Conversion Mortgage.
“If you live in a high-value home, condominium, home with solar panels, or any other residence with features that do not qualify for an FHA HECM, you still have the ability to qualify for our new HELO reverse mortgage product,” One Reverse Mortgage said on its website.
The loan also allows borrowers to access 100% of funds at closing, and consolidate debt as part of the mortgage process.
Gregg Smith, CEO of One Reverse Mortgage, told National Mortgage News that the company plans to securitize the HELO, and is considering other variations of the product in the future. At the moment, the product is only available through the retail channel, but the company has plans to eventually expand into the broker channel as well.
Consumers suddenly have multiple different proprietary reverse mortgage options, with several of the largest lenders rolling out their own products over the last year. For an industry that has long been reliant on the FHA-insured reverse mortgage, the wave has been trumpeted as a positive diversification for lenders and originators — as well as the government.
“I don’t think [the HECM] was ever envisioned to be 100% of the market,” FHA Commissioner Brian Montgomery said during a press call recently. “I think folks would like to see that expand; I would like to see the market expand. There are some proprietary products out there, but we pretty much dominate the market right now.”
One Reverse Mortgage had not responded to RMD’s request for comment at press time.
Written by John Yedinak