Figure Technologies, providers of alternative home equity tapping tools including a sale leaseback offering that is competitive with traditional reverse mortgages, announced a new hire last month that expands the company’s positioning as a vendor of tools that can help seniors in funding their retirement.
John Sweeney has been appointed as head of Wealth and Asset Management, with his resume including a stint as executive vice president of retirement and investing strategies at Fidelity Investments, indicating the company’s apparent desire to shift more squarely into the realm of retirement funding.
“I spent a large part of my career working on helping folks accumulate wealth, preparing for retirement,” Sweeney told RMD in a phone interview. “And, as we have the demographic shift of baby boomers starting to enter into retirement, they’re trying to figure out how to take an asset that they’ve worked hard over their career to accumulate, and translate that into income.”
As a retirement planning expert with a long resume of experiences, Sweeney alluded to a larger degree of familiarity with reverse mortgages just because of his tendency to look toward the larger picture of solving the retirement funding issues of seniors, but sees a product like Figure’s sale leaseback as potentially more advantageous because if the fact that it is age agnostic.
Trying to come up with a sufficient amount of money to fund some kind of life transition – whether into a new location or into some kind of assisted living facility – is made less difficult by the employment of home equity into the equation, he says.
“I felt like there was an opportunity to include the home as an income-producing asset as part of a retirement plan, and thought the alignment with the founding team here at Figure and the platform they were building was a place that I wanted to spend the next phase of my career,” he says.
Another big advantage that Sweeney believes Figure’s products have over more traditional home equity release products is the fact that both Figure’s HELOC and sale leaseback are age agnostic, unlike reverse mortgages.
“That’s actually a big advantage. The age does box out some people who might find this an attractive proposition for one of these life transitions,” Sweeney says. “If someone is moving from market A to market B for a new job, for instance, they may have something that’s keeping them from immediately moving to their destination market, maybe a kid who is finishing school and needs to remain in the home.”
Another differentiator Sweeney identifies is Figure’s embracing of new technology, which could potentially help their products become far more accessible than traditional home equity release.
“I see Figure fitting in particularly around blockchain that make home equity release more accessible than it has been traditionally,” he says.
Figure’s sale leaseback Home Advantage product was announced late last year as a potential alternative to a more traditional reverse mortgage. That product’s competition with reverse mortgages was not disputed by Figure CMO Wendy Harrington in an interview with RMD, who also emphasized that the Home Advantage product could serve customers that had fallen through the proverbial “cracks” in the government-insured program.
“Reverse mortgages don’t have a good reputation, and can’t help a lot of people because of the age demographic, or just the math if it works out. People don’t want to leave their home, and they don’t want to take on debt,” Harrington told RMD in January. “It can put people in a conundrum. So, I think people are excited to hear that there’s another option out there, and I would also say that this is a situation that’s going to evolve over time.”