The reverse mortgage proprietary market continues to heat up, with Liberty Home Equity Solutions announcing the official launch of a new proprietary offering on Thursday. Aimed at seniors with higher home values, the new product allows access to funds well above the current Home Equity Conversion Mortgage (HECM) program loan limit of $726,525.
Called “EquityIQ,” the new product allows access to funds of up to $4 million, features lower upfront costs with no mortgage insurance premium and is described as having easier eligibility requirements for home purchases when compared to its more traditional reverse mortgage offerings. There is also an option available that does not include origination or servicing fees, and EquityIQ maintains the non-recourse feature found in a traditional HECM.
“Liberty’s new proprietary reverse mortgage is designed to help owners of higher-value homes convert a portion of their home’s equity into the funds they need in retirement,” Liberty says in its marketing materials. “It can be a smarter solution for homeowners aged 62 and over than a traditional Home Equity Conversion Mortgage (HECM) or private reverse mortgage.”
Liberty also notified its wholesale partners that the new proprietary offering could serve as an opportunity to reach new, previously untapped customer segments, while also offering a no-cost origination option through Liberty’s own portal.
The release of EquityIQ follows from news earlier this year that Liberty and its parent company, Ocwen Financial Corporation, had created a proprietary reverse mortgage pilot program, which the company revealed in comments made during an investors call in February.
“Proprietary products are becoming more readily available in response to HUD program changes,” said Cathy Dondzila, chief accounting officer and SVP of Ocwen Financial Corporation in the February call. “We successfully launched a proprietary jumbo reverse mortgage pilot program in the fourth quarter [of 2018], and continue to explore other, new products and alternatives to capture more of the market.”
While Ocwen recorded overall losses in their fourth quarter and full year 2018 results during that presentation, Liberty’s reverse mortgage program served as a point of positivity, recording gains in the same period of time.
The entrance of Liberty into the proprietary reverse mortgage market comes at a time where the industry is looking at private products as a potentially new overall opportunity in the wake of generally reduced HECM volume, and EquityIQ joins existing non-agency offerings from competitors like Finance of America Reverse, Reverse Mortgage Funding, Longbridge Financial and One Reverse Mortgage.
Liberty currently sits in sixth place on Reverse Market Insight’s list of top Federal Housing Administration-approved reverse mortgage lenders, with 1,695 HECMs having been originated during the 12 months ended in June.
Find more information on EquityIQ at Liberty’s website.