Finance of America Reverse (FAR), the second largest reverse mortgage lender by volume, announced Tuesday the availability of its proprietary reverse mortgage product “HomeSafe Standard” in the state of New York. This marks the very first proprietary reverse mortgage product available in the state, the only one of its kind to be approved in New York’s strict regulatory climate.
That climate is what made the road to approval in New York a bit protracted, according to Kristen Sieffert, president of FAR in an email to RMD.
“It has been a long road and we are extremely grateful for the opportunity,” Sieffert said. “We are committed to being responsible stewards of this approval to ensure that borrowers have positive outcomes well into the future.”
With the addition of New York, HomeSafe Standard is now available in 24 states. The viability of New York as a location in which to offer HomeSafe Standard rests on a couple of key factors, including the state’s relatively high property values and the presence of baby boomers, particularly in New York City.
“The sizeable boomer population and significant pockets of high-value homes make New York a key market for our future growth plans,” said Sieffert. “Our focus remains on our commitment to the overall borrower experience and our belief that the real support starts when loans fund. If we can replicate what we have achieved in other states then our expansion into New York will be a great success.”
With the achievement of HomeSafe’s approval in New York also comes a marketing opportunity to change the way people see the typical reverse mortgage borrower, Sieffert said.
“Marketing has to shift the public perception of the product and the industry,” Sieffert said. “Now that HomeSafe is in New York, there is even more opportunity to pivot the characterization of a typical reverse borrower. People don’t typically think of a person in a seven-figure Brooklyn or Manhattan home when they think of reverse [mortgage products]. We now have the opportunity to change that.”
The approval in New York covers only the HomeSafe Standard product, leaving other variations of the full product suite out of the state for now. FAR intends to change that over time, however. When asked if the company will seek approval for other HomeSafe products in the state, Sieffert responded, “Yes, and we are committed to a long-term, sustained effort in New York.”
HomeSafe Standard is a full draw, fixed rate loan that offers the ability to customize features for borrowers seeking low costs or maximum proceeds. It offers a lump sum payment with no initial limitations on available funds, no prepayment penalties and, like a traditional Home Equity Conversion Mortgage (HECM), is a non-recourse loan.
It was first made available to borrowers in September of 2014, while FAR operated under the name Urban Financial of America. Its initial rollout encompassed California, Florida, Hawaii, New Jersey and Texas before making product refinements and expanding availability to additional territories.
The initial HomeSafe offering would prove to become the first in a suite of other proprietary reverse mortgage options introduced by FAR. The original HomeSafe became “HomeSafe Standard,” which is also offered by American Advisors Group (AAG) under the name “AAG Advantage” in retail and “AAG HomeSafe” in wholesale.
HomeSafe Standard was followed upon in June 2018 by “HomeSafe Flex,” which allows for more flexible draw of the loan’s proceeds. The company added “HomeSafe Second” that September, the first-ever second-lien reverse mortgage.
Just a month after that in October, the introduction of “HomeSafe Select” marked the arrival of a proprietary Home Equity Line of Credit (HELOC) loan to the product suite, which was recently made available in the state of Florida. FAR also announced a shift to private label servicing for its entire HomeSafe product line in December 2018.
According to a late 2018 article in New York real estate news outlet Brick Underground, One Reverse Mortgage is seeking approval from New York state to offer their own proprietary product, while Reverse Mortgage Funding will aim to offer their private products after gaining approval to originate traditional reverse mortgages in the state.