FAR Introduces New HomeSafe Consumer Campaign

Finance of America Reverse (FAR) has introduced its first major advertising campaign aimed to introduce prospective customers to its suite of HomeSafe proprietary reverse mortgage products. The campaign, titled “Introducing HomeSafe,” is described as a multi-channel effort to introduce the various products and their potential use-cases while offering consumers a potentially new conception of the kind of people that reverse mortgage borrowers are.

Key to the goals and aims of the campaign are a series of HomeSafe customer testimonial interviews, which are aimed to provide substantive perspective on how the products have affected their financial lives.

Unscripted customer interviews

“The unscripted videos were shot at a loft in Venice Beach, Calif. and highlight borrowers from Orange County, Los Angeles, and San Francisco while touching on their experience with FAR’s proprietary HomeSafe loans,” according to a press release announcing the new campaign.

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After having sent an open email to FAR’s current roster of customers, each participant in the campaign responded because of certain retirement goals they were able to achieve by employing a HomeSafe product.

Finance of America Reverse
A look at some of the customers featured in the unscripted interviews.

“For example, cash flow from these proprietary reverse mortgages enabled clients to achieve diverse goals, including paying off mortgage balances and other debt; reducing the amount of time spent at work; purchasing homes for children to give them financial stability; generating cash flow for travel and vacations; and making home repairs to continue living in a dream home,” the release said.

A focus on “mass affluent” baby boomers

A key target market for FAR in attempting to communicate the potential benefits of HomeSafe products include the “mass affluent” class of the baby boomer generation, older Americans with a majority of their wealth tied up in their home equity. On top of this, seniors now possess a combined record total of $7.19 trillion in home equity, according to a recent tabulation by the National Reverse Mortgage Lenders Association (NRMLA) and data analytics firm RiskSpan.

“Americans now hold more home equity than ever before, providing the greatest opportunity in recent history to create the resources necessary to truly enjoy a longer life,” said Kristen Sieffert, President of FAR in the campaign’s announcement release. “Our hope is that these interviews provide those who are entering retirement with an understanding of how the right combination of proprietary products and resources can help suitable borrowers optimize their home’s equity to live with financial freedom.”

The opportunity to serve this demographic is expected to be a major focus for FAR going forward, Sieffert added.

“We have just scratched the surface of helping a huge demographic tackle uncharted retirement challenges and will continue to bring more options to market based on growing demand,” she said.

“Introducing HomeSafe” is a four-part campaign, which will have subsequent extensions gradually rolling out into the second quarter of 2020. Subsequent additions will include more from the Venice Beach interview subjects, in addition to other voices while the campaign focuses on digital media channels.

“The more relevant HomeSafe becomes, the more we give originators the opportunity to be successful,” said Ashley Smith, Director of Marketing at FAR in the release. “I had been deep in the research process and felt that I had a good picture of the HomeSafe customer, but to meet face-to-face and shake hands with these folks took it to a different level.”

Recent HomeSafe developments

FAR’s HomeSafe product line includes a subset of several products: 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.

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.

FAR recently announced that several HomeSafe products were being refined, now offering access to a revolving line of credit for its HomeSafe Select loan, while the alternative HomeSafe Standard and HomeSafe Flex loan options now have a rate option of 4.99%, which is aimed to allow borrowers access to an additional low-rate option. FAR also recently reduced the age of eligibility to 60 for HomeSafe products, and made HomeSafe Standard available in the state of Massachusetts.

FAR is the second largest reverse mortgage lender in the country according to October retail and wholesale endorsement data compiled by Reverse Market Insight.

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  • Of course, the reason for really pushing HomeSafe is the profit it brings to FAR. There is nothing wrong with that and it does help make the sale easier for originators the more that a positive picture is made of borrowers. The Venice Beach experience sounds like “Photo Shop” for borrower stories.

    HECMs are not unique when it comes to nonrecourse. All reverse mortgages are nonrecourse transactions under federal law. See 15 USC 1602(cc). Unfortunately far too many people seem to think that FHA insurance makes HECMs nonrecourse. That is one of the worst myths in our industry. HECM model mortgage documents make it clear that the loan itself whether endorsed by FHA or not is nonrecourse.

    Item 11 on Page 6 of 14 of the FHA Model HECM ARM Mortgage states:

    “11. No Deficiency Judgments. Borrower shall have no personal liability for payment of the debt secured by this Security Instrument. Lender may enforce the debt only through sale of the Property. Lender shall not be permitted to obtain a deficiency judgment against Borrower if the Security Instrument is foreclosed. If this Security Instrument is assigned to the Secretary upon demand by the Secretary, Borrower shall not be liable for any difference between the mortgage insurance benefits paid to Lender and the outstanding indebtedness, including accrued interest, owed by Borrower at the time of the assignment.”

    Notice that the amount of forgiveness is unrelated to the amount of reimbursement that the lender receives from FHA. It is true nonrecourse. Too many are confused about this issue. What it does not mean is that the borrower can never owe more than the value of the home. That is nonsense.

    For example, at HECM termination, if the borrower wants to keep the home the borrower must pay the balance due. If the value of the home is less than the balance due, the borrower is not allowed to pay 95% of the value of the home at termination and still retain the home.

    Unfortunately, there is no way to know that the following is true: “FAR is the second largest reverse mortgage lender in the country according to October retail and wholesale endorsement data compiled by Reverse Market Insight.” RMI does not provide information about reverse mortgages generally, just HECMs. Using reverse mortgages and HECMs interchangeably is a horrible habit in our industry since proprietary reverse mortgages are rising in number.

    Remember not all animals are tigers but all tigers are animals. So not all reverse mortgages are HECMs but all HECMs are reverse mortgages.

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