[Updated] FAR Brings HomeSafe to New States, Rolls Out Product Changes

Finance of America Reverse (FAR) announced on Thursday a slew of occurrences related to its “HomeSafe” proprietary reverse mortgage product catalog, including new availability of HomeSafe Select in Hawaii and Texas, two additional options in the state of Colorado, and refinements to one product variation in the state of Florida.

The expansion of the general availability of HomeSafe product options is in response to high demand, particularly among borrowers with higher-value homes according to FAR President Kristen Sieffert.

“Demand for our proprietary HomeSafe products was incredibly high last year,” Sieffert said in a press release announcing the product expansions. “Qualified homeowners with million-dollar properties are responding quite favorably to the flexibility that these products afford them when building a well-balanced retirement plan.”

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Expanding HomeSafe Select to Hawaii and Texas

“HomeSafe Select,” introduced by FAR in October of 2018, marked the arrival of a proprietary Home Equity Line of Credit (HELOC) loan to the product suite. While recently made available in the state of Florida, median home values in both states average out to $1.2 million, according to data cited by FAR from GoBankingRates and Realtor.com.

“Eligible homeowners in Hawaii and Texas are uniquely suited to take advantage of FAR’s launch of HomeSafe Select, which can provide available credit via a combination of an initial draw and revolving line of credit of up to $4 million depending on the value of the property,” the company announcement reads.

These generally higher property values, when combined with a steady increase in each state’s aging population, have been identified as “key growth markets” for FAR, the company said. 1-in-4 Hawaiian residents are expected to be at least the age of 60 by the end of 2020 according to the Hawaii State Department of Health, while Texas maintains the third largest elderly population in the country according to that state’s Demographic Center.

While not specifically in the business of being a territorial lender, FAR’s focus is on expansion of the overall reverse mortgage landscape in 2020 according to Scott Norman, VP of field retail and director of government relations at FAR.

“FAR doesn’t see itself as a territorial lender, but one with an eye on changing the reverse mortgage marketplace across the country,” Norman told RMD. “We see 2020 as a year of expansion that will help ensure our clients have the largest product line with the most options in the country. The demographics coupled with home values in each state make the opportunity compelling.”

Full HomeSafe product catalog now available in Colorado, plans for other states

In addition to also making HomeSafe Select available in the state of Colorado, FAR is also making two additional products in the HomeSafe catalog available there: “HomeSafe Flex,” which allows for more flexible draw of the loan’s proceeds; and “HomeSafe Second,” the first-ever second-lien reverse mortgage. This bolsters the HomeSafe options available in Colorado, and now the full product catalog – including HomeSafe Standard – is now available there.

One of the major reasons cited for such an active expansion of HomeSafe in the state of Colorado is the state’s very active housing market, one of the best-performing housing markets in the country according to data from PropertyShark cited by FAR. The state’s senior population is also expected to grow as much as 61% over the next decade according to the Colorado Health Institute.

“Colorado has the potential to be a primary driver of growth for FAR as more retirees consider reverse mortgages as part of a diversified retirement strategy,” the company said in a press release.

In terms of whether or not other states that only have the partial HomeSafe catalog will be getting more options in the future, Norman told RMD that efforts are currently being formulated.

“Yes, there are multiple efforts already underway to add to our existing catalog,” Norman said. “We are always looking for new ways to bring real innovation to the marketplace. The goal is for our full product suite to be available in every state where we currently lend on the HomeSafe fixed rate, as long as state regulations allow for the different iterations.”

HomeSafe Select enhanced in Florida

This past July, FAR expanded the availability of “HomeSafe Select” – a proprietary reverse mortgage product which offers a line of credit, allowing a borrower to partially tap their loan’s proceeds while leaving the remainder in the LOC – to the state of Florida for the first time. Now, the state has enhanced the Select offering in Florida to now allows eligible Florida borrowers to receive a portion of their loan’s proceeds as an open-ended LOC. This option does not require monthly payments.

“[The lack of monthly payments is] a new feature that makes the product ideal for retirees seeking more cash flow in retirement,” the company said in its press release.

Last month, FAR announced other refinements to HomeSafe Select including access to a revolving line of credit, where up to 75% of available funds can grow for future use. It is also designed to provide an option for a borrower who may find other types of financing options too restrictive.

The high senior population in the state of Florida makes it an area of high interest for the reverse mortgage industry. Data from the U.S. Census Bureau indicates that 20.5% of the state’s total population is made up of seniors aged 65 or older. FAR has identified the state of Florida as a “priority market in 2020 and beyond,” according to its press release, citing rising housing prices in the area based on data from Zillow.

Recent HomeSafe moves, further expansion plans

FAR recently announced that the products under its HomeSafe catalog were reducing their age of eligibility to 60, and recently made HomeSafe Standard available in the states of Massachusetts and New York. The company also recently unveiled a new consumer campaign designed to show the potential benefits of HomeSafe products to borrowers.

Additional states remain on the table for FAR, but the ultimate decision to make an additional offering available in a new territory takes time.

“We are always looking towards the future and monitor trends in population and demographics so we can develop additional products that can enhance the overall borrower experience,” Norman said. “We expand into new states by using data to prove there is a market for the products. It takes a lot of time and resources to create new products. Now that we have a robust suite available, the goal would be to expand that full suite into additional markets across the country.”

The company is also planning on rolling out additional expansions related to its proprietary offerings in the future, according to FAR President Kristen Sieffert.

“We have an ambitious roadmap for bringing HomeSafe to new markets across the U.S. and I am confident that our new offerings will be received with the same enthusiasm we’ve seen in existing markets,” Sieffert said in the press release announcing the most recent HomeSafe expansion.

An additional HomeSafe variation could be a part of those expansion plans, Norman said.

“We hope to introduce some new variations to the existing suite this year and are working on a new product to add,” he said.

FAR is the second largest reverse mortgage lender by volume, according to November 2019 wholesale and retail endorsement volume data.

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  • It is good to see a reverse mortgage lender being so PROACTIVE. It does not matter if the growth in the industry comes principally from HECMs or proprietary reverse mortgages. Growth is desperately needed.

    The article ends with the the partial sentence: “FAR is the second largest reverse mortgage lender by volume…” The problem with our lingo is that we interchange the term reverse mortgage freely with HECM. Is that any longer legitimate? Absolutely not. The implication above is that the conclusion includes all reverse mortgages including both HECMs and proprietary reverse mortgages.

    But Chris also added at the end of the partial quotation/sentence above.”‘… according to November 2019 wholesale and retail endorsement volume data.” So this time, Chris gets off the hook because in an industry related website, by carefully considering the last part of the quoted sentence (split into two quotations) the reader should understand Chris was only referring to HECMs.

    Of course, then again who cares about how any lender did in the twelve months ended November 30, 2019 unless you were the third highest HECM producer for both the fiscal year ended September 30, 2019 (HUD’s fiscal year end) and calendar year 2019 but second in some exotic twelve month period that ended in a month like November 2019. The HECM race for calendar year 2019 for FAR was so competitive that according to RMI, RMF which was fourth in total HECM production for calendar 2019 was just 8 HECM endorsements away from taking FAR’s third position away from it. On the other hand, FAR was just 83 HECMs away from beating out One Reverse for second place for fiscal year 2019.

    One problem for those of us who were in the industry in 2007 was the quality of the proprietary reverse mortgages we had then compared to now. There was even a product that complemented and at times competed with HECMs; it was called HomeKeeper and was offered as part of Fannie Mae. Despite the claims of those currently offering proprietary reverse mortgages, when the mortgage implosion hit, these products were quickly withdrawn. HomeKeepers stayed around until HERA made HECMs even more competitive to HomeKeepers. Fannie Mae stopped offering them late in 2008.

    The good news for the industry is that even with poorer quality products, there is significant demand for them in today’s market. Yet looking at the size of the senior market today versus 13 years ago, demand for both proprietary and HECM reverse mortgage products are substantially lower today than in the smaller eligible senior population of 2007 and early 2008.

    Let us hope that the proactive attitude of FAR permeates the attitude of more lenders and “continued growth” becomes something more than a slogan or something found growing under a rug. Right now when applied to our industry it is simply unverifiable propaganda. One has to spin a lot of stories and still finding sustained growth today in reverse mortgage products is still an exercise in futility on the level of counting how many angels can sit on top of the point of a very sharp needle.

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