Longbridge Reports Record Reverse Mortgage Volume, Expands Wholesale Operations

Mahwah, N.J.-based reverse mortgage lender Longbridge Financial reports that it has seen a significant uptick in loan volume during the COVID-19 coronavirus pandemic, which has led to a major expansion of its wholesale operations and staff in order to compensate for the higher level of business during the second quarter of the year.

That higher level of business has already led the company to increase the size of its operations team across multiple roles like opening, processing, underwriting, closing and funding, with the size increase of the division coming in at 47% according to the company. Loan submissions have been increasing notably since March, when the onset of the pandemic’s effects in the United States started to come further into view, the company describes.

“As interest around reverse mortgages peaked, the subsequent flood in loan submissions reached record-highs from both existing loyal clients and new brokers looking to enter the space,” Longbridge said in an extended statement provided to RMD. “This sudden increase in volume impacted the operations team in working to deliver Longbridge’s industry-leading turn times. Expanding the wholesale team in its efforts to maintain the highest level of service became pivotal.”

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Record volume leads to operational change

In terms of how the company realized it needed to do some repositioning to account for the increased business it was seeing, there was already a plan in place to give attention to the broker side of the equation in addition to focusing on a more recent proprietary offering. The onset of the pandemic expedited the company’s plans.

“Our business plan entering 2020 was to further build out our broker distribution channel and roll out our new Platinum LOC product,” said Melissa Macerato, EVP of sales and marketing at Longbridge to RMD. “With these two initiatives, we projected a strong growth year and with the industry impacts of COVID, it accelerated our time frame unexpectedly. Luckily, we responded quickly to the spike in volume and are well positioned for a big second half of the year and beyond.”

In terms of the volume itself, the divide between more traditional Home Equity Conversion Mortgages (HECMs) and proprietary Platinum offerings hasn’t changed significantly, but Platinum is continuing to gain momentum particularly in light of some other lenders pulling their proprietary offerings off the market recently, Macerato said.

“HECM products continued to capture most of the volume, but our Platinum product gained substantial traction as one of the only stable proprietary products in a volatile secondary market when other investors had to pause their programs,” she said. “We expect our Platinum program to continue gaining momentum as we are dedicated to its continued evolution, including the expansion of Platinum LOC state footprint.”

Previously in April, Longbridge made a series of adjustments to its Platinum product line to account for some of the additional difficulties created by the pandemic, while also reinforcing the company’s commitment to maintaining those products’ continued availability.

Scaling up wholesale operations, adding new roles

Early on during the effects of the pandemic, Longbridge identified that the higher level of business necessitated some changes on the operational side, Macerato said.

“Our senior management team recognized it early during the pandemic and formulated a plan to work remotely while simultaneously hiring and training staff,” she said. “It was a huge undertaking but we’re now in an excellent position to serve our partners moving forward.”

In order to best position company operations for future success, Longbridge has created new roles for existing key employees in an effort to streamline operational processes. To that end, Longbridge has promoted Theresa Antonucci to VP of operations and Adrian Prieto to VP of the wholesale division.

Antonucci brings her previous 15 years of reverse mortgage experience, transitioning to her new position from her previous role within Longbridge as director of operations. Prieto has 20 years of prior mortgage industry experience with the last 16 of those years being dedicated primarily to reverse, having joined Longbridge in November 2019 as assistant VP and wholesale lending sales leader.

“Amid this record-setting volume, we are pleased to be poised for significant growth in the Wholesale space,” Antonucci said. “To better meet demand, we have assembled a team of the best wholesale processors in the industry with over 50 years’ experience combined between them.”

Expanding the roles for both Antonuci and Prieto is integral to the new strategy for the company’s operations division, according to Macerato.

“Both Theresa and Adrian are experienced senior managers with proven track records for leading successful teams,” Macerato said. “These expanded positions give them the ability to focus their attention on strategic business development and ongoing operational process improvements.”

New hires for the operations team, ‘Reverse Made Easy’

For the people who are now joining Longbridge’s operations team, new hires are experienced in the way that reverse mortgage operations work due to previous positions at other leading reverse lenders. One new hire includes Minh Vu, who will lead the company’s wholesale processing department and who comes with over 11 years of experience in the mortgage industry, with five of those years devoted specifically to managing reverse mortgage processing teams.

Also coming to Longbridge as a part of this new operations push is Lloyd Kushner, who joined the company earlier in 2020 as its head of underwriting. Kushner has over 30 years of mortgage banking experience, with the company describing that he “has already had a significant impact” on the underwriting team.

“Together, we are adjusting workflows to make the process more efficient so we can close loans more quickly for our partners,” Antonucci added. “We are prepared to serve all of our wholesale clients with the service and support they’ve come to expect from Longbridge – whether they’re well-versed in reverse mortgages or new to the reverse space altogether.”

An additionally important component of this new operational strategy is “Reverse Made Easy,” a program Longbridge designed to streamline the process of attracting forward brokers to the reverse mortgage business while facilitating much of their needs in getting up and running within the reverse space. After launching earlier this year, Reverse Made Easy has added 120 new broker partners, with plans to add several more in the coming weeks, the company said.

According to data from the U.S. Department of Housing and Urban Development (HUD) and compiled by Reverse Market Insight (RMI), Longbridge Financial is the seventh largest reverse mortgage lender in the country by volume, recording 1,764 loans over a period of 12 months ending in April, 2020, with 73% of its volume coming from the wholesale division.

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  • While HECM closings take place 3 to 4 months before endorsements, there are no public reports on total reverse mortgage production for lenders nor are any public reports for lenders as to HECM closings. While there is a total industry wide report on HECM Case Number Assignments there is no such public report by lender. There are no public reports on HECM applications and no public reports on reverse mortgage applications.

    So the only way to even try to verify the Longbridge self-proclaimed “increase of the division coming in at 47%” is by looking at the HECM endorsements for Longbridge for the twelve months ended May 31, 2020 and for the twelve months ended May 31, 2019 in either the RMI Lenders’ Report for May 2020 and May 2019 or go through a lot of work to derive the same information using the HUD HECM Endorsement Summary reports covering those same periods. Like most people would conclude, using the RMI reports seems far more efficient and time saving to gather the information we are looking for.

    According to RMI HECM endorsement production for Longbridge for the twelve month period ended May 31, 2020 was 859 HECM endorsements. The total HECM endorsements for the twelve months ended May 31, 2019 was just 593. That is an improvement of 266 HECM endorsements for a 44.9% in one year. While that is not a perfect match to 47%, it is close enough.

    In those same periods, total industry wide HECM endorsements grew just 7.5% or 2,469 endorsements (33,048 for the twelve month period ended May 31, 2019 to 35,517 for the twelve month period ended May 31, 2020). Longbridge’s HECM endorsement market share for the twelve month period ended May 31 2020 was 2.4% but just 1.8% for the twelve month period ended May 31, 2019.

    So while the claims of Longbridge cannot be verified, from what we know, they do not look unreasonable. Yet with just 2.4% of market share, growth of that nature is easier to come by than for companies like AAG or RMF. Originator musical chairs might explain a great deal of the growth.

    Nonetheless, Longbridge has done what many of its peers only wish they could have done in the last twelve months. So a hearty congratulations is in order to the sales and management team at Longbridge.

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