Web-based reverse mortgage origination platform QuantumReverse has been awarded a new patent for its software’s handling of Financial Assessment (FA) requirements for Home Equity Conversion Mortgage (HECM) loans in its system. The patent, which lists QuantumReverse founder and CEO Thomas Martignoni as its inventor, protects a QuantumReverse product feature which allows its users to accomplish the necessary tasks related to FA in three screens with the assistance of automation.
Since announcing the launch of QuantumReverse in early 2018, Martignoni and partner Denis Shchasnovich have been hard at work further refining and developing the software, acknowledging that the reverse mortgage industry’s changes as well as the sweeping consequences of the COVID-19 coronavirus pandemic have further necessitated the reverse mortgage industry to embrace more technologies.
The patent, simplifying Financial Assessment
Simplifying the procedure of processing the immense amount of data that is required by the Financial Assessment is a tall order, and reinforces a truism that Martignoni has come to realize about the complexity of the HECM product.
“The challenge of the financial assessment is that it’s a pretty huge amount of data that has to be retrieved, assessed, validated, proven and documented,” Martignoni says in an interview with RMD. “It’s a complicated process. One of the things which I’ve learned when I got into the industry a long, long time ago was that more or less, everything is about documents. I was a bit naive. I thought it’s about the calculation of the reverse mortgage, but that’s the easiest thing. What lenders struggle with is documenting all that.”
The Financial Assessment accounts for one of the more complicated elements of a reverse mortgage transaction, so the new product features for QuantumReverse focus on a couple of key elements while also aiming to simplify the process for an originator availing themselves of the service.
“In the first step, we have a very effective matching of the credit report to the financial assessment,” Martignoni explains. “So, even if the credit report has to be pulled more than one time for whatever reason, it doesn’t mean that all the financial assessment information that has been done before breaks apart. It can then be matched, and the engine suggests how to match, what to update and what not to update.”
Then, each item can have documents attached, which can be referenced in the Financial Assessment worksheet.
“Everything is much, much more tied together than what is otherwise being done,” he says. “I know from other systems, they use seven different screens or pages to go through for the financial assessment. What is otherwise done in seven, we do in three.”
Renewed tech necessity stemming from COVID-19
Another element that QuantumReverse has been observing focuses on the COVID-19 coronavirus pandemic, which for many businesses has reorganized what counts as major priorities. The wide dispersion of employees from a central office environment to now working primarily from home has indicated that one of the core features QuantumReverse aims to bring to the industry is uniquely suited to facilitate a more outward embracing of technology, Martignoni says.
“One of the core concepts when we started QuantumReverse was to build it as a collaborative tool,” he explains. “In something like Google Docs or Google Sheets, it is very easy to collaborate with different people. You and other people can make changes, and it just works together. We’ve built that for the reverse mortgage origination platform. So, multiple people can work at the same time in the same loan.”
As it stands, many other loan origination platforms — including those prevalent on the forward side of the mortgage business — require that one person works on a loan at a time before another collaborator can come in. This creates a problem, especially if the workers are now decentralized due to the transition many have made to home-based work, Martignoni says.
“It can be pretty frustrating, particularly when everybody’s spread around and not in one office,” he says. “It used to be that paper went from one person to the other. They got the file, and then they started to work on it. But now, they’re in different offices or places and you cannot juggle that stuff around. Having the option to go into the loan when you want to, do the work, and not having to wait until somebody else gets out of the loan is way, way more effective now.”
Re-entering the industry in a time of change
After Martignoni left ReverseVision in 2012, the reverse mortgage industry has gone through an abundance of changes both in terms of regulations handed down by the federal government for the HECM program, to the newly-increasing prevalence of proprietary products as well as a reduction in overall loan volume stemming from the October 2017 reduction of principal limit factors (PLFs).
Martignoni has kept up with all of these changes and while acknowledging that the landscape has some major differences compared with the way things were in prior years, those changes are not deterring him from wanting to be a part of this industry again, he says.
“I started in the reverse mortgage industry in 2004, and I’ve seen many ups and downs,” he says. “So, you just don’t know how everything’s going to develop. The one thing is that by virtue of the demographics that we have and of the financial situation [for many seniors], the reverse mortgage is a product that’s needed. Whether it’s going to be the HECM or whether it’s going to be proprietary products, or also whether they’re just going to be new concepts and products that are coming. This financial instrument is needed.”
Being prepared for the industry’s future innovations is something that he and his company are keeping in mind, whether they come from the government-sponsored side or from the proprietary side, he says.
“I returned to the industry because I have missed it; I missed the people and the challenges of the industry — an industry that is never boring,” he says. “But mostly, I love to make good software.”
QuantumReverse was launched in 2018, and has rolled out to an initial group of customers as of late 2019. The first loans put into the system have successfully closed, Martignoni tells RMD.