Earlier this year, reverse mortgage origination platform market leader ReverseVision welcomed a new president to the company. Joe Langner has ample experience in the forward mortgage world, and has visualized a distinct opportunity to leverage many of the relationships he’s spent his career developing to push the stature of the reverse mortgage business segment forward in new ways.
At RMD’s virtual event HEQ: The Future of Home Equity in Retirement, RMD sat down with Langner to discuss his prior experience in the mortgage world, how he sees the landscape of the reverse mortgage industry and plans that he has as ReverseVision’s president to bring a new level of stature to the broader mortgage marketplace.
Reverse Mortgage Daily: How did you get to ReverseVision? Tell me a little bit about what brought you here.
Joe Langner: I joined ReverseVision in March of this year. My mortgage experience started after a 17-year career with Dun & Bradstreet. I joined Ellie Mae as the chief operating officer and worked there for about nine years. I joined right after we acquired Contour and Genesis, but we were a website business. [We] didn’t really have a loan origination platform. Sig Anderman and the board purchased Contour and Genesis, and that made them number two in the marketplace, Calyx Point was pretty prevalent in that market at that time. I was with the company prior to the introduction of Encompass[LOS]. Jonathan Corr joined a few months prior to my joining the company.
Between us and the rest of the team, we were responsible for bringing it to market. I was with them through our IPO that was fairly successful [and we were] pretty excited about that, and it enabled our company to expand and grow. After the IPO, I got recruited to work for a global ERP company, Sage North America. They sell ERP enterprise solutions for finance and accounting as well as CRM, mobile solutions and other SMB solutions. [We had] 150,000 customers in my division. They ended up reorganizing back into London, which is where their headquarters are, [which] freed up my [time] to pursue other opportunities.
I connected with Lionel Urban over at PC Lender, which is another loan origination platform. He is the founder, I was president, and we worked to basically position the business for growth and to help migrate the business to a potential acquirer. In August of 2017, they were acquired by Fiserv to serve some of their mid-to-small forward lender needs. So when that occurred, I got connected with Carmine Cacciavillani. Carmine is the founder of Palisades Technology Partners, they were one of the first web-based loan origination platforms. They had seven of the top-tier lenders using their technology including Bank of America, Washington Mutual, Ditech back in the day when they were doing 20,000 loans a month, and so forth.
[I served as] CEO there for a few years, and an opportunity came out to get back to a leadership role in Southern California. I’m a California guy and Blue Sage was on the East Coast. So, [I was basically] living on a plane for a few years there and was hoping to be in a leadership position with a local, U.S.-based software company.
[Then I was] connected with John Button and Jeff Spencer, our owners through TVC, and got pretty excited about the opportunity with the business. So I joined [ReverseVision] in March as the president. The goal that we have here, the overarching goal, is really that we see the reverse [mortgage] market as a huge opportunity, but not necessarily penetrated as effectively as it could be. [It contains] millions of opportunities, but it’s really still funneled with a very select few folks who can sell, explain and work with consumers.
Our goal here at ReverseVision is to leverage my experience in working with major forward lenders to see if we can connect the reverse engine inside of these borrower-lender technologies to expand the marketable opportunity for us. We’d like to treat reverse as just another product, just like a forward, a HELOC or anything else. Let’s make it as easy as possible for customers to become aware of the product, evaluate it versus other options, and hopefully grow the market. I was excited yesterday when one of your speakers talked about the 30 million folks in the United States who potentially could be a prospect for us [in] the reverse market.
Back in 2017, STRATMOR did research that identified about 18% of all borrowers – folks who actually got a loan – were potential reverse borrowers. It ended up being about 1.3 million [potential borrowers], and that was back in 2017. So, all I can say is [that the market is] even bigger now. But, if there are 1.3 million opportunities for us to close a reverse mortgage, actually only about 55,000 were really closed as a HECM loan. Most of the 1.3 million have never even heard about a reverse mortgage or may have a misconception of what the product’s all about.
So again, why did I join RV? [Because there is a] huge opportunity in an underserved market, and educational opportunity to expand it. My hope is that [we can use] my experience with the forward lenders so that we can try and bring these technologies closer together to better serve our customers, and have more “at bats,” so to speak, for our reverse investors. That way, they have more opportunities to win business.
Given this wealth of experience that you bring from the forward tech market, are there certain principles that you’re looking to implement on the reverse side?
Tech is a great component of solving problems, but it’s not the only component. It also has to be marketing, education and people. I look at lenders like Quicken in the forward market, where years ago when they were owned by Intuit. They spun off, then they started to invest, and over the last 10 years or so, they’ve been investing in their direct marketing approach for Rocket Mortgage. Their technology is good, but it’s not necessarily the best or completely cutting edge. What they did is they augmented great communication with their customers and marketed the ease of doing business with them. And then, obviously, they rolled out the mobile applications, and Rocket Mortgage and so forth.
What they’ve done is they’ve augmented technology with people, processes and education to grow their overall base. Now, based on either number of loans or total loan volume, they’re number one or number two in the marketplace. And again, technology has a play, but not the only play. How I see some of the things that I will bring to ReverseVision is more of a cultural and a philosophical approach to working with our customers. I’m very much a customer-centric person.
I like to partner with our customers and work collectively to see how we can solve business problems. Technology has a play, that’s great, but it could be other things. The other area that I’m very focused on is solving some of the problems that we don’t want to deal with, which [includes] compliance, and making sure that we have the resources, the people and we’re thinking in advance as far as the needs for our customers. Whether they’re mortgage lenders, brokers or banks. One hundred percent of our team is in the United States, because having people potentially access your data when your technology is from outside the U.S. [can] sometimes be a problem for lenders.
So, we’re consciously making sure that as we scale the business, that we scale it with the right people, and folks who are going to serve that need. The other thing that I think is important is that you’re prepped and ready for the next government change that’s going to happen. In 2015 when financial assessment happened, the team here at ReverseVision did a great job of anticipating and building it [into our platform]. We and our customers were leaders in solving that problem. Well, what’s the next thing that’s going to happen in our industry? Knowing that we’re in a highly regulated industry, having the right people in the product organization, talking with our customers, connecting with the legal community and the associations like NRMLA and the MBA are all going to help us make sure that we anticipate what the needs are.
And we start to plan for those today, rather than down the road when those regulations change. As far as the experience goes, it’s really making sure we’re nimble in listening to our customers, positioning and building our staff to react to things that are going to happen, and being there for customers before they even know that they have these needs. [Those are] part of the goals that we’re looking to achieve here at ReverseVision.
How about right now, or this year? What are some things that your customers or the industry can expect to see [which are] new in 2020, and going into 2021?
We’ve done a few webinars on it, we’ve been talking with all of our customers about what our strategy is. One of them is to build for the future. As I said, I joined in March of this year. I think [my] second week, we ended up sending everybody to work from home. It’s been a unique experience: joining a company, learning a product and [its] customers, and learning all the things you need to do. You need to learn first and understand what’s worked and what hasn’t worked, and then implement change.
It’s been tough with folks working from home, but have to tell you, this team is really strong. They’ve done a great job. [This team has] a lot of domain knowledge on the reverse industry. We have some real experts here that work very closely with our customers to help them out. However, as far as what to [look for ahead], one thing is our staff. We’ve actually increased our organization by 30% through this crisis. (I thank our recruiters and our team for doing interviews in parks and outdoor facilities.) We’ve added a big chunk of folks to the organization in development, QA, customer support and service, products and operations, really across the board. We’re building infrastructure to support scalability.
Our solution is a hosted solution, a web-based application. We’ve decided to invest and shift over to Amazon Web Services. So, we’ll have increased security for our customers: redundancy, backup and speed of the application. [The move will have] a lot of key benefits for improving the infrastructure. And then, we’ve also focused on building the product to support our new initiatives. We’re looking to extend the product with the use of application protocol interfaces (APIs) that can allow us to connect the ReverseVision engine – our modeling and calculation engines, and our overall loan origination software engines – building that to communicate with other software that are already being used by our prospects and our customers.
So, what you’ll see is actually in this fourth quarter, we’re releasing our version 9.0, which is the core infrastructure to be able to support that. We’ve made a significant number of improvements to support compliance changes that we can now do much faster, as well as support both direct customers who use the LOS, and API partners who are using it as an integration tool for people to use their application, but get the value out of the modeling, calculations and other things that are hosted in reverse.
So, you’re going to see a series of APIs being released, and then shortly thereafter, you’re going to start to see announcements of our partnerships with other LOS companies or point-of-sale companies. Tools that are in the market today, for example like a Mortgage Coach, or some of the folks that you’ve seen demos [from] over the last few months. The goal is that if I’m a loan officer working for a forward company, and I have a consumer that meets the potential criteria, we want to let them know that there could be a potential reverse opportunity for them. [We then want] to be able to quickly take the data and get the information to the consumer, so they can use it as part of their evaluation.
[To let them see options like] a cash-out refi, a home equity line, or a reverse [mortgage]. It gives us the opportunity to at least be able to position the product there. And by using APIs, it allows us to connect with technology that is already being used by that company. So, it’s not [someone has to] learn a new application or a separate system, we would really like to make it very easy for our customers. So, there’ll be a login to the product that they currently use, and then [they’ll] have that as an additional option when they’re talking to customers. It’s a lot of things coming out as far as the APIs, the infrastructure, and then the core foundation that we’ll be releasing beginning next month. In October, you’re going to start to see some releases of those products.
You’ve been busy since you started!
Yes, I’m very pleased with the team. They’re doing a really good job. And again, [with] kids at home, figuring out where they’re going to go to school, if they’re going to go to school, dealing with conference calls, and we’re a bit ‘Zoomed out’ these days. Where before we’d have a dozen folks in our room and we’d be able to bash out ideas and whiteboard them all out, we’ve had to learn how to do that in a virtual environment.
The challenge is [that] I wish we could do things as fast as we used to. It’s a little more difficult with the communication. But sometimes, you’ve just got to deal with what life has handed you and be able to go through those challenges. And so far, the team’s performing very well. I’m really happy with that.
Well, thank you for taking another Zoom with us.
With respect to home equity conversion, what do you think needs to happen in order for reverse mortgage products to be more widely adopted? Since you’re new to the reverse side, I’d think you have an interesting perspective on that.
Yeah, I think I take it back to what the speakers [said] yesterday. We talked about how there’s the 30 million or so prospects out there [based on the] STRATMOR research. If 1.3 million signed a contract, and only 55,000 ended up buying a reverse, that 1.3 million doesn’t even include the HELOC business, it’s just a primary mortgage. So there’s a huge opportunity I think really in sales and marketing, customer education and access, so we can help solve the problems of challenges with access through our API partnerships and so forth.
But I think to really see this take off, working with major lenders and major banks – to have them re-enter the reverse industry – while it could create some competition, I think that will help a long way in the acceptance of the product in the marketplace. Unfortunately, we still have some stigma that we have to deal with. People don’t understand how safe and really a terrific solution [a reverse mortgage] is. [Having] key sales and marketing efforts to educate the market [is important]. And then, there’s the technology. We’ve recently partnered with the MBA to expand the education of what reverse is all about to a broader audience.
And then hopefully, we’re going to connect our investor customers with these other forward lender customers and help grow their business. So again, I think it’s a NRMLA effort and an MBA effort, there’s the industry associations. I think it’s our lenders, what they’re marketing and how they’re going to communicate to their prospects and their general market. I think the service providers can also play a big role in that, as well.
Finally, how do you see ReverseVision as evolving to meet the needs of the mortgage market in general?
Our evolution is to continue to invest in the resources that are required to exceed our customers’ expectations. We are the market leader, we can leverage that opportunity. The vast majority of brokers and lenders who [work in] reverse are leveraging either all or some of our technology. And so when we work with lenders, either investors or forward lenders who are not in the market, by partnering with them, they also can be exposed to a broad spectrum of folks who are already in the industry that they can work with, to learn from and grow volume.
How I see us evolving, it’s [more about offering reasons] why someone should do reverse, and why it makes sense. We’ve been talking about being successful with customers for life. Well, if you want a customer for life, you want the first-time homebuyer programs, you want the refinancing program. What happens when they get towards the retirement age? And are they aware of what they could do to leverage their home equity, versus just leveraging the stock market or other areas that they’ve invested in?
So again, I see us as a business evolving to be more educational, [forging] deeper partnerships and relationships with our customers and looking to drive a broader use of reverse mortgages in the market as a general facet. Not just with a slice of business that do it today, but helping them expand their marketable audience so they can truly capitalize on the market potential that this product brings.