The reverse mortgage industry is populated by a multitude of lending entities in the forms of direct lenders, brokers and partners, and sometimes it can be an exhaustive process to keep up with all the moves that each company makes to solidify a mark on the industry they operate in. When a company manages to break into the top 10 lenders, that milestone understandably garners a lot of attention.
Orange, Calif.-based Ennkar, originally founded in 2014, broke into the top 10 reverse mortgage lenders for the first time according to data tabulated by Reverse Market Insight (RMI) in January of 2021, according to figures breaking out wholesale and retail endorsement data. To get a better idea of what drives Ennkar, RMD sat down with co-founder and branch manager Omar Ennabe.
An auspicious beginning
Ennabe, who in the 2010s worked as an employee of Advisors Mortgage Group, decided to become independent and start his own business in 2014. After operating as a key point of contact for reverse mortgages there, he became a broker partner with a couple of different firms. One of those was Blue Wave Funding, and seeing the volume that he was doing, they approached Ennabe.
“Blue Wave Funding approached us, saw the amount of volume that we were doing and asked us to become partners,” Ennabe tells RMD in an interview. “They wanted to become a bank, and to stop brokering their deals. There were three owners, and then they asked me and my partner to join, bringing it up to five owners. Well, eventually we outpaced them, and we offered to buy them out. We decided to buy out the other three partners, and we took over the company. And then that’s when we officially changed the name to Ennkar.”
That took place at the end of 2017 into the beginning of 2018, and Ennkar’s growth has been steady ever since and has grown to its current level of over 60 employees. In addition to being licensed in California where a fair amount of their business is done, Ennkar is also licensed in Colorado, Washington, Arizona, Texas and Florida, following trend lines to become licensed in states with a lot of Home Equity Conversion Mortgage (HECM) volume.
The company also does a fair amount of proprietary reverse mortgages, offering products through partners including Reverse Mortgage Funding (RMF) and Finance of America Reverse (FAR). When asked about the amount of proprietary volume the company does, Ennabe says it is likely slightly under the 10% average gleaned for the industry in a CFPB Home Mortgage Disclosure Act (HMDA) data release.
A big business boost
According to data compiled by Reverse Market Insight (RMI), Ennkar grew its business 201.9% in 2020 to end the year as the ninth largest HECM originator, and the 11th overall without any wholesale loans. 2020 was an eventful year for many in the industry due in part to new economic stresses leading some consumers to explore new cash flow options including reverse mortgages, and for Ennkar that business growth likely came from two things: new flexibilities created by the new situation, as well as paying close attention to rates.
“We study rates quite a bit. We read a lot, both me and my partner,” Ennabe says. “And we knew the trend was coming. So, we prepared for the trend. We started hiring in April and May when we thought interest rates would fall. And sure enough, they did. We were prepared to take on the volume, and we were able to capture a lot of business.”
Seeing the trend coming and preparing for it was certainly a big part of the company’s 2020 success, but the series of events that created those trends also led to some key decisions being made that allowed for additional hiring and to prepare from the business that resulted from 2020’s turbulent economic climate. Many of those borrowers often seek out more conventional lending options, so Ennkar aims to make those kinds of people in particular aware of alternatives.
“Clients were reaching out and saying that they weren’t qualifying for a traditional mortgage, or their employment situation changed,” Ennabe says. “These borrowers, younger borrowers aged 60-to-65, weren’t planning on retiring for another eight to 10 years. They’ve now found themselves in a position where they could restructure their mortgage, but they didn’t qualify either because of their work situation, or because of the lenders’ fear of lending at the beginning of the pandemic. I think we capitalized on that a lot. We target a lot of borrowers that are applying for traditional loans, and try to show them the alternative.”
‘More than we can handle,’ recruitment efforts
Even after hiring another 10-to-12 employees, Ennkar still has some difficulty keeping up with the amount of business they have in the pipeline, Ennabe says. This is because of the capturing of new borrowers, as well as the beneficial rate climate leading people to take steps to refinance. This has led Ennkar to take additional steps to recruit new talent to handle the pipeline.
“We have more business than we can handle, to be completely honest,” Ennabe says. “That’s part of the reason why we’re looking to recruit. We have too many people applying, and not enough employees to help walk them through the process. This is a very, very complicated product for those that don’t have a lot of experience speaking about it, and we get a ton of business and leads.”
They have also benefited from an increased rate of HECM-to-HECM refinances, both loans that were originated internally in the past few years as well as certain loans originated at other lenders. That does not diminish the amount of new prospects reaching out to Ennkar, however. This is also entirely on the retail side, and the company is not really focused at expanding into the wholesale space just yet, Ennabe explains.
“I think when you do retail, you can stay in control of the narrative, and you can brand a little bit better,” he says. “So, I think at the moment, we’re focused on retail, and I think that’s where we want to stay for the time being.”
Building momentum, and taking a new outreach approach
One of the things that Ennabe believes helps to set Ennkar apart from competitors is the focus the company has on incorporating technology into loan processes, something he says the company is doing internally without other tech partners. The new software solutions are mostly internal at the moment, but Ennkar has found that it is abe to track the processes of loans in a highly efficient way.
“It really helps the LO communicate with the client, and to tell them exactly what’s missing. It’s made our relationship with our vendors incredible. They’re not getting as many emails from us, like asking for status, and we’re not sending as many emails, because we know the processors have a rotation that they go through.”
In terms of outreach, Ennkar is making a concerted effort to try and appeal to customers in ways that are not being used by some bigger players in the space, who may rely on more traditional media campaigns. The company is endeavoring to be different in the way it brands its offerings to consumers, in ways that hopefully prospective borrowers will find novel, Ennabe says.
“I just feel like we have to change the game, and the narrative,” he says. “As our volume continues to grow and we have a bigger marketing budget, our goal is going to be to push this product and almost rebrand it, to really give it a different perspective and have people that want to pay off their homes look into it as an option. That’s what I feel, a lot of times, people don’t get: they don’t know that you can pay off your home with a reverse mortgage, or that they can essentially secure the value of their house with a reverse mortgage.”