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. Many people in the industry had seemingly never heard of this lender before they started seeing the company’s name in endorsement data and in RMD, but the story of its incorporation is one of real love for the industry and product category, according to its co-founder and branch manager.
Omar Ennabe, who helped co-found Ennkar in its initial form in 2014 before changing the company name to a portmanteau of his and his partners’ names in 2017, came into the world of reverse mortgages through an initial focus in the world of financial planning.
Having that training helped give him a greater sense of appreciation for ways in which a reverse mortgage would be able to help someone in retirement, and he relates his own story of getting into the business through the lens of a hit film.
The ‘Slumdog Millionaire’ of reverse mortgage stories
Director Danny Boyle’s 2008 hit film Slumdog Millionaire tells the story of how an 18-year old from Mumbai found himself on a popular game show that would go on to change his life forever. The way the film is structured gives a very holistic perspective on the events that lead the main character into a unique new situation, and Ennabe feels a degree of synergy with that character’s story in terms of the way he entered the reverse mortgage business.
“Everything that led to me getting into the reverse mortgage field seems like it was almost on purpose,” Ennabe tells RMD in an interview. “I wanted to be a financial advisor and to go into financial planning, but I got lured in by the big numbers promising me I could make $200,000-300,000, no college degree needed, for mortgage companies in the subprime days in 2007.”
This didn’t last long, however, because the collapse of the housing market soon followed and caused Ennabe to refocus on the financial planning field. Still, he worked for roughly 18 months in the mortgage profession before deciding to rededicate himself to planning, which ended up giving him a very holistic perspective on the ways in which real estate could interact with someone’s investments.
“In a lot of cases, I was sitting down with people that were getting ready to retire, and had seen their portfolios collapse from $1 million down to $300,000 or $400,000,” Ennabe says. “A lot of them panic-sold thinking they needed to sell before they lost everything, so they didn’t get to see a lot of recovery. But, the one thing that protected them was their home values started to go back up in 2011 and 2012.”
As someone with a mortgage background advising someone about next steps, the reverse mortgage product began to make sense for a lot of people he would talk to who maybe did not have enough assets to give them a full-length retirement, he said.
“I had some experience with the reverse mortgage product and knew a little bit about it, but had never originated it until I went to go work with my brother, who did reverse mortgages for Advisors Mortgage Group,” he says. “That was where I started.”
Having the background in financial planning after he started working with his brother at Advisors Mortgage Group provided a gruelling schedule in the early going, because he worked both jobs for a while.
“I would go work at Fidelity Investments in the morning from, 7:00am until about 4:00pm, then drive to my brother’s office from Mission Viejo to Irvine,” he explains. “And then I would work from 5:00pm until about 9:00pm, just to do an FHA streamline.”
This led both Omar and his brother to more squarely focus on reverse mortgages after those loans began to dry up, he says.
Taking things ‘one step’ further
Omar’s experience in financial planning and mortgages paid off, and helped to further illustrate for both he and his clients why people in a certain situation should consider them more broadly.
“I had already been telling people, ‘hey, why are you doing a 15-year loan when you can do a 30-year loan and invest the difference? Well, the reverse is just one step past that.’ The reverse includes a 30-year fixed inside of the reverse mortgage, and it includes a 15-year fixed inside of the reverse mortgage,” he says. “But, it’s just one step further: a borrower has the ability to go interest-only, or to not send in a payment altogether which gives them that ultimate safety net underneath them.”
This was what Ennabe calls “the secret recipe” that he and his brother would use to successfully sell reverse mortgages: by positioning it as a forward loan, but with more options and more control available to the borrower in how they want to approach a payment or draw strategy. This was what eventually led Ennabe to become 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, recruiting he and his partner Mike Elachkar as partners. Ennabe and Elachkar eventually surpassed them, however, and bought them out.
“That’s when the name ‘Ennkar’ was born in 2017,” he says. “We became Ennkar, which is just a combination of my last name and my partner’s last name, just my last name, Ennabe and his last name, Elachkar, and we just smashed them together.”
While the journey of Ennkar has been generally successful the company did have to go through a difficult period of change when significant changes to the Home Equity Conversion Mortgage (HECM) program were handed down by the Federal Housing Administration (FHA), including a reduction to principal limit factors (PLFs) and the introduction of the collateral risk assessment. The company managed to soldier on, however.
“2018 was a reinvention of ourselves,” he says. “So it was kind of like we had to take five steps backwards, but we got really heavy on technology. We made some significant investments in our infrastructure, and bought a commercial building that we now lease to ourselves. Things just started shaping up, but it has been tumultuous. It’s been a lot of long hours, a lot of work and a lot of weekends. I can’t tell you it’s been easy, but it just makes it that much more worthwhile, that much more pleasing, and you truly get that sense of accomplishment.”
Ennabe is very thankful for the team at his company that has made so much success and transformation possible, particularly as the company looks ahead to becoming a bigger player in the reverse mortgage industry.
“I would be no one without the team behind me,” he says. “I think Ennkar in general, we believe that human capital is our most valuable asset. My team is the only reason Ennkar has had the success that it’s had. It is certainly not just me, it’s my business partners, my loan originators, my processing team, we’re a family and we’re successful together because of all their hard work.”