While American Advisors Group (AAG) is well known within the reverse mortgage industry as the leading lender in the space, the company has aspirations for the entirety of the reverse mortgage industry. It has developed some partnerships for the express purpose of growing the industry. One such collaboration is with Primary Residential Mortgage, Inc., and both parties identified mutual interest in expanding the slate of active reverse mortgage companies to try and lift the whole industry.
Within this partnership of mutual interest, AAG identified a broad-based mortgage company with an existing structure that it felt reverse mortgages could thrive within. In contrast, PRMI identified that reverse-specific resources that AAG had access to could further help to bolster and diversify its catalog of product offerings to become a fully-featured mortgage company, serving both the forward and reverse industries.
To better contextualize how this partnership came about and what both companies see in its present and future, RMD sat down with Tabatha Addison, VP of wholesale lending at AAG and Steven Sless, reverse mortgage division president at PRMI to learn about how this mutually beneficial arrangement has been performing for both companies.
How the partnership came about
The relationship between AAG and PRMI goes back between six and seven years, according to Addison. While attending a national PRMI conference and being astonished at the thousands of attendees who were there in their capacities as loan officers, Addison noticed that the company had an expansive LO corps as well as the fact that interest in the AAG booth present at the event was getting a lot of attention.
Addison quickly identified an educational opportunity when two other gentlemen sat down with her and expressed that they were “not fans” of the reverse mortgage product.
“You’re talking about the old reverse,” Addison told the two men after they explained some of the sources of their misgivings. “The reverse product that had the negative connotation, that didn’t have the government-insured backing, that didn’t have all the protections in place for our seniors today.”
This changed the tenor of the conversation, Addison said, and she was quickly shuffled to meet another person, only after realizing that the two men she had begun speaking with were the CEO and CFO of PRMI. This eventually led to Addison meeting AJ Swope, another PRMI executive team member, who gave her a challenge: help PRMI build out a reverse division since its existing resources were almost exclusively geared toward the forward side.
“Challenge accepted,” Addison said.
The Sless Group, and a dedicated reverse mortgage division
While initially a different HECM business development manager had the job of building out the new division at PRMI, things didn’t work out quite as planned, which necessitated a new point person. Addison met Sless during a meeting with another partner. It became clear to her that his dedication to the reverse mortgage product could make a difference in the reverse mortgage division being built out of PRMI.
Recognizing that the size of the PRMI organization might make reverse become lost in the proverbial shuffle, Sless recognized a need for the product category to have a full-throated advocate that could get through in conversations with the company’s leadership.
“[The reverse mortgage division] needed somebody that could have a seat at the executive table and feel very comfortable there, and push through initiatives that need to be pushed through,” Sless said. “And so, that’s where I think it was the perfect fit, with me coming in.”
While notable groundwork was laid by Addison and the previous HECM manager at PRMI’s burgeoning reverse division, adding Sless to the leadership team helped to add a necessary and vocal ingredient to the mix to allow for the division to be further built out.
“I really benefited from all [the preliminary work] stepping into more of a leadership position, but it was because of, initially, the vision of Tabatha, seeing PRMI, this company, with the sheer quantity of originators and [asking] ‘why aren’t they doing more reverse mortgage volume?,’” Sless said. “Tab and I knew exactly what needed to happen, and over the course of the past two-and-a-half years, we’ve implemented and executed on our plan, the AAG/Sless Group/PRMI plan that we’re now seeing come to fruition today.”
Since Sless came into the picture, he has noted that the dedication to the reverse mortgage product category has only grown. This was most recently evidenced by the designation of the Sless Group inside PRMI as the lender’s dedicated reverse mortgage center in September, and recent expansions that PRMI’s reverse division has made out to California and further into the Midwest.
The ‘rising tide,’ future competition
In providing the initial resources that helped allow PRMI’s Sless Group to run with a sustainable growth model inside its larger organization, RMD asked if AAG might have been actually helping to provide seed resources to a company that may one day serve as a more direct competitor for reverse mortgage business in the United States.
“I hope so,” Addison replied. “Competition is great. We all have the same goal, it doesn’t matter in this space. One thing I’ve learned about this space is it’s huge, and it’s tiny. We all have the same goal, and that is to help American seniors. It’s been the goal of AAG since the day they started and it continues to be the goal. And anybody that is in this space that is dedicated to this product, we’re all after the same end goal. So more competition, bring it. We love it.”
For Sless, he describes more specific goals regarding how far that rising tide could go and where PRMI hopes to be when riding it.
“If we get to the point where we’re neighbors with AAG on the volume side, we’re all doing something right,” Sless says. “That’s the goal. Top 10, for me, is a starting point. The top five is really where we want to go. We want to be up there with the AAGs of the world as far as volume.”
All of these efforts are being made to pursue the more important, shared goal of increasing market penetration and sharply increasing reverse mortgage volume industry-wide, Sless added.
“[We all want] everything that we spoke about to culminate in a hard lift in volume,” he says. “I can’t put my finger on one specific thing. It’s the partnership as a whole, it’s ours and AAG’s efforts. They have gotten us to the point where I’m very confident we’re going to be in that top 10 by the end of this year, 2021, and 2022 is really our breakout year.”