With a rapidly aging population, rising interest rates, and forward loan officers looking for alternatives for their borrowers, 1st Reverse Mortgage USA is working to bridge the gap between forward and reverse lending.
Currently ranked 16 on the Top HECM Lenders list from Reverse Market Insight, 1st Reverse Mortgage USA is the reverse mortgage division of Cherry Creek Mortgage Company. In addition to being a division of Cherry Creek, last year 1st Reverse Mortgage USA launched 1st Mortgage Solutions USA, which offers conventional, FHA, and VA loans.
With so many forward loan officers within their company, senior vice president and reverse division manager Dan Harder said 1st Reverse Mortgage is in the perfect position to put Home Equity Conversion Mortgages into the hands of the forward LOs looking for additional loan products. As interest rates rise and refinance volume has dropped, loan officers other options and Harder said he only expects this need to grow over the next few years.
“It’s kind of a perfect storm with interest rates going up and with us having a division of 300 loan officers — a HECM is a good candidate to become part of their set of products,” he said. “Higher interest rates force them to start looking at replacing their refinance business and they need something to adjust to.”
1st Reverse has its own reverse mortgage training course to get loan officers up to speed on these different loans. He said that Cherry Creek’s education helps forward loan officers develop a new mindset for how they interact with potential customers — even for things as basic as asking a consumer for their age which is not a common practice for forward loan officers.
“How to market, how to identify your opportunities where a reverse might be a better alternative than a tradition mortgage,” he said. “We have borrowers who are of age now, but for some reason the loan officer did not market to them. Now they go into their CRMs and market to their 25 years of business for people who are 62 and older. A forward loan officer can say, ‘I’m a lot older today than I was 20 years ago. But guess who came with me? My client base, and they are all 20 years older now too.”
While there may be growing pains and learning curves in the beginning, Harder believes that forward loan officers will pick up the how-tos of reverse mortgages the same way they did other FHA and VA loans.
“It’s actually a product of business strategy,” he said. “It does take some subject matter experts, it does take some special attention to the product, but it’s not something that traditional lenders are not going to go learn. It is not so special that a forward mortgage company can’t incorporate.”
And while he thinks educating forward loans officers is the biggest opportunity, he said proper education is not something that can be taken lightly.
“The biggest challenge is making sure that new participants in the space get educated to make sure the HECM is represented correctly. With 3rd party traditional loan officers, building those relationships through education is the best way to not only build relationships but also assure we’re doing our part in maintaining this product. We certainly cannot allow new people to come into this space and jeopardize it with misinformation.”
Written by Maggie Callahan