Alternative home equity company EasyKnock, which provides sale leaseback products to homeowners as a way to unlock the cash value they’ve built in their homes, announced on Tuesday that it entered into a partnership with New American Funding to share leads and offer alternative solutions for clients who may not qualify for traditional home equity products.
EasyKnock told RMD in the past that it is open to potential partnerships with reverse mortgage companies to facilitate the same goal for senior homeowners, though the product it offers does not have an age restriction — unlike reverse mortgages.
To learn more about the new partnership and what it might mean for future endeavors, RMD spoke with EasyKnock CEO Jarred Kessler.
The right partners
When asked about what EasyKnock has been doing while seeking new partnerships, Kessler describes the journey from the onset of the pandemic through today.
“We went from a period where when there was euphoria and [people believing] things have never been better, to things [becoming] the worst they’ve been in a long time,” Kessler said. “So both those factors are just distracting. In good times, people are not as open to partnerships and in bad times, they’re thinking about survival.”
That survivalist mindset may help to forge more potential partnerships, however.
“We’re in a period now where I think we’ve had a lot of traction with partners, and we think this is a moment where people are going to be a lot more open to listening,” Kessler said. “Because with more arrows in your quiver, those are the people that are going to win.”
The New American Funding partnership
When asked about how the partnership with New American Funding came about, Kessler said that EasyKnock’s outreach helped the lender to be open to it. Getting in the same room together was critical to finding a way to make such an arrangement work for both parties.
“Our teams came together through a number of meetings, and we just decided that we can help their customers, maybe service them, and then recycle those leads back if peoples’ situations change and they want to buy back their home and work with New American Funding,” Kessler said. “We’re also just a good alternative, and these days, more alternatives for customers are better than less.”
Alternative equity tapping is generally a niche financial service, so the lender’s willingness to forge such a partnership could help prove to other lenders that the arrangement could work, he said.
Beyond reverse mortgages
When asked about his previous comments on the potential for seeking out reverse mortgage partnerships, Kessler said that initial outreach to lenders was more focused on the reverse side of the business, but was later broadened to include forward mortgage companies. New American also has a reverse mortgage division, which made a partnership more enticing for EasyKnock, he said.
“I just think it was another piece of the opportunity that made it even more worthwhile,” Kessler said . “We probably would have still done a partnership if they didn’t have [that division], just to be candid. But I think it only helped.”
Partnering with forward mortgage companies was also important due to broad pressures on the mortgage industry, he said. For the companies offering reverse products, having a fallback position for borrowers who are unable to meet the loan requirements is where an EasyKnock partnership might come in handy, he said.
“As things become more challenging for customers to qualify for reverse mortgages, or the firms themselves are looking to embed sale-leaseback as a service, we can work with them to be the default partner for that,” Kessler said.
Reverse partnerships are still on the table
When asked about reverse mortgage companies EasyKnock may be considering for a partnership, Kessler declined to name names. He simply said that whether in forward or reverse, EasyKnock is looking to establish ties with the top 20 companies in each space.
When asked about some of the recent exits and consolidations in the reverse mortgage industry, Kessler describes them as a distraction. There is a potential side benefit for companies like EasyKnock, however.
“Consolidations or forced mergers […] also motivate people to realize they’re going to have to do bold and different things, which bodes well for EasyKnock, no pun intended,” he said.
Kessler also reiterated that it is not EasyKnock’s goal to compete with reverse mortgage businesses.
“We’re looking to collaborate, and we may just be a temporary solution to get these people to a position to take control of their lives and to be more lendable,” he said. “So, I would just say if you haven’t looked at what we’re doing, it’s at least worth your time. Take the time to learn more, and just go to our partnership portal and [tell us] you want to learn more.”