California-based reverse mortgage lender Ennkar has earned direct endorsement (DE authority) from the U.S. Department of Housing and Urban Development in March, and has been eyeing how best to expand its presence in the reverse mortgage business across the country. By earning DE authority, Ennkar is now able to underwrite and close mortgage loans without prior review of the Federal Housing Administration (FHA), but has plans for further ways it will aim to establish itself in the marketplace.
To get an idea of what the new authority means for the lender and its future operations, RMD sat down with the lender’s president Omar Ennabe. After having already done record business during the height of the COVID-19 coronavirus pandemic, Ennabe is hopeful that Ennkar will provide another option for the industry in the unusual times that likely lie ahead.
Gaining direct endorsement authority
Prior to the pandemic, Ennkar had applied for its DE authority because it was viewed as a natural progression for its business, Ennabe said. However due to a technicality, the authority was not approved during the original application period. While fully intending to rectify the error, the pandemic upended the world and focus needed to be placed elsewhere. What finally pushed Ennkar’s team to gain the authority again was the landscape of the industry, Ennabe says.
“All the people that are underwriting right now are just slammed,” Ennabe says. “They promise you 24-48 hour turnaround times in underwriting, but that’s not true. Most of the top 10 lenders are all understating their turn times. They may tell you 48 hours, but it takes three to four days before you can get a response back saying that the submission has been accepted.”
Slowdown in other areas of reverse mortgage processing has also been noticeable for Ennkar and its partners, issues which are compounded by the well-documented issues facing property appraisals and issues facing notaries, he says.
“I guess just across the board, everything is slowing down,” he said. “So, we looked inward and asked, what can we do to improve our turn times for our customers? And it [came down to asking], what if we start underwriting in-house? We bring on an underwriter to exclusively underwrite at Ennkar, and then that could lead to other revenue streams like third party originators. So that’s what we did.”
After putting a few feelers out, Ennkar located a highly-qualified candidate who had experience at another major reverse mortgage lender who helped the company get its necessary test cases finished, and who shares a goal of aiming to streamline some of the ways that the reverse mortgage industry operates.
Ennabe is quick to praise the critical staff members that helped the lender gain its DE authority, including Business Operations Manager Amy Golomb, Underwriting Manager Charmane Ng and Director of Lending Operations Amy Kramer.
“I don’t deserve much of the credit for getting Ennkar through HUD’s DE approval process,” he says, “We brought on a group of very talented and experienced individuals that deserve all the credit and did all of the heavy lifting. These individuals are the magic behind this next big phase in Ennkar’s future.”
Achieved and future goals for reverse mortgage business
Now that the goal of gaining DE authority has been achieved, the company wants to focus on the future of its reverse mortgage business. That future includes exploring business channels that were previously unavailable to the company, according to Golomb.
“Now that Ennkar is DE approved, we are eager to start bringing on wholesale accounts in the not too distant future,” she tells RMD. :Ennkar believes that our unique approach to the process will be a true game changer for brokers looking to do reverse loans. Ennkar and our proprietary tech will be the best resource for non-reverse brokers looking to get into the space. Ennkar will help ensure brokers understand the product and process in order to move their files seamlessly through the different stages.”
The ability to act independently is a big part of the appeal and of Ennkar’s future plans, Ennabe adds.
“We will no longer have to rely on the bigger reverse mortgage lenders,” Ennabe says. “It’s now 100% controlled in-house, which means a lot more management and having to hire a lot more people. That is what we’re working on now, and that’s part of the reason I want to get the word out there. Ennkar is going into the majors, maybe we got moved up into the major league. It’ll help us just control everything in-house, and we feel like we’ve got a really nice, streamlined process.”
The importance of tech to the future of reverse mortgages
Existing loan processes and the current ways that exist in accomplishing them also represents a big issue for the reverse mortgage industry in and of itself, Ennabe says. That’s why going after some of the processes using technology could be a difference-maker in the industry, Ennabe says.
“There can be so many ways of putting together a file that it’s hard to learn a million different ways of doing something,” he says. “That’s why I think tech is what we need in our industry. We need to get more tech on our side so that the files are submitted in the exact same order in the exact same way. That makes it cleaner, and that’s what Ennkar wants to do differently than the big guys. We’re going to use tech on a big scale moving forward.”
That incorporation of tech is one of the major ways Ennkar hopes to stand out when vying for business against bigger competitors, Ennabe says.
“We think that disruptions hurt a lot,” he explains. “We plan on incorporating tech even when we go out to third party originators and brokers, and try to recruit them to send business to Ennkar. That is what the DE authority gives us access to be able to do. So now, we can actually come out with our own rate sheet, we can try to get the business from brokers instead of sending them to other lenders. We think we can set ourselves apart because we can underwrite them in-house.”
According to reverse mortgage wholesale and retail endorsement data compiled by Reverse Market Insight (RMI), Ennkar was the 11th-highest ranked reverse mortgage lender in the country, logging 1,004 endorsements in the 12-month period ending in February, 2022.