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Despite Changes, Reverse Mortgage Newcomer Sees Promise in Program

HomeBridge Financial made a concerted push into the reverse space earlier this year, and despite industry jitters about new principal limit factors, the company still sees promise in the Home Equity Conversion Mortgage.

“I have been in the reverse industry for 14 years, and the one thing I can count on is change,” Dino Guadagnino, the company’s national reverse mortgage program manager, told RMD.

Guadagnino came to his current position through Prospect Mortgage, which was acquired by HomeBridge last fall — shortly after he had been hired on at Prospect to help boost their Home Equity Conversion Mortgage profile. Af the time of the acquisition, Guadagnino said, the Woodbridge, N.J.-based HomeBridge had been closing a handful of reverse mortgages a month.

But management at the firm saw an opportunity in the reverse space, joining a growing wave of forward lenders that have attempted to use the HECM as a way to expand their business and capitalize on existing contacts.

“The reverse eligible homeowner is a market that has been underserved with the withdrawal of the big banks from this space, which we are excited to be serving,” HomeBridge divisional senior vice president and chief of staff Todd McKenzie said.

“HomeBridge is excited about the idea of jumping both feet into the reverse mortgage space,” McKenzie said.

The idea, at HomeBridge and elsewhere, is to take advantage of their existing relationships and referral partnerships to amplify the reverse message. Some in the industry have called it “generational lending” — the idea that a single loan company can provide mortgages for the duration of a customer’s homebuying life, from the first purchase to the trade-up to a reverse mortgage for funding retirement.

Mortgage companies of all sizes and types have seized on this idea, with Starkey Mortgage in Texas (now known as Certainty Home Loans) launching a reverse division earlier this year; Reverse Mortgage Funding developing software designed to attract forward brokers; and C2 Financial, California’s largest mortgage broker, partnering with HECM lenders to educate its originators on the products.

At HomeBridge, the plan has involved hiring nearly 30 reverse-specific loan officers, while also using the company’s existing team of nearly 1,000 forward loan officers to drum up referral business. So far, HomeBridge has cracked the top 50 retail HECM lenders according to the most recent data from Reverse Market Insight, logging 127 endorsements during the 12 months ended August. That’s good for 57th place overall.

Though the company entered the market just before large-scale changes to principal limit factors and mortgage insurance premiums, HomeBridge still sees the opportunity in HECMs — particularly considering the Department of Housing and Urban Development’s other October surprise regarding the HECM for Purchase product. Now that potential H4P borrowers no longer need to wait for the certificate of occupancy for new construction, Guadagnino said, the loan officer’s task isn’t quite as difficult.

“This has opened up opportunities, and is allowing our reverse specialists to have a conversation with builders that before was a lot more difficult,” he said. “The purchase opportunity just got a little easier.”

Written by Alex Spanko