Finance of America Companies (FOA), parent company of industry-leading reverse mortgage lender Finance of America Reverse (FAR), announced on Monday the expanded roll out of “HomeSafe Second,” its proprietary second-lien reverse mortgage product re-introduced to the market earlier this year.
Rolling the product out to an expanded pool of direct retail loan officers and wholesale brokers, the company aims to make the product more widely available to consumers, according to an announcement.
The announcement also detailed that the retail expansion will go to “Finance of America’s direct-to-consumer division, [American Advisors Group (AAG)].” On the wholesale side, the loan will be offered to broker partners through the ReverseVision loan origination system (LOS).
The expanded launch is designed “so that more homeowners 55 and older have a tool to access their home equity without adding new monthly payments or changing the existing rate on their first mortgage,” the company said. “With the wider rollout across its direct-to-consumer and wholesale divisions, Finance of America will increase the availability of this second-lien reverse mortgage product to homeowners and originators.”
Based on a recent survey commissioned by FAR, home equity products are growing in popularity but economic circumstances may limit the ability for a homeowner to tap into that equity using more traditional products, including a Home Equity Line of Credit (HELOC). By expanding HomeSafe Second availability, the company aims to offer a more enticing prospect to Americans at or over the age of 55.
“What we are most excited about is the ability to bring this modern financing solution to so many more older homeowners who otherwise may be denied access to their housing wealth by conventional lenders,” said Kristen Sieffert, president of FOA in an email to RMD. “HomeSafe Second outshines every other home equity product on the market for 55-plus homeowners, and even the costs are in line with the traditional HELOC options.”
Sieffert added that this positioning will have positive ramifications for the larger company, which has primarily positioned itself as a retirement solutions provider since the acquisition of AAG earlier this year and the dissolution of its forward mortgage arm.
“We believe this product will open up more opportunities for Finance of America and our partners by attracting new and different customers, and it further demonstrates our commitment to driving innovation across the home equity and retirement space,” she said.
Wider availability through the FOA retail channel, which is assuming the AAG branding after the acquisition that closed earlier this year, will be available beginning in November. FAR cites the reach of the AAG brand and its well-developed marketing apparatus as a key component of this part of the move.
“[AAG has an] advertising reach of more than 20 million consumers annually,” the company said. “The increased availability means more homeowners will have access to tools that may help them accomplish key goals, such as renovating their home. Given that older cohorts hold more than $12 trillion in home equity, extending the product through AAG is a strategic step to unlocking more of this market.”
Wholesale partners will have access to HomeSafe Second via the ReverseVision LOS, saying that availability through the industry point-of-sale system will “enhance third-party originator’s ability to compare a second lien reverse mortgage to other products and to walk through scenarios with their customers.”
With this expanded roll-out, HomeSafe Second is available in California, Colorado, Connecticut, Florida, South Carolina and Texas, with the company expressing its goal to expand to more states in the future.
HomeSafe Second was first introduced in 2018, marking the industry’s first-ever second-lien reverse mortgage option. However, the product was suspended in 2020 due to economic volatility caused by the COVID-19 pandemic, before making a return with a minimum age reduction to 55 this past February.