Big banks no longer have a stronghold on the reverse mortgage market, and those that have made big gains in the retail space are trending largely toward the call center model of loan origination.
The latest Department of Housing and Urban Development monthly data indicates American Advisors Group has grown its volume to the highest level of any lender in August. Based on August endorsement data released by HUD, AAG closed 547 Home Equity Conversion Mortgages (HECMs) during the month, placing it in the top spot for retail reverse mortgages. One Reverse, also utilizing a phone-based retail sales force, closed nearly 500 loans during the same time period.
“Times are changing with who is really stepping out in the industry,” says Richard Mandell, CEO of One Reverse Mortgage. “What we’ve proven and what possibly other lenders are finding is the model we have really does a nice job of catering to seniors that makes it very easy for them to do business. That is not to say there isn’t a place for kitchen table conversations, because there are people who prefer to do business that way. But many [customers] are more comfortable doing business over the phone.”
While One Reverse has exhibited slower growth than AAG, both have seen gains in 2012 with the latter company more than doubling its year-over-year volume through the through the addition of new staff and sales through its Orange, Calif.-based production center.
“The AAG brand and retail origination channel have realized tremendous scale and momentum this year,” AAG CEO Reza Jahangiri said. “We are very happy with our progress as we work to become the top retail lender in the country. Our growth is a direct result of the hard work and dedication of our spectacular team, and we look forward to surpassing our remaining goals for 2012.”
AAG anticipates producing 400 loans per month going forward through its retail channel. The company also operates a wholesale channel, launched in 2012.
There is still room to grow, however, the lenders say.
“The true producers are going to separate themselves,” Mandell says. “I think you will see them separate and take on more market share. With big banks out of the business, lenders are realizing they have to focus on this core business, and that this is a highly specialized product.”
Written by Elizabeth Ecker