When entrepreneur Jason van den Brand found himself needing to navigate the complexities of end-of-life care for his father and grandmother, he learned firsthand how difficult it is to find specialized care — and finance it.
This is the inspiration behind van den Brand’s new company, Wellahead. The new venture helps consumers navigate solutions to complex and, often, emotionally fraught financial situations. The platform independently vets and verifies the companies and products it features on its marketplace to build consumer trust.
It’s not the first time van den Brand has created an online consumer marketplace. He founded online mortgage platform Lenda, which he sold in 2019 to real estate fintech company Reali.
To learn more about Wellahead and its incorporation of reverse mortgage products, RMD sat down with van den Brand.
Learning about the complexities of later-life care
For his part, van den Brand describes himself as something of a “financial black sheep” in his family, who are all active in different industries. Because of that, he was tasked with finding the right solutions for his father and grandmother, and learned quickly how challenging it would be.
“I learned firsthand the complexities of not only figuring out the best way to get care, but also how to pay for it,” he said.
For his father, van den Brand sought information for estate planning, insurance and pension, while it was determined that the right path for his grandmother would be a reverse mortgage.
Unfortunately, that process was far more complicated than expected, he said.
“Her situation was unique, so the family decided to get her a reverse mortgage,” he explained. “But in going through that process, we found it very difficult to compare and contrast different reverse mortgage lenders [between] each other, not to mention different products outside of the reverse mortgage and what other options were available to her so that she could pay for her care and medicine as she aged.”
Realizing he wasn’t alone in trying to navigate all of these realities led van den Brand to launch Wellahead. Millions of Americans need this support each year, and there’s also increasing urgency because the senior population doesn’t have enough liquidity.
“Across the country, older Americans especially are facing rapidly rising care costs,” he explained. “And their largest assets are illiquid, meaning it’s not easy to pay for care using home equity. Typically, once you go on a fixed income, the traditional banks are not going to lend you money. You don’t have enough income to qualify for the ratios, and so we went and studied the market.”
That market research illustrated that an overwhelming majority of senior households are struggling or are at risk of falling into economic insecurity. And many of those people will also require some kind of long-term care.
Home equity complexities, how it vets businesses
If a senior is looking to tap into an illiquid asset like home equity, these problems can be exacerbated by the stigma that tends to surround home equity lending and, specifically, reverse mortgages, van den Brand said.
“[These product types] are hard to understand, and even selling a property — which is a home equity solution, if we think about it in that regard — is costly. These products are slow, and none of them are really purpose-built for older Americans,” he explained. “So this is obviously a market.”
The ideal solution preserves wealth, reduces taxes and improves the quality of life for an older American, he said. This is achievable with “proactive and informed real estate planning,” and the marketplace will aim to help these Americans and their families compare “vetted liquidity solutions.”
Van den Brand said the vetting process for reverse lenders contains 16 pieces of criteria, including pricing, annual percentage rates (APRs), speed to transact, the ease of the digital experience and other tactical factors of customer service.
“We’ll secret shop them, call in and see what the experience looks like,” van den Brand explained.
It also includes elements like how long a company has been in business and an aggregation of online ratings, including those from the Better Business Bureau, if applicable. There are also more specific criteria for specialty products like sale-leasebacks and shared- investments.
Reverse mortgage viability, business model
Wellahead features six of the industry’s leading reverse lenders for users to compare on its platform. Having this ability is key to the differentiation of the marketplace, as well as avoiding potential instances of interacting with a bad actor, he said.
Although the platform charges partners, the service is free for consumers — and will likely stay that way for a long time, van den Brand said.
“I think it’s really important that this value exists in the marketplace, and I think I would have been very reluctant to pay for this given how difficult it was emotionally and physically [for my own situation],” he said.
The partner fees that Wellahead collects include licensing and subscription fees within Real Estate Settlement and Procedures Act (RESPA) guidelines, with a “small fee” from the financial marketplace going to the company.
As the company looks ahead, the goal is to forge additional reverse mortgage partnerships.
“If there’s a new reverse mortgage lender that’s starting up, we want to talk,” van den Brand explained. “We’re going to run them through our ecosystem, rubric and vetting process, and if they have something superior to the rest of the marketplace, then we’re going to add them. If it’s a bunch of the same-old, same-old and there’s no material difference in price or speed to close, we [may just move along].”
While certain providers of proprietary reverse mortgages are on the platform, the products themselves are not listed yet, though that could change in the future.