American Advisors Group is one of the nation’s largest reverse mortgage lenders, but now, the company is expanding into traditional forward mortgage lending as well.
The company made the announcement Wednesday.
According to AAG, it began piloting forward lending in 2017, setting up what it called a “test kitchen” to test demand for traditional mortgages and to establish real estate broker referral system for customers who were interested in selling or buying homes.
Now, the company is ready to roll out forward mortgages on a large scale.
To do so, AAG is expanding to a new 11,000-square-foot operations center in Folsom, California, which is in the Sacramento area. The Folsom location will house the company’s forward lending operation, where it plans to add 70 to 80 loan officers in 2018.
According to the company, for some older Americans, taking out a reverse mortgage isn’t the ideal solution to their financial needs. Filling that gap is what drove this expansion, according to AAG CEO Reza Jahangiri.
“For many retirees, income from savings and retirement accounts isn’t enough to cover expenses and they experience a significant drop in their quality of life,” Jahangiri said.
“At the same time, older Americans have amassed over $6.5 trillion in home equity. What we’ve seen is that when seniors include home equity in their retirement planning, proactively, they have better outcomes,” Jahangiri said. “And by providing a variety of options for accessing home equity AAG is better able to serve our customers, especially those entering or in retirement.”
AAG said that it finished 2017 with record revenues and loan originations, and sees this expansion as the right move for the company’s next phase.
According to the company, it “interacts” with more than 400,000 older Americans every year, many of whom respond the company’s frequent TV ads featuring the company’s spokesman, Tom Selleck.
“AAG’s new traditional mortgage option is designed for customers who are not eligible or choose not to move forward with a reverse mortgage loan, but want to use their home equity to achieve a better retirement,” said AAG Chief Sales Officer Paul Fiore. “AAG’s loan officers really understand the needs of seniors, and it’s clear that our customers appreciate having options, because options allow them to see the whole picture when planning their financial future.”