Did you see mixed martial artist Anderson Silva’s left foot cave into Belfort’s chin Saturday night? The strike seemed oddly similar to the blow BofA threw at the reverse mortgage world by announcing its departure. It wasn’t too long ago Seattle Mortgage’s acquisition by the largest bank in America garnered tremendous attention while validating our industry. It was a double-decker jack that gave every company in the arena a reason to celebrate and pine to be the next Seattle.
Whispers had the purchase price near $200 million, legitimizing the true arrival of the HECM line, while stamping the quality of our product as Grade A. Now I feel like Belfort, lying still on the Octagon canvas, wondering what just happened. How could BofA forfeit a game they practically owned? Or throw in the towel from the corner, even though the judges had them up on all scorecards?
Something stinks. This thing has the nagging scent of a four-day-old bologna sandwich found between the seats of a truck in Charlotte, North Carolina. I am having a terrible time gulping down what just happened … it doesn’t add up.
Here is what I do know: I don’t throw away things that aren’t broken. I don’t sacrifice a whole division of a company that is profitable, or shed a revenue maker and portfolio builder for my financial services department for the sake of redeploying manpower. I’m no conspiracy theorist, but this move has me scratching my head and wondering out loud about the underlying motives. We have all read about the Countrywide issues, the foreclosure problems and continued scrutiny of the Merrill Lynch purchase. But to bullet-hole the Reverse Mortgage Division to start up a Legacy Asset Servicing department out of the blue? Come on. From the people I know there, this came as a surprise and secrets in this industry at this level are rarely executed with precision.
My gut feeling is telling me that this has a lot more to do with the future of this product than anybody is caring to discuss. I know many lenders were elated by this news, smiling widely at the fortuitous opportunity to get at the BofA orphaned loans. But I don’t see it that way. This closure has to be autopsied. We can’t be too quick in writing it off as a casualty of the foreclosure mess while not pinpointing the real cause of death. Did anybody else find interesting Paul Ryan’s response to the State of the Union address? Or the front-page news that Republicans propose to slash $74 billion in funding to a whole slew of government programs? The devil is in the details.