The reverse mortgage industry has taken a bit of a beating in the past year following significant program changes from the U.S. Department of Housing and Urban Development.
But lenders in the reverse space are no strangers to change. They are nothing if not resilient.
Many will tell you they’ve weathered uncertain times before and they’ve come out the other side better for it. Most will say this time around will be no different.
All of them will assert that home equity conversion is important, and they’ll wait it out until the tide turns, because more people will turn to tools like this one to access their greatest source of wealth.
In our reporting, HousingWire has connected with dozens of lenders this year to talk about their business. We’ve compiled a list of the top 10 HECM lenders and a summary of the approach each has taken to stay afloat in the current climate.
American Advisors Group: Rebrand
No. 1 in the HECM space with nearly 26% of the market share, AAG is the industry’s biggest player. But even this goliath couldn’t avoid the impact of the 10/2 changes. The rule change prompted the lender to put the gas on the rebrand it had been considering, announcing over the summer that it would now be offering traditional loan products and real estate services in addition to reverse mortgages.
Calling itself a holistic provider of home equity solutions, AAG says its goal is to help seniors “retire better.”
“It was apparent that the HECM business model was not moving the needle on helping millions of seniors consider using home equity more strategically,” AAG CEO Reza Jahangiri told HousingWire. “We decided it was time to come at it a different way, to open more doors.”
Finance of America Reverse: Innovate
No. 2 on the list with about 10% of market share, FAR is staking its claim in the proprietary reverse mortgage realm. With Blackstone capital to back it up, the lender has been leading the charge of the development of non-agency, jumbo reverse mortgages, releasing two iterations this year of its HomeSafe product, including the first-ever second lien reverse mortgage.
“Our goal at FAR is to put people in the driver’s seat and help them get to work on retirement,” said FAR President Kristen Sieffert. “One of the key ways we’re delivering on this commitment is by continuing to expand our product options.”
Reverse Mortgage Funding: Reach out
RMF might be the youngest lender on this list, but it’s no longer the new kid on the block, according to Mark O’Neil, national sales leader of its wholesale and correspondent channel.
To retain its foothold in the space, RMF is investing in its third-party origination business, funneling resources into offering top-notch training, technology, product support and marketing to its TPO partners.
“We’re spending a good deal of time, effort and energy in recruiting and training to make the reverse mortgage accessible to the traditional originators,” O’Neil said. “With the refi boom slowing down and people in the forward market looking for business, we’re focusing our resources on growing that business.”
Liberty Home Equity Solutions: Focus
A subsidiary of Ocwen Financial, Liberty is tuning out the noise and concentrating on fulfilling its company promise to “change lives.”
“We continue to do what we have always done – stay focused on the needs of our customers and partners. That is why we are an industry leader,” President Michael Kent said in a Q&A with HousingWire.
“Liberty will continue to focus on delivering market-leading service and pricing that will help our partners remain competitive and grow their business,” Kent added. “We will also focus on our own internal efficiencies and productivity.”
One Reverse Mortgage: Diversify
Coming in at No. 5 on the HECM lender list, this Quicken Loans subsidiary has just over 5% of the market share. To stay competitive, it launched its own private reverse mortgage product this year, the Home Equity Loan Optimizer, or HELO.
One Reverse CEO Gregg Smith said the lender felt consumers needed more options, and that diversifying its product offerings made sense.
“We know the opportunity is there, we know the audience is there, but we haven’t had the options, the programs, the solutions that they need or that they want,” Smith said. “I think proprietary has a big role to play in this market…I would say innovation is the wave of the future for this space.”
Synergy One Lending: Merge
This summer, Synergy One – which operates under the name Retirement Funding Solutions – made news when it announced its acquisition by Mutual of Omaha Bank. The move was a welcome development for the reverse space, which hasn’t had a major player in the game since MetLife and Wells Fargo called it quits in 2012.
“Our origination force now has a clear and comparative advantage in their markets as their clients have a degree of trust around the brand,” said Synergy One President and CEO Torrey Larsen. “Mutual of Omaha Bank sees an opportunity to extend its brand, extend its capital resources and grow both the overall market as well as our company’s market share.”
Live Well Financial: Upgrade
Live Well Financial is betting big on tech to ride out the tough time. Last month, the lender told HousingWire it’s bankrolling a major upgrade to its lending platform – a move intended to give it a competitive edge.
“Our major focus is on technology and mortgage automation,” said Executive Vice President Bruce Barnes. “We are making these moves to retain market share. The new generation of folks coming of age for a reverse mortgage are more adept at using technology, so we’re really looking ahead at the future and what it holds for us as a company.”
“It’s all about leads,” said HighTechLending President Don Currie. No. 8 on the top HECM lender list, HTL has focused its efforts this year on internal lead generation rather than shelling out precious dollars on purchasing leads that might be sub-par.
“We took it upon ourselves to take control of our own destiny and to grow a lead division within the walls of HighTechLending, so we can produce our own high-intent exclusive reverse mortgage leads,” Currie said.
“Having control of your own destiny is absolutely essential right now,” he added. “You simply can’t place the survival of your company at the altar of another.”
Fairway Independent Mortgage: Groom
In today’s climate, closing a reverse mortgage every now and then isn’t going to cut it, and that’s something Fairway Independent Mortgage has taken to heart. This year, Fairway is putting into motion a plan to groom its top HECM producers to excel beyond the industry average.
National Reverse Mortgage Director Harlan Accola said the lender will be working closely with five to 10 of their best and brightest in a push to help them close four to five loans every month.
“We know that if we can break that barrier with our top people, pretty soon a whole lot of people will be breaking it,” Accola said. “We really believe that that will be the tipping point.”
Open Mortgage: Invest
Finally, coming in at No. 10, Open Mortgage believes there is opportunity out there for those who are bold enough to go after it. The Texas-based lender is investing in tech and marketing support for its reverse channel.
CEO and Founder Scott Gordon said Open is all in on reverse despite the down market.
“Open Mortgage is developing technology to enhance our marketing and operations, so our market share will keep growing in good times or bad,” he said. “We think chaos in the marketplace makes it a great time to invest.”