New York-based Reverse Mortgage Funding jumped on the proprietary reverse mortgage train in May, becoming the third lender to offer a non-agency, jumbo reverse mortgage with the launch of its Equity Elite product.
The Equity Elite is a full-draw, fixed rate, privately insured reverse mortgage that has a maximum loan amount of $4 million. It is unique to the market in that it caters to homeowners as young as 60, whereas the HECM and other proprietaries have a minimum age of 62.
Now, less than a year after launching, the lender announced it is cutting the cost of its offering and making it available to a larger pool of brokers.
Last week, RMF reduced origination fees and closing costs for the loan. The savings ranges from $1,400 to $10,000, according to the lender, depending on the borrower’s coupon and home value.
While the lender also offers the Equity Elite Zero – which comes with no closing costs with the exception of counseling fees and some state and local recording fees, if applicable – that product comes with slightly lower principal limit factors than the standard Equity Elite.
RMF also announced that the Equity Elite will now be available on ReverseVision’s loan origination system, RV Exchange, in addition to RMF’s own LOS, Tango.
RMF’s National Wholesale and Correspondent Sales Leader Mark O’Neil said that reducing the cost associated with taking out a proprietary reverse will help attract borrowers who are closing-cost sensitive.
And, because reverse mortgages are often criticized for being expensive, the move will help align it more closely with traditional lending products.
“Having a product that looks and feels and is priced a lot more like a traditional mortgage is very appealing,” O’Neil said, adding that refinements to the Equity Elite and other such products on the market is “a big step toward proprietary products being looked at as more of a mainstream mortgage and not as much of a niche, like the HECM.”
Earlier this month, Finance of America Reverse also reduced the cost of its proprietary product, eliminating origination fees and adding lender credits to combat cost concerns.
O’Neil said the partnership with ReverseVision will aid in the mission to become more mainstream by making it accessible to more brokers.
“It was the next logical step in our progression,” he said. “Not all of our partners are in Tango, so being in RV helps by improving our distribution opportunity…It’s been a week and we’re seeing a lot of people clamoring to get set up with the product with RV. The amount of interest has actually exceeded our expectations.”
O’Neil said that together, the advancements will help propel the product forward.
“We’re in more states than we were ever before and we’re adding new states all the time, and then we’re giving our originators a lot of choices and price points that they can show their borrowers,” he said. “We feel like we’ve got something that is really going to help our originators sell more loans and hopefully offset a lot of the down HECM business.”