Live Well Financial shutters origination operations

Live Well Financial has ceased originating loans, the company announced on its website Friday. The homepage message said only that it would not be originating new loans as of May 3, 2019, “due to unexpected circumstances,” a surprise move that took some wholesale partners by surprise.

Live Well Financial originated traditional and reverse mortgage loans as well as FHA and VA loans. It also operates a servicing arm. No word yet on whether the company will continue to service loans or if it will sell off that business and close completely.

Virginia-based Live Well is a long-time player in the reverse mortgage space, most recently coming in at No. 7 with 305 loans year to date and 3.1% market share.

It is also an issuer of reverse mortgage securities, coming in No. 7 in the first quarter of 2019 with 22 pools of HECM-backed securities with an original aggregate amount of $85.6 million. But late last year, the company sold off a sizable portion of its portfolio to Reverse Mortgage Funding in what was perhaps a sign of things to come.

F2But the reverse mortgage industry has seen volume plummet in the last year thanks for new regulations, which no doubt had an impact on Live Well’s bottom line.

In September, Executive Vice President Bruce Barnes told HousingWire that the lender was on the brink of releasing a major upgrade to its lending platform, promising an elevated experience for both its customers and originators.

Barnes said the new focus on technology and mortgage automation was a bid to retain market share as business in both forward and reverse mortgages was down. But the technology never officially launched, and it appears the lender may have buckled under the pressure.

The forward and reverse mortgage lender and servicer also filed a notice with the Virginia Employment Commission informing the state of its closing and subsequent layoff of 103 employees in Richmond, Virginia.

According to a letter penned by the company to the state that was obtained by HousingWire, Live Well will terminate most, if not all, of its employees working in its Virginia office, including CEO Michael Hild.

The letter breaks down the eliminated employees by position, with mortgage loan originator and underwriter making up the largest number of layoffs at 10 apiece.

In the letter, Paula Foster, Live Well’s vice president, controller and human resource director, said conditions outside the lender’s control led to the decision to permanently shut down all of its operations in their entirety. Prior to this revelation, it was only clear that the company would halt originations and cease funding new loans. Now, it appears its servicing business and mortgage securities issuance will shut down as well.

“Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral for certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company,” Foster said.

“This reduction in credit availability combined with challenging conditions in the markets for mortgage loans, which were conditions outside of the company’s control, along with related regulatory issues, have resulted in the company having insufficient available cash to continue operations,” Foster continued.

“Despite the company’s exercise of commercially reasonable business judgment, it could not reasonably foresee these circumstances and therefore was unable to provide 60 or more days notice of the closing and related layoffs,” he added.

While the letter said that employees working outside of Live Well’s Virginia headquarters would be also affected, it did not provide specifics on layoffs in other states. Live Well has offices in San Diego and Lansing, Michigan.