Cherry Creek Reverse Mortgage Eyes Growth, Looks Ahead to 2022

Early last month, nationwide mortgage lender, Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) issuer and HECM servicer Cherry Creek Mortgage announced the hiring of reverse mortgage industry veterans Bruce Barnes and Jim Cory to lead and expand the company’s reverse mortgage division.

Both men have been appointed to their positions as managing directors of the company’s reverse mortgage division, sharing responsibility for overseeing Cherry Creek’s new development and expansion across retail, wholesale and closed loan production.

This came at an eventful time for the reverse mortgage industry at large. Not long after the company announced the appointments, the Federal Housing Administration (FHA) revealed in its Annual Report to Congress that the reverse mortgage book of business inside the Mutual Mortgage Insurance (MMI) Fund had reached positive territory for the first time since 2015. By the end of the month, FHA had announced a new HECM lending limit of $970,800 for 2022.

To get a better idea of how the new leadership is settling into the company’s ramping up of reverse mortgage operations, RMD sat down with Barnes to discuss the progress made thus far and the plans on deck for 2022.

Expanding on what’s there

Cherry Creek is a well-known entity inside the reverse mortgage business with a dedicated HECM division going back several years. Because of that, the decision of company leadership to ramp up its efforts in reverse through the new hires gave Barnes and Cory a great place to start in terms of determining what next steps to take, Barnes explains.

Reverse Mortgage co-manager Bruce Barnes of Cherry Creek Mortgage.
Bruce Barnes

“Fortunately for us, we have a pretty robust operation already functioning,” Barnes tells RMD in an interview. “And we’re adding to that every day to set up the workflows and staffing necessary for the company to grow our reverse mortgage business.”

Further developing Cherry Creek’s reverse mortgage business presents a significant opportunity, Barnes says, because it is very well-established in reverse while also maintaining a robust presence on the traditional mortgage side.

“Cherry Creek’s reverse mortgage division, but also the company as a whole, is a bit of a ‘unicorn opportunity,’” he says. “We have all of the state approvals, we have our Ginnie Mae ticket to be able to securitize, we have a robust operation already in production that’s happening today.”

On top of that, the leadership at the company made an impression on Barnes, he explains, and will help the reverse mortgage team leverage that pre-existing forward footprint to add reverse to the repertoire of more Cherry Creek employees.

“Being able to come into a company that, quite honestly is the best company that I’ve ever come across from a leadership perspective – that has all of the necessary tools to be able to grow a business, and really being able to leverage the forward mortgage channel with its nearly 600 salespeople on the forward side that’s growing every day – is really just a bonus for being able to help grow the reverse mortgage division as part of that,” he says.

1st Reverse no longer, eyes on growing the industry

In recent years, Cherry Creek’s dedicated reverse mortgage division has been operating under the name 1st Reverse Mortgage USA. The days of using that branding to guide the organization’s reverse mortgage efforts are quickly coming to an end, Barnes says.

“1st Reverse was a DBA of Cherry Creek,” Barnes explains. “The company purchased the assets of 1st Reverse [many years ago]. But, we are going to do business under Cherry Creek Mortgage and be one operation.”

The mentality guiding this move is more integration with the existing forward operations and personnel and an effort to simply unite under an overarching brand, he said.

“We plan to be another product in the arsenal for the larger Cherry Creek Mortgage operation, and are looking forward to it,” Barnes said. “That complete brand change is in the works and will be completed by, probably, early 2022.”

Integrating into Cherry Creek helps bolster the number of available resources to the team. Those resources will correspond with strategic expansions in education and the outreach to new borrowers.

“The benefit that we have of integrating into Cherry Creek Mortgage is that the amount of resources that are available to us is quite extensive,” Barnes explains. “Our training education program is going to get rebuilt and [become] more robust than it is today. [We will] be able to create an opportunity to grow the reverse mortgage market.”

Old and new reverse mortgage business

When asked about growth related to the reverse mortgage industry’s current accelerated level of HECM-to-HECM refinances as indicated in FHA’s actuarial report, Barnes pointed out that refinances will be a component of volume when it’s determined such a transaction would benefit a borrower. Growth efforts, however, focus on ways in which forward personnel at the company can be brought up-to-speed on reverse.

“I know a lot of folks are doing HECM-to-HECM refinances right now, which is important and we will be too, but we also really want to grow the reverse mortgage market,” Barnes says. “That means being able to combine forward originators into the reverse mortgage product and help grow the market that way.”

Growth will be the name of the game, Barnes says. That means that refinances will be in the organization’s repertoire, but looking at other components of reverse mortgage business will be vital to pushing the overall numbers in a positive direction, he says.

“Our focus is really going to be to expand the reverse mortgage market,” Barnes explains. “HECM-to-HECMs will always be a percentage of our business, but we certainly are looking to expand in more directions. [We’re looking at] HECM for Purchase, the new HECM business, and expanding into more proprietary reverse mortgage opportunities by possibly partnering with several of the institutions that are doing those out there today.”

Barnes declined to name the proprietary product options the company will be offering, only saying that such partnerships were forthcoming.

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