Major ratings firm confirms second-highest rank to major reverse mortgage lender

DBRS Morningstar re-affirmed its MOR RVO2 residential reverse mortgage originator ranking for Longbridge Financial, a rank the lender first achieved in 2021

Global credit rating agency DBRS Morningstar has confirmed the previously-assigned “good” ranking to Mahwah, N.J.-based reverse mortgage lender Longbridge Financial, re-affirming the reverse mortgage lender’s status which was first achieved in early 2021. This is according to a release this week from DBRS Morningstar itself.

“The MOR RVO2 residential reverse mortgage originator ranking reflects Longbridge’s experienced and tenured senior management team, highly experienced underwriting team, financial profitability, and good loan performance,” the firm said in its announcement.

The rank is DBRS Morningstar’s second-highest, which indicates that based on the information made available, the products offered and the processes governing them in place at Longbridge are of “good” quality, according to the publicly-available originator ranking methodology obtained by RMD upon Longbridge’s first achievement of the rank in 2021.

A ranking of “MOR RVO1” would be the highest ranking that DBRS Morningstar could issue for a reverse mortgage lender indicating “superior” level of product management and processing, while the “MOR RVO2” ranking is above average or “good.” When first announcing the rank in 2021, it was the first such ranking that DBRS Morningstar had issued for a reverse mortgage lender. The ranking firm also describes the trend on the ranking as “stable,” echoing the original trend.

“Longbridge has been profitable since 2017 with acceptable returns,” DBRS Morningstar said. “The Company has limited credit risk as it benefits from government guarantees provided by the Federal Housing Administration and Ginnie Mae on the performance of its reverse agency-backed portfolio while selling its private reverse mortgages to a third-party investor on a flow basis.”

When reached about the ranking assignment in 2021, Longbridge CEO Chris Mayer described for RMD the review process and what it originally meant for the lender.

“The ranking process involves a deep dive on all aspects of our organization,” Mayer told RMD in 2021. “This is the second-highest Originator Ranking that Morningstar gives. A ranking of above average with no previous history straight out of the gate is an extraordinary accomplishment and will help us to work on new proprietary products and features in the months and years ahead.”

Earlier this year, investment firm Ellington Financial announced its intention to purchase a remaining ownership stake in Longbridge from Home Point Capital, in a deal that is expected to close at the conclusion of the second quarter. Longbridge also announced a series of new appointments so far this year including a new field sales leader and a new chief operating officer.

Read the announcement from DBRS Morningstar.

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