Mutual of Omaha distribution channel for community banks includes reverse mortgages

The new partnership has the potential to add reverse mortgage distribution to community hubs

Mutual of Omaha Mortgage, which maintains a place on the list of top 10 reverse mortgage originators in the country, announced the launch of a new initiative called “Mutual of Omaha Mortgage Services” that will aim to bring its residential mortgage products into banks and credit unions to support its distribution efforts.

This will also include reverse mortgages according to the company announcement, and company representatives who spoke about the move with RMD.

Expanding distribution

Adding these capabilities to community banks under the auspices of Mutual of Omaha is designed to allow regional banks and credit unions the ability to expand their offerings in the realms of residential mortgage lending, according to an announcement by the company.

“Mutual of Omaha Mortgage Services provides community banks and credit unions best-in-class origination services, marketing and operational support and access to a full menu of mortgage products, including FHA/VA and reverse mortgages,” the announcement said. “The new service enables lending institutions to grow their portfolio of solutions for clients, enhance fee income and reduce risk, so they can scale their business affordably and efficiently.”

The division will be led by channel directors Daniel Diaddigo and Jared Ward, according to the announcement.

“The cost and risk associated with scaling a residential lending platform can be prohibitive,” said Diaddigo in a statement. “Mutual of Omaha Mortgage Services provides lending institutions the ability to collect fee income without building burdensome infrastructure.”

“Through Mutual of Omaha Mortgage Services, we can give banks and credit unions a frictionless path to offer home loans to their customers and members,” Ward added.

Interested organizations can submit an inquiry through the Mutual of Omaha Mortgage Services website and will be contacted by a representative if choosing to pursue such a relationship.

What this could mean for reverse mortgages

Distribution has long been an issue of interest and concern for the reverse mortgage industry, particularly ever since major banking institutions left the business behind. Bank of America exited the reverse mortgage industry in early 2011 and that same year, Wells Fargo staggered its exits from the wholesale and retail channels of the business across a few months. At the time Wells Fargo had exited the retail channel, it was the largest lender in the business, logging 16,213 units in 2010. In 2012, MetLife followed suit by exiting the industry.

When asked about the potential to open up reverse mortgage distribution, Diaddigo told RMD that reverse mortgages will be a component of the offerings available in this new business priority.

“Our extensive product menu includes reverse mortgages,” he said. “Our reverse division has over 200 loan officers who meet customers face to face in 48 states. We believe that HECMs are a tool that banks and credit unions can deploy to facilitate customer retention. […] Our Mortgage Services channel provides origination services to banks and credit unions. Banks and Credit Unions will have the benefit of accessing our full menu of products including HECMs.”

In support of Diaddigo’s comments, Mutual of Omaha Director of Enterprise Integration Shelley Giordano also offered that this new channel has the potential to directly benefit the distribution goals of both the company specifically as well as the broader reverse mortgage industry.

‘Sticky’ clients

“I agree with Daniel that offering a full menu of mortgage solutions benefits retention of customers for banks,” Giordano told RMD. “And as you have stated, there is very little reverse mortgage presence at banks and credit unions, especially since the exit of BofA and Wells Fargo.  So there is a vacuum there that Mutual of Omaha Mortgage can fill.”

Giordano also mentions the brand equity of Mutual of Omaha itself as being a potential factor among possible new customers, since the name recognition has a history going back to 1909, adding that the launch of the division also could impact the loyalty of customers.

“It may just be anecdotal but we in the mortgage business have been taught that clients who have mortgages with an entity (or a partnership with the mortgage provider in this case) are ‘sticky,’” she explains. “In other words, the clients feel a sense of belonging to the bank/credit union that has helped them finance their largest asset and they tend to think hard before jumping to another ship.  Every financial services provider wants ‘sticky’ clients.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please