Since its launch less than one month ago, the newly formed reverse mortgage company, National Senior Home Equity, is making strides. The company is recruiting throughout the industry and has signed 18 loan lenders originating reverse mortgages—and counting.
“We originally forecasted 10 in the first month, and in the first two weeks we’re near 20,” Bart Johnson, National Senior Home Equity president, told RMD in an interview. “It’s a lot quicker and bigger than we had expected. We have almost immediate traction.”
Earlier this week, the Federal Reserve’s compensation rule went into effect and could continue to drive brokers to NSHE as they look for new ways to compete in the marketplace. “I believe the perfect storm has occurred and has made our opportunity even more timely as brokers and small correspondents are being ‘squeezed’ by the new regulatory environment,” said Johnson.
With the latest HECM data down slightly, Johnson estimates, the loan volume of the signed originators totals around 150 reverse mortgages per month. One caveat is that the loans won’t show immediately on the new company’s books, because it is still in the process of obtaining independent licensing. In the meantime, the loans will be closed in the names of the current originators. But it doesn’t mean the new company can’t make projections.
“We think for two reasons our numbers will get stronger. The market has been underperforming. As we get into recovery, we expect those numbers to naturally pick up.” Additionally, he said, “We expect to keep adding companies.”
How far will the company grow?
“I’m inclined to grow intelligently and profitably to get to 1,000 loans per month,” Johnson said.
While the company is structured as a broker roll-up, intending to fund loans of originators and offer those originators a pice of the company, Johnson says he and his team have received unexpected interest from correspondent lenders as well. While National Senior Home Equity is not currently poised to take on those correspondents, Johnson says it could be a future possibility. Additionally, interest from individual brokers has been received, but the company is designed for small broker shops rather than individuals. “We’ve told them…’If you see an opportunity to get four to five loan originators together, we’d love to consider it,'” said Johnson.
With a $5 million capital investment and a team that includes industry veteran Tony Garcia as company CEO and Johnson’s own roots as a former Financial Freedom president, the company is showing no signs of slowing.
“We are going to continue to recruit until we have a lot more companies,” said Johnson. “We are starting at 150 [loans per month], which we thought might be several months down the pike. We were hoping to get to 100 per month after a few months, but we’re happy to be starting at 150 and growing from there.”
Written by Elizabeth Ecker
