Previously Paused Private Reverse Mortgages Return, RMF Adds LOC Product

Reverse Mortgage Funding (RMF) and Liberty Reverse Mortgage, respectively, have each resumed offering their previously-suspended proprietary reverse mortgage products after observing increased stability in market conditions. In addition, RMF is also introducing a new variation of its private product with a line of credit feature.

This is according to representatives from both companies during a panel discussion at the National Reverse Mortgage Lenders Association (NRMLA) 2020 Summer Virtual Conference on Tuesday, with the companies later independently confirming the returns of the products directly to RMD.

Amidst return, Equity Elite introduces new variation

RMF’s proprietary product offering, Equity Elite, returned to the market as of late May, the company confirmed. Its reintroduction is now bolstered by the introduction of a new product variation with a line of credit (LOC) feature, according to the company.

The addition of a new product for the Equity Elite was made public earlier this week, the company said. Creating new variations of proprietary offerings is something that RMF aims to prioritize according to David Peskin, president of RMF.

“Expanding our proprietary reverse mortgage product offering is a priority,” Peskin told RMD in an email. “Our Equity Elite ‘Line of Credit’ program is set to rollout later this summer, and we feel like the timing is just right.”

The introduction of the new product is particularly timely as the COVID-19 pandemic is beginning to see infection levels rise in certain parts of the country, so providing additional opportunities to age in place makes sense considering what’s happening in the world right now.

“Homeowners are rethinking their long-term care plans in the existing COVID environment — aging in place is becoming an even bigger priority considering the impact that the pandemic has had on individuals in nursing homes and assisted living facilities around the country,” Peskin says. “The Equity Elite Line of Credit can provide incredible advantages to those choosing to utilize home equity to fund ‘aging in place’ needs, which can include home health care.” 

RMF: 2020 priorities, product changes

In terms of how this has shaped priorities at the company for the remainder of the year, Peskin indicates that scaling Equity Elite to serve as many borrowers as possible is something the company intends to direct resources to.

“Our focus from now until the end of the year is expanding the markets where Equity Elite and its various payment features, such as the Line of Credit option, are available – we want these products accessible on a broadscale basis to our partners,” Peskin said.

RMF also sees the new product as a key opportunity to further appeal to financial planner professionals, to better inform them of the ways that reverse mortgage products could become better incorporated into a more fully-featured retirement plan, RMF Chief Marketing Officer Jean Noble added. The recently-produced TV advertising campaign spearheaded by RMF is also expected to bring some borrowers with home values better served by the proprietary product offering, and is currently airing in the San Francisco market.

The return of Equity Elite is not without its changes, for instance the maximum claim amount (MCA) will now be $3 million as opposed to its previous level of $4 million, the company said.

Equity Elite was suspended in late March due to increased levels of volatility found in the reverse mortgage capital markets shortly after the onset of the COVID-19 pandemic, and the presidentially-declared national emergency in the United States.

EquityIQ returns with minimal changes

Liberty’s product, EquityIQ, has been reintroduced with few changes when compared with the way the product operated prior to its suspension according to Mike Kent, president of Liberty Reverse Mortgage during the NRMLA discussion.

“We’ve been back in the market for around two weeks,” Kent said during the panel. “There have been no changes, except for a little more flexibility on condo guidelines and a wider exception box. But other than that, EquityIQ is the same great product as it was before.”

EquityIQ loans no longer require a condominium complex to be FHA-approved, and the lender has expanded the amount of exceptions it is willing to take a look at, according to Kent in a phone call with RMD.

EquityIQ was suspended in late March due to the same volatility cited by RMF, and stated at the time of the suspension that it looked forward to resuming proprietary originations once conditions showed signs of stabilization. Any loans that were in-process at the time that the suspension took place were “canceled until further notice,” the company said at the time.

Effects of suspensions, product history

With less available proprietary products in the marketplace, one benchmark for proprietary product volume showed signs of change: counseling sessions for private offerings declined earlier this year according to Kathy Conley, stakeholder engagement specialist at GreenPath Financial Wellness in Farmington Hills, Mich.

“Two of the proprietary reverse mortgages temporarily suspended originations for their products due to COVID-19 in March,” Conley explained to RMD, referring to the offerings from Liberty and RMF. “In April and May, GreenPath saw a slight decrease in proprietary reverse mortgage counseling sessions for that reason, as well as a slight increase in the number of HECM sessions.”

This reversed a trend that had been observed throughout 2019 in which proprietary counseling sessions continued to rise throughout the year, according to Jackie Boies, senior director of housing and bankruptcy services at Money Management International in Sugar Land, Tex.

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