We've heard stories that more than a few former wholesale and correspondent originators have decided to dip their toes into reverse mortgages, thanks to the utter and complete failure of much of the former mortgage lending industry. We've also heard from some reverse mortgage experts, that more than a few of these attempts fail -- the differences between origination reverses and traditional "forward" mortgages, we're told, is often just too great. Which would apparently make LoanWell Financial Corp. a rare bird, indeed. The Florida-based lender saw the writing on the wall for correspondent lending and decided to jump into reverse mortgages. And, so far, the firm has made it work, according to the Wall Street Journal:
At the start of last year, LoanWell Financial Corp. faced two big problems. The company was nearly out of cash. And it sold mortgages -- not exactly the type of business banks were enthused about lending to. "Nobody even wanted to talk to the guy who was the president of a mortgage company," says Michael Banner, LoanWell's president and chief executive officer ... LoanWell stopped marketing traditional mortgages altogether and shifted the business into reverse mortgages ... Little over a year later, LoanWell, which has about 35 full-time employees, is on the upswing ... In March, LoanWell closed 52 reverse-mortgage deals. In January 2007, its first month in the new business, the company had closed just three.
The rest of the story is worth reading, because it's the WSJ's first foray into reverse mortgage land, and because it's a bit of good news, too; who doesn't like to read about a firm overcoming adversity and reinventing itself? Here at HW, FWIW, we've noted that the mortgage landscape now has essentially four components to it: Fannie, Freddie, FHA, and reverses.