University of California, Los Angeles (UCLA) and spent 12 years working in finance for market-leading firms in New York, Canada and Brazil. Reverse Mortgage magazine sat down with Brett Dunn to talk about TMAC’s background, the impact of recent Ginnie Mae HMBS reforms and plans for the future. Reverse Mortgage: How did you get your start in reverse mortgages? Brett Dunn: When I was a portfolio manager at PNC Bank, I managed a portfolio indexed against investments of similar parameters as Ginnie Mae HMBS securities. I had a good relationship with Bank of America, and so they brought the idea of investing in HMBS to us. I researched reverse mortgages for about six months and then got the go-ahead to start buying HMBS, which turned out to be a great product for the bank. They are government-guaranteed, have a zero percent risk weight and have very attractive returns. We ended up holding the largest portfolio of HECMs outside of Fannie Mae by the time I left in 2012 to pursue my Ph.D. at UCLA. RM: Your father is CEO of TMAC and your wife is CFO there, as well. What inspired your family to open a mortgage company? BD: It was an interesting challenge. We saw how much the product could help people, yet it had a very low market penetration so it seemed like a great opportunity to make a difference. My father and I started the company while I was in the Ph.D. program, and we leveraged my prior experience with reverse mortgages. After I graduated, I decided to join the company because I wanted to contribute to the space and make a difference. My wife, Elisa, had a background in investment banking, so she was a natural fit to join the company as CFO. It wasn’t planned this way. Everything kind of fell into place. It’s been fun running a family business, but it can be hard to put work aside. When I was in the Ph.D. program, I felt like I was always working. It was hard to separate work and regular life, and TMAC is a more extreme example of it. It penetrates everything we do. RM: How long has TMAC been in the reverse mortgage business? Are you solely focused on operating a reverse mortgage correspondent/wholesale channel, or do you have a dedicated reverse mortgage retail sales force, too? BD: TMAC started operating as a reverse mortgage lender in 2015 after we acquired the assets of Silvergate Funding, including its HMBS portfolio. Today, TMAC operates in all channels, including correspondent, wholesale, principal-agent and retail. On the retail side, we operate a dba (doing business as) called Goodlife Home Loans. We’ve been fairly strategic, especially as a small company, ensuring that all the channels are properly balanced. RM: Do you have any plans to expand into other forms of lending, or will you remain focused on reverse mortgages? How many people does TMAC employ? How many states is TMAC licensed in? BD: Our short-term business plan is to remain focused on reverse mortgages, but we’re very attuned to new opportunities as they come up. Currently, we have 40 employees. We’re licensed in 40 states, including the District of Columbia, and 35 states for direct-to-consumer. RM: Is there a science to securitizing HECMs? For example, are there thresholds—perhaps the number of HECMs funded or a dollar amount—that determine when you initiate a securitization? BD: It’s a fairly complicated optimization problem. At a high level, we try to create liquid pools that have characteristics attractive to investors. Investors generally prefer larger pools, but that requires more working capital so you have to be cognizant of how much capital is required to do that. It’s a balancing act between creating large pools and maintaining the correct liquidity levels for everyday commitments within the company. From the Top From the Top continues on page 10 REVERSE MORTGAGE / MARCH-APRIL 2024 9
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