Jan-Feb2020

Ellsworth, consumer direct sales channel leader for Reverse Mortgage Funding, which is based in Bloomfield, NJ. Ellsworth expects the proprietary share at his company to reach 50 percent over the next few years and for products to continue evolving. The company’s portfolio includes a reverse loan it calls Equity Elite®, which is available to borrowers as young as 60 in some states, according to the company’s website. Borrowers can take out as little as $50,000, Ellsworth says, making it something that is not just for jumbo borrowers. The company does business in 23 states, according to Ellsworth. “We want to be able to help more people and make the product more accessible to the masses,” he says. Plus, the company has seen healthy demand in its markets, Ellsworth adds. “I’m excited by where it’s at, but I’m more excited by where it’s headed. It seems like every day we’re adding an additional state or changing a guideline that allows us to help more people.” The state-by-state approach, however, can be chal- lenging, he says. “Every state has their own individual requirements.” Condo owners are another group where proprietary products could make inroads, lenders and industry observers say. Condos long have been tough sells for traditional HECMs because of FHA requirements that entire developments be agency-approved, though some requirements were loosened in late 2019. Proprietary products do not carry the same restrictions. One of the biggest condo markets in the U.S. is in New York, a state that in summer 2019 approved a proprietary product developed by Tulsa, OK-based Finance of America Reverse. The product, HomeSafe Standard, is the first proprietary product to win approval in New York since 2008 and the only one currently approved in the state. It allows borrowers to draw up to $4 million in equity. “We see Manhattan condominiums as a tremendous opportunity,” says Jonathan Scarpati, vice president of wholesale lending for Finance of America Reverse, which has been offering proprietary products since 2014. Newcomers to the reverse lending market also see opportunity in proprietary products. One is Mid America Mortgage Inc., based in Addison, TX. Although many lenders have been giving up on the market, Mid America announced it was entering it in September 2019. There may be fewer HECMs, but there also are fewer lenders, says Jeff Bode, president of Mid America Mortgage. “Right now, it just seems like a market equilibrium.” The company is most active in the Southeastern and Southwestern United States, and most of its bor- rowers are best served by traditional HECMs, Bode says. But the company also offers proprietary products and sees their potential. “I’m very encouraged to know that there are going to be a whole lot more options in the future,” says Dan Barksdale, director of HECM Lending for Mid America Mortgage. Mid America is working to make sure borrowers also know their options by also educating its brokers about the reverse lending process. The lender offers numerous niche products in the forward market and is familiar with what it takes to make brokers comfortable. “We are trying to bring a message back to the traditional mortgage market so that it can be viewed...just like any other product they may come across,” Barksdale adds. That kind of integration is the next step for the industry, says John Button, the executive from ReverseVision. “To date, the reverse industry has operated often as a separate industry, and that distinction is blurring,” he says. “It’s going away over time, and I think we’ll see even more dramatic moves in that area in 2020.” Bursting continued from page 19 “The proprietary product is competitive not in every scenario but in many scenarios. That’s all positive news for the growth of the non-agency market.” —Michael McCully , New View Advisors Jeff Bode Eric Ellsworth Jonathan Scarpati Dan Barksdale 20 REVERSE MORTGAGE / JANUARY-FEBRUARY 2020