March-April 2021

proprietary reverse mortgage made sense for fewer borrow- ers,” McCully says. Another factor was the liquidity crisis last spring in capital markets when bond trading sputtered, creating instability for lenders. Some had been hoping to launch new products last year, but the turmoil forced temporary delays in their plans. Plaza Home Mortgage Inc. was among them. The San Diego-based company first entered the proprietary market in 2019 with a fixed-rate product, says Mark Reeve, Plaza Home’s vice president of reverse mortgages. An adjustable-rate product was supposed to follow in 2020, but it was shelved until the first quarter of 2021. The capital markets situation was partly to blame, he says. But frontline lenders also were busy with refinancings. “We felt it would be best to take care of what we had,” Reeve says. Reeve is optimistic about proprietary products based on the growing appeal of reverse mortgages in general. Proprietary products offer attractive features, including lower upfront costs. Plaza also is looking into a proprietary purchase product. “The market is going to continue to get stronger and stronger,” he says, noting the rise in home prices as one driver. “With the way home prices are going through the roof, a jumbo reverse is almost becoming a necessity for a lot of markets.” A delayed product launch also touched Reverse Mortgage Funding. The company had been planning to introduce a line of credit feature for its Equity Elite product, says Joe DeMarkey, strategic business devel- opment leader for the company, which is based in Bloomfield, NJ. But the launch was postponed until later in the year, DeMarkey says. Despite the hold up, the product has performed well, he adds. And the company continues to look for ways to boost the appeal of its Equity Elite prod- ucts, which it continued to offer throughout the year. “That does not just mean the jumbo segment of the market,” DeMarkey says. “That means serving potential customers who don’t have access to a HECM for a variety of reasons or the HECM that they do have access to is not very appealing to them.” He sees one potential market in people who can’t qualify for a HECM because their properties do not meet FHA guidelines, such as the owners of non-FHA eligible condominiums. “I think there’s definitely an opportunity for a product that is designed to allow for non-FHA eligible property types,” DeMarkey says. “That gap needs to be filled.” Prospering with Proprietary continued from page 29 30 REVERSE MORTGAGE / MARCH-APR I L 2021