Equity Release Options continued on page 30 So far, the product is sold in California, but Shapiro expects it to be in about 15 states in the first quarter of 2022 as it clears the state-by-state regulatory process. Once regulatory approval is met in a state, a reverse mortgage loan originator could work with clients who do not qualify for a HECM or private-label reverse mortgage, and determine if Equifi would be a sound alternative, Shapiro says. The company doesn’t work directly with consumers, instead focusing on financial planning professionals, lending institutions and pension groups that are encouraged to add EquiFi into the product mix for their customers. “We are focused on needs-based selling, and the product should be the result of selling a need and not just someone who is out pitching a product absent of understanding the need of the consumer,” he says. Financial planning professionals can offer that advice. “We think that is where it starts.” Shapiro says reverse mortgage companies are wise to think about their service in a similar way—where they act more as problem solvers than merely agents for transactional deals. “I just wonder why it has taken them so long.” “The hardest part of either selling a reverse mortgage or selling our product is developing a trusted relationship with a consumer,” Shapiro adds. “If you are a reverse mortgage producer and have the ability to offer two different products or several products to meet the homeowners’ needs and give them a choice between debt and equity, it is the best way to build a trusted relationship with a customer.” Shapiro says he sees a bright future for equity release products. “Homes are a $36 trillion asset class, and we believe the inflection point for mass consumer acceptance is through a fair and transparently constructed and priced product for both the homeowner and the investor,” Shapiro says. Products offered by other companies have a different take on equity sharing but center on the idea that a home often is someone’s biggest asset. Hometap, for example, offers access up to 30 percent of a homeowner’s equity in cash—up to $600,000—in exchange for a share of the home’s future value. “The investment has an effective period of ten years, at or before, which time the homeowner can settle through a refinance, buyout with savings or sale of their home,” says Rachel Keohan, Hometap vice president of marketing. “Our home equity investment product enables homeowners to access the equity in their home without taking out a loan, taking on debt, or having to sell their home. We give homeowners near-immediate access to cash in exchange for a percentage of their home’s future value, without monthly payments or interest.” She points out that homeowners can use the cash for anything—such as paying off credit card debt, starting a business, buying a second home or funding education. “With Hometap, the homeowner knows up front—before signing on—what percentage of the home’s future value Hometap will receive in cases of both appreciation and depreciation,” she adds. “We believe in transparency and clarity throughout the process, as well as educating our customers about what we are doing and how it works, so they can decide if it’s right for them.” Hometap is available in Arizona, California, Florida, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Virginia and Washington. Sale-Leaseback With a sale-leaseback, the basic idea is that someone would sell their home to a company that would then lease it back to the former homeowner for a given term. Essentially, someone is going from being a homeowner to a renter while staying in the house where they have been living. Other options might be available, as well. EasyKnock, for example, has additional products that allow a homeowner to convert equity into cash with the option to repurchase the home at a later date, according to the company website. The company, which operates in all states, was founded in 2016 by CEO Jarred Kessler who saw an opportunity to enable homeowners to access the value of their homes without having to move, take out personal loans or work with banks and lenders, the website says. Shared Living The idea of shared living isn’t new. Silvernest works to make the process as easy as possible, Gibson says, “especially for older adults who may have extra space and are often looking for ways to increase income in retirement.” However, finances aren’t the only reason clients use the service. Gibson points out that home sharing is REVERSE MORTGAGE / JANUARY-FEBRUARY 2022 29
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