Lenders are doing their borrowers a disservice by not keeping reverse mortgage products in the same system as other products, one expert explained. In order to increase transparency, lenders should keep all options together so that borrowers are able to see a full picture of the products that would work best for them, explained ReverseVision President Joe Langner.
“Lenders that keep reverse mortgage lending operationally siloed by maintaining separate technology workflows drastically reduce the likelihood that reverse programs will benefit borrowers as intended or allow loan officers to include a reverse mortgage scenario when it is among the best options,” Langner said.
HousingWire sat down with Langner to talk about the developing role of reverse mortgages within mortgage lending.
HousingWire: What are some of the greatest challenges in the reverse industry that could be solved by technology?
Joe Langner: One of our greatest challenges is transparency. By that, I mean making sure every borrower who could benefit from a Home Equity Conversion Mortgage or private reverse mortgage loan is presented with its merits as a matter of course when comparing other loan alternatives.
Since reverse mortgages are typically originated in a siloed system, LOs aren’t set up to quote a reverse mortgage program when serving eligible borrowers.
Our strategy at ReverseVision is not only to offer the best reverse mortgage lending platform, but also to equip lenders to tap the immense value of a vastly underutilized lending program directly through their preferred LOS and POS applications.
Additionally, we are working to integrate our solutions within the financial planning community, as many borrowers leverage their expertise when making retirement planning decisions.
HW: Why is it important that lenders can integrate reverse offerings into their systems?
JL: Integrating reverse mortgage programs with forward lending platforms is important for allowing loan originators to present senior borrowers with a comprehensive view of their options, giving senior borrowers the information needed to make an informed decisions. Especially in today’s unprecedented economic environment, it’s critical that lenders allow borrowers to explore HECM counterparts to traditional refinance, HELOC and purchase programs.
Lenders that keep reverse mortgage lending operationally siloed by maintaining separate technology workflows drastically reduce the likelihood that reverse programs will benefit borrowers as intended or allow loan officers to include a reverse mortgage scenario when it is among the best options.
HousingWire: If you had your way, what would the reverse mortgage space look like in 5 years? In 10?
JL: Here’s the current situation: over 1 million borrowers are 62 and older receive mortgages each year, yet HECM and private reverse mortgage volume accounts for a disproportionately small fraction of overall loan production. I believe this is because the majority of eligible borrowers are never presented a HECM or reverse mortgage alongside other options by their loan originator — even when these products are the most pragmatic option for borrowers. My goal is to accelerate this shift, since so many borrowers stand to benefit.
In five years, I would like to see ReverseVision integrated with all major forward lending LOS and POS applications.
Hopefully before, but certainly in 10 years, I would like to see an industry-adopted standard practice that HECMs and private reverse mortgage programs be presented to every borrower they would benefit.
Ultimately, I aim to establish HECM and private reverse products as staple programs in mainstream lending portfolios with an API-enabled platform that incorporates reverse mortgages into the initial loan valuation process and loan origination workflow.