An executive with Reverse Mortgage Solutions said he believes mortgage brokers will be the big winner from the exit of Bank of America and Wells Fargo from the reverse mortgage field.
In an interview during the Mortgage Bankers Association convention in Atlanta, Michael Kent, a senior vice president with the Spring, Texas-based company, said the third party market is big in that business. RMS recently entered the correspondent originator space that B of A and Wells vacated.
Mortgage brokers are entrepreneurial and strong marketers and they provide the best service to their clients, he said. Kent added that himself, company CEO Bob Yeary and Ralph Rosynek, vice president, national correspondent production manager, all worked in the mortgage brokerage industry, and thus know what it is like to walk in their shoes.
He added that B of A and Wells reverse correspondent channel priced loans in ways which he couldn't understand and it was a challenge to compete with them as a result.
Among the reasons given for those two companies exiting the reverse mortgage business was problems with seniors paying their taxes and insurance and putting their loans into default.
Kent says critics of the product forget that the senior was already in financial difficulty when they applied for the reverse mortgage. Many of these borrowers who are in a T&I default had owned property taxes or let their homeowners insurance lapse when they applied for a reverse mortgage in the first place.
They received the loan, but continued the same behavior, he said.
Through this loan, the senior was able to extend the time they were able to live in their house, Kent noted.
