The reverse mortgage business is still a growth industry and becoming a Ginnie Mae-approved securitizer will allow One Reverse Mortgage LLC, San Diego, to grow with it, said its top executive.
One Reverse Mortgage president and chief operating officer Gregg Smith said securitizing allows the company to look to the long term and seek other opportunities, such as entering the wholesale/correspondent space for Federal Housing Administration-insured Home Equity Conversion Mortgages.
Until now, the company had been selling its production to other lenders.
But by being able to hold loans and securitize itself, it brings more flexibility and efficiencies to its back office, Smith said.
The company no longer has to worry about adhering to various other issuers' requirements.
In addition, the company would now secure the best loan pricing for its clients, “which was the primary reason we decided to undertake the lengthy certification process.”
According to the research firm Reverse Mortgage Insight, One Reverse was the nation's fourth most active lender in this category, government fiscal year-to-date through June. However, the companies listed as No. 1, Wells Fargo, and No. 3, Bank of America, are no longer originating HECMs.
Ginnie Mae said in June, $801 million of HMBS was issued, up from $771 million issued in May.
Smith said while it was sad to see Wells and B of A leave the reverse mortgage business, for One Reverse—a subsidiary of Detroit-based Quicken Loans—it is business as usual.
It is sticking to the game plan it has had for the past three years and focus on its business model, he said.
Right now, One Reverse is focused on its consumer direct call center model for originating HECMs. But it has been looking at getting into third-party originations, both brokered business and closed loan purchases, and to be successful at that, the company needs to have Ginnie Mae HMBS issuer approval, Smith said.
There is no time frame for when One Reverse will make its first issuance, other than it will be in the short term, he said.
Everyone in the reverse mortgage business is being proactive to work with the Department of Housing and Urban Development and solve the issues impacting it. This includes working closely with the agency on a financial assessment test, Smith said.
