Reverse Mortgage Lender Reports $586,000 Quarterly Loss

The reverse mortgage business was a money loser in the most recent period for WSFS Financial Corp., which holds a majority stake in 1st Reverse Financial Services LLC. During the first quarter of 2009, 1st Reverse reported a pre-tax loss of $586,000, compared to a pre-tax loss of $832,000 for the fourth quarter of 2008. 1st Reverse, Westmont, Ill. recorded $556,000 in fee income during the first quarter, an increase of $107,000, over the fourth quarter of 2008. Expenses were $1.1 million during the first quarter, $142,000 below the fourth quarter of 2008. According to WSFS, 1st Reverse has modified its business plan to rely more heavily on retail loan originations, and also during the first quarter implemented cost reductions to improve expected breakeven origination volumes. It was approximately one year ago that WSFS, Wilmington, Del., acquired its stake in 1st Reverse.