Reverse Mortgage Solutions is the latest reverse mortgage lender to step into the void created when two of the largest lenders of this product pulled out of the market. The Houston-based originator and servicer of Home Equity Conversion Mortgages is starting a wholesale production channel for these loans.
“This new channel will address the needs of third-party originators who are already active in the reverse space and those looking for an entry point,” said Ralph Rosynek, who has joined RMS as vice president, national correspondent production manager to oversee third-party originations. Rosynek is a veteran in both the reverse mortgage and TPO businesses, having run 1st Reverse Mortgage Services, which was acquired and later closed by WSFS Financial. He is also a past president of the Illinois Association of Mortgage Brokers. He has been serving as a consultant to RMS for approximately one year.
The new lending platform will be versatile so as to meet the needs of small, medium and large originators, according to Rosynek. “The small companies can focus on education and the support training they need to get a leg up into marketplace while medium players can gain additional market share, in some cases with advanced tools. And, the large entrants,” he explained, “who may have been left out of the secondary markets, can now take greater control of their profitability.”
The third-party arena is not a new one for RMS. The company is an approved Ginnie Mae HMBS issuer and for the past two years has been aggregating closed loans for securitization, noted chairman and chief executive Robert Yeary. It also operates a call center to originate HECMs as well.
Rosynek is one of the most knowledgeable people in the reverse mortgage space, Yeary said. “He knows all ends of it,” whereas many others specialize in a particular aspect such as originations or servicing.
“He's worked with brokers and he understands the nuances” of their business, Yeary continued. Yeary's background includes working with brokers for over 40 years on the forward mortgage side.
“Although the product is different, the customer is different, the broker is pretty much the same. They run, usually, a fairly small business and they manage almost everything themselves,” Yeary said.
Being an HMBS issuer allows RMS to be competitive on pricing, while originator delivery to it is smoother because it is not a big institution, he noted.
RMS does not make any overlays to the Federal Housing Administration guidelines other for when the applicant has had taxes and insurance issues. People who have been delinquent on taxes in the past, it won't take those loans because it is likely there will be losses. This policy applies across all of its channels, Yeary said.
But before getting into the origination side, RMS originally was a technology provider and servicer of reverse mortgage loans, building the company from reverse, Yeary punned.
RMS is the latest HECM originator to up its presence in the wake of Wells Fargo and Bank of America, two of the largest players in the product, pulling out.
Rosynek has hired Garret Kolb to oversee the Western markets and Jamie Longe to oversee Midwest markets. Yeary said RMS is looking for someone for the Eastern region.
When FHA changed its rules and dropped the mini-Eagle approval requirements for TPOs that opened up the market to get into the wholesale business, he said. RMS has talked with a number of forward mortgage originators that have substantial sized shops. RMS has a “pretty intense credentialing process.” It does background checks and “looks pretty deep” to make sure it is not bringing on any bad players, Yeary said.
