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In 2024, a key element for the reverse mortgage industry was a sense of newfound collaboration that many industry participants felt with forward mortgage players. Longbridge Financial largely sees that dynamic as one that is likely to continue, according to CEO Chris Mayer.
In an interview with HousingWire’s Reverse Mortgage Daily (RMD), Mayer said there is momentum on the side of the reverse mortgage industry to further bolster these partnerships in 2025. He also said he is encouraged by a greater role being played by other forward mortgage organizations in seeking out such partnerships.
Despite stubbornly low sales volume, Mayer also continues to be bullish about the prospects around reverse mortgages for purchase. This at least partially stems from well-developed forward mortgage companies diving more deeply into the reverse side of the equation.
Forward-reverse partnerships
A notable part of Mayer’s perspective for the ongoing potential with forward mortgage partnerships is the rising level of involvement on the reverse side from the Mortgage Bankers Association (MBA).
“We’ve really seen a lot of changes with Bob Broeksmit taking over in terms of the direction and how MBA is doing,” he said. “Bob was willing to take a fresh look at reverse mortgages, and MBA has been willing to do that. They’ve heard from some of their members, companies like Fairway — who are very strong in the reverse business, and who are very strong, period, in MBA.”
Some of the MBA’s larger members recognized the potential value that reverse mortgages and serving senior demographics can bring, he said, leading the trade group to understand that a larger role could be beneficial.
“One in three homes in the United States is owned by somebody 65 and older, and every year, that percentage goes up,” Mayer said. “And so, if you’re in the mortgage lending business and you’re not thinking about seniors and looking at providing financing for them, you’re going to have a problem.”
That’s not to say that it’s been an easy road to get that kind of acknowledgement from players on the forward side. But the demographics are a persuasive tool to get more companies to take a look at the evolving circumstances of homeownership, he said.
“Why do we think that serving first-time homebuyers and young buyers requires products that are unique to their circumstances, but somehow, when people go and turn age 65 and see their income fall precipitously — and see their financial or medical circumstances change — why would we think that all the products we have should be exactly the same?” Mayer said.
“It’s logical that, if you’re in the mortgage business, that you should want to serve people who own a third of the houses in the country, and it’s logical that MBA has wanted to do that. But that has required leadership, and the leadership at MBA, I think, should be complimented for taking a fresh look at the product, the industry and the program.”
Still a ‘slow build’
This has led Longbridge to add its own support to MBA, Mayer said, while recognizing that reverse mortgages will be only a part of what the association is focused on.
But its willingness to join the reverse mortgage conversation should be recognized, particularly for companies like Longbridge that work with leading forward originators in the independent mortgage banking (IMB) space.
Mayer said he is encouraged by more cooperation between MBA and the National Reverse Mortgage Lenders Association (NRMLA), but success with forward and reverse mortgage collaborations will likely continue to be a “slow build” for some time to come.
But this doesn’t mean that signs of progress are absent. Mayer cited a recent change in the leadership of Rate’s reverse mortgage division as an example of a prominent forward player demonstrating attention for reverse. That move illustrates a commitment to the space, he said.
HECM for Purchase
A very visible part of the slow build is tied to the Home Equity Conversion Mortgage (HECM) for Purchase program, he explained. Volume for the H4P program has been stubbornly low for years and is only a fraction of total HECM volume. But there is rising interest in the concept and the potential will take time to fulfill, he explained.
“We work with three of the five largest homebuilders in the country on HECM for Purchase,” Mayer said. “They’re small right now, but they’re trying to figure it out, and we’re working together.”
There are ongoing questions about how such a product can be effectively presented to borrowers, as well as lenders that are trying to raise their number of home purchases.
“Maybe this will help you sell upgrades to homes for the homebuilders,” he offered as an example. “We’re seeing the brand names in the space, but I think the idea that the brand names are going to come in and all of a sudden we’re going to double, triple or quadruple production [is] not how it works. It takes the company some time to figure it out, to find resources, to figure out what makes sense and to build.”
But that doesn’t preclude the building from taking place, he said. There remains a lot of unrealized growth potential, but it involves more than forging a solid connection between two companies.
“It’s not like you just snap your fingers, hire somebody, are inside a big company and all of a sudden you’re doing all the reverse mortgages,” he said. “There’s just a ton of work involved in that. Our message is that it’s a lot of work. We’re happy to help and work together to do that. But that process has a lot of ups and downs.”
