Chicago-based multi-channel mortgage lender Guaranteed Rate Tuesday that it is expanding its dedicated division focused on reverse mortgage business, including the Home Equity Conversion Mortgage (HECM) for Purchase (H4P) product.
“Others use a reverse purchase money mortgage to right-size and buy their dream home in retirement,” the company said in an announcement. “This new initiative gives more systems of support to loan officers as well as a new training program to certify loan officers in this type of product.”
The company makes mention of loan requirements that conform with the HECM program, a product offered under the auspices of the Federal Housing Administration (FHA) to homeowners aged 62 and older. Guaranteed Rate describes how borrowers in that age group who own at least 60% of the equity in their primary residence can avail themselves of the HECM product, so long as the home is FHA-eligible.
“While this type of loan shares many similarities with home equity loans, the requirements necessary to initiate one generally allow for more flexible terms on the part of the homeowner,” the company said.
Jim Hettinger, Guaranteed Rate’s EVP of operations, describes reverse mortgages as particularly useful for those looking for additional financial flexibility in retirement.
“This ensures an extra measure of security for those looking to make their retirement years more comfortable,” Hettinger said in a statement. “Equity build-up over time is one of the most compelling reasons to purchase a home. These loans give long-time homeowners a way to enjoy the benefits of that equity in their retirement years — all while retaining ownership and continuing to live in the house they call home.”
Guaranteed Rate’s announcement comes during a time of change for the posture of the reverse mortgage industry. Last week, multi-channel lender PrimeLending announced its own entrance into the reverse mortgage space.
The beginning of the month also saw Finance of America Companies (FOA) close the transaction to acquire the assets of industry-leading lender American Advisors Group (AAG), which included the promotion of two executives to new leadership positions within the parent company.
Last month, Guild Mortgage acquired the assets of Cherry Creek Mortgage, which itself includes a dedicated reverse mortgage division that was expanded in 2021 to include industry veterans in its leadership.
Late last year, top-five lender Reverse Mortgage Funding declared bankruptcy, effectively exiting the reverse mortgage industry. Its portfolio of reverse mortgage securities was ultimately seized by Ginnie Mae at the end of 2022.