A Rising Tide for Reverse Mortgage Lenders

When we think of reverse mortgage lenders, we are under the impression that they operate in a completely different business than traditional forward lenders do. 

Anyone who has been reading our posts know by now that a shrinking number of lenders still think of the reverse business in this way.

Today, any lender can be a reverse mortgage lender. Recently, the data shows that some of the leading forward mortgage originators in the country have taken that message to heart.

The landscape is changing, and senior homeowners stand to benefit the most. But lenders will benefit, too.

A change in the leaderboard

When Reverse Mortgage Alert published the list of leading HECM lenders for 2023, many were surprised to see certain companies listed in the Top 10 by size.

Having a leading forward mortgage lenders experiment with a new product offering is one thing, but to break into the Top 10 so quickly is something else. It has signaled a big change in the reverse mortgage landscape.

Suddenly, lenders who have dominated the reverse lending business for years saw a new source of competition. Some wondered if the infiltration posed an existential risk for dedicated reverse shops that didn’t also make the move into product diversification.

Now that Mortgage Cadence has made it possible to originate any kind of mortgage on the same tech stack with MCP, we believe it’s in the best interest of every lender to diversify their offerings.

Instead of a competitive threat, we believe the crossover signals a beneficial shift likely to elevate all reverse lending boats in a rising tide of business. The big forward lenders don’t move into new lines of business and break into the top 10 unless they see the promise in the new market.

Evidence of a more exciting reverse mortgage market

The interest from recognized industry leaders brings validity and attention to the growing yet often overlooked reverse space. As prominent brands begin to integrate reverse mortgages into their existing operations, they send a clear message of the product’s substantial market potential to other mainstream lenders.

And those big names carry media clout and consumer recognition that specialized reverse lenders struggle to match. Their public backing introduces reverse mortgages to wider audiences, building market awareness and boosting the need to make these products more widely available.

We expect to see more of this in the near future.

The interest appears reciprocal, with at least one dedicated reverse lender now considering expanding into forward offerings to diversify as conditions stabilize post-pandemic.

Lenders seem universally committed to broadening product sets regardless of their origination focus. In today’s market, that’s just smart business, but to make it work you need the right tools.

The MCP LOS from Mortgage Cadence is the most advanced loan origination platform in the industry that can originate both forward and reverse mortgages, along with many other types of loan products. Isn’t it time you saw what it could do for your business?

Contact Mortgage Cadence today to see a demo and find out how easy it could be to diversify your loan product menu and win more business.

By George Morales, National Sales Director at Mortgage Cadence 

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Mortgage Cadence: 
Alison Flaig 
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(919) 906-9738