Financial Freedom Business Fuels $100M Decline in CIT Group Income

Financial Freedom’s legacy reverse mortgage business is continuing to cause a drag on profits for CIT Group, the company that acquired OneWest Bank last year. CIT Group attributed a loss of nearly $100 million in year-over-year quarterly profits relating to Financial Freedom’s discontinued operations, company executives said in a reporting on second quarter earnings this week.
The Livingston, N.J.-based company took a dive in profits, reporting $14.1 million in net income, down from $115.3 million during the second quarter of 2015.
“Despite the impact Financial Freedom had on our financial results this quarter, we made progress advancing our strategic goals,” said CIT CEO Ellen Alemany in an earnings call with analysts this week.
CIT’s Financial Freedom business has been reported as discontinued since the company closed its acquisition of OneWest Bank last year. But despite ongoing efforts to minimize exposure and update its policies and procedures around the business, the losses have been sustained.
CIT is also undergoing a HUD OIG investigation “which began in earnest shortly after the close of the acquisition,” its executives said. “We remain committed to exiting from this business as we continue to execute on the plan we laid out in March.”
During the current quarter, the company recorded additional reserves, due to a change in estimate, of $230 million as a result of the ongoing process to remediate the material weakness.
“We are disappointed that the additional charges arising from the legacy Financial Freedom business, which was part of the OneWest Bank acquisition, offset the improved earnings from continuing operations,” Alemany said in a press release.
CIT acquired the parent company of OneWest Bank in late 2015 in a $3.4 billion cash and stock deal. OneWest became the owner of Financial Freedom in 2009 when IndyMac sold to OneWest. Subsequently, OneWest shut down Financial Freedom reverse mortgage origination channels, including the completion of employee layoffs in mid-2011.
Written by Alana Stramowski

RMF Adds Anissa Palmatier to Third-Party Originations Team

Reverse Mortgage Funding expanded its third-party originations (TPO) team this week with the addition of reverse mortgage specialist Anissa Palmatier as Midwest Regional Account Manager.
Effective immediately, Palmatier, who is based in Illinois, will report to Mark O’Neil, RMF’s National Sales Leader.
Palmatier brings more than 15 years of mortgage industry experience to RMF. She currently holds the Certified Reverse Mortgage Professional (CRMP) designation from the National Reverse Mortgage Lenders Association.
“Anissa has been involved with reverse mortgages for over a decade and her expertise and track-record of generating new business opportunities and providing older Americans with the highest quality of service and support make her a perfect addition to our leading and experienced TPO team,” O’Neil said in a press release.
“We are looking forward to leveraging her industry connections, knowledge of the product and her passion for education to help grow RMF’s market share and bring financial security to the growing number of baby boomers who are unprepared for retirement,” O’Neil added.
Most recently, Palmatier served as a Regional Account Manager for top-10 reverse mortgage lender Liberty Home Equity Solutions, where she specialized in wholesale reverse mortgages.
Palmatier’s experience also includes serving as a Mortgage Loan Officer for The PNC Financial Services Group, focusing on reverse mortgages, and having worked at Mortgage Services III LLC, where she was responsible for making connections with banks and credit unions and winning their reverse mortgage business.
“Reverse Mortgage Funding was founded on the principles of providing customers with exceptional service and helping older Americans live comfortably in retirement, which is something that is of the utmost importance to me and has me very excited to join this Company,” Palmatier said in a press release. “I am looking forward to carrying out these values as a member of RMF’s talented TPO team to further advance our business objectives and strengthen our brand recognition.”
Written by Jason Oliva

Embrace Change — Apply for These Reverse Mortgage Jobs Today

Reverse mortgage lenders continue to seek skilled professionals to add to their teams in 2016. Some of the industry’s top lenders are now hiring loan officers, loan processors, underwriters, wholesale account executives and more.
This week’s RMD jobs listings include positions at HighTechLending, Home Point Financial, Reverse, Inc., Liberty Home Equity Solutions and Nationwide Equities Corp.
Click the following opportunities that are now open to find out more. Or for a complete list of jobs, visit the new Reverse Mortgage Jobs Online.

Reverse Branch Manger – HighTechLending dba AmericanSenior
Inside Reverse Mortgage Loan Officer – HighTechLending dba AmericanSenior
Reverse Mortgage Loan Processor – HighTechLending dba AmericanSenior
Reverse Mortgage DE Underwriter – HighTechLending dba AmericanSenior
Reverse Loan Funder/ Doc Drawer – HighTechLending dba AmericanSenior
Reverse Wholesale Account Executive – Home Point Financial
DE Underwriter – Reverse, Inc.
Inside Sales Advisor – Reverse Mortgage Loan Officer – Liberty Home Equity Solutions
National Retail Sales Manager – Nationwide Equities Corp.

Visit our website for additional opportunities in the reverse mortgage industry.
The best and the brightest read RMD. Want them to join your team? Post your jobs to Reverse Mortgage Jobs Online today!
Written by Alana Stramowski

Finance of America Reverse Finds Success With New Ad Campaign

Since the launch of their new marketing campaign titled “It Just Makes Sense”, Finance of America Reverse (FAR) has seen a positive impact on borrower conversion rates.
The campaign commercials, which were tested in April and fully launched this past May, are doing exactly what they had hoped they would do, explains VP of marketing at FAR, Tom Evans.
“So far things have been going quite well,” he says. “We are getting an eager customer in the door. Half of all inquiries from the ads are moving right along in the process and about 8-10% of people who are calling are moving forward into the application for a reverse mortgage.”
The set of six new commercials, are a short 30 seconds each and have a singular focus that include reverse mortgage facts that people can grab right away.
“We’re catching the folks who may have let more old school ads roll off their shoulder, but now our primary message is within eight seconds of the commercial beginning,” Evans says.
Coming from the days of a celebrity spokesman, FAR doesn’t see the need for a two-minute long commercial with a spokesperson anymore, Evans explains. “That method just doesn’t get the draw anymore,” he says. “People’s attention spans are shorter now.”
The change in direction was also due to the shifting demographic, Evans explains.
“Ten years ago, our target was a 75 year-old widow sitting home all day who needed a loan, but now the target is a much more engaged and active member of society who has all the same needs and wants that the rest of us do,” he says.
The more compact ad seems to be working for FAR, as they are seeing a slightly younger group reaching out about the reverse mortgage product. “We have a complete digital package,” says Evans. “We have the TV ads as well as the videos up on Youtube and other online locations. It appears to be encouraging a slightly younger demographic.”
The cultural shift is another hurdle FAR is trying to get over. In the past, older parents were wary of tapping into their home equity because they didn’t want to jeopardize the legacy they could leave for their children, but that is not the case anymore.
“The last thing I want my parents to do is worry about me,” Evans shares. “They deserve what they need now. That’s why these ads get the facts in front of them fast and then it just makes sense to keep that money in their pockets.”
As of right now, the ad campaign will be ongoing and the next phase will be to continue to roll out more single-focused reverse mortgage facts in commercials that consumers can pick up right away. Expansion of the campaign, however, is not planned at this time.
Written by Alana Stramowski

CBS News: Don’t Neglect Home Equity in Retirement Planning

For Americans moving into retirement who are cash poor, but home rich, it may be a mistake not considering tapping into their home equity, according to a recent article from CBS News MoneyWatch.
A large number of Americans hold the bulk of their assets in their home equity. In all, Americans have more than $12.5 trillion in home equity, according to the Bipartisan Policy Center (BPC), which recently issued a report spotlighting the importance of housing wealth in retirement planning.
A common mistake among Americans is that they are taking out home equity loans while they are still in the workforce and using the funds immediately. This could deplete the equity in the home that could be used to tap into retirement in the future, the article explains.
Preserving home equity to use in retirement is a strategy suggested by the BPC report, especially for those people who may not have saved enough over their working years for retirement.
Reverse mortgages are brought up as a potential way to tap into home equity. There are several ways a reverse mortgage can be used to help secure retirement. Retirement researcher Dr. Wade Pfau gives some suggestions.
A borrower can elect a monthly payment for life; receive a monthly payment for a fixed term take a lump sum payment to retire other debt; elect for a reverse mortgage line of credit that’s only tapped into if retirement savings are depleting; or use invested assets to cover regular monthly living expenses and tap the reverse mortgage to cover monthly living expenses when savings are depressed due to stock decline, the article writes.
It is pointed out that if there is sufficient amount of home equity being worked with, the borrower can combine certain strategies to optimize the results and make it work for their specific situation.
Whichever option borrowers choose, they must be sure to educate themselves before jumping right into a decision.
Read the full article from CBS News
fWritten by Alana Stramowski

How Senior Homeowners Are Reversing the Conventional Wisdom on Housing

Never a generation to shy away from the norm, Baby Boomers are changing what it means to be an older homeowner in the U.S., according to a recent study.
“Baby Boomers—like Peter Pan—refuse to grow older,” says a new Freddie Mac report titled Fun After Fifty. “Instead of moving to seniors-oriented communities, they ‘age-in-place’ or, even better, move into the hear of a walkable city.”
The age 55 and older population represents a little over a quarter of the U.S. population, but they control roughly two-thirds of the equity in single-family homes, according to U.S. Census Bureau data.
What this generation plans to do with their own housing, the impact of these decisions reverberates throughout the U.S. housing market and has an effect on younger homebuyers.
“Their numbers and their housing wealth guarantee that the housing decisions of older homeowners will play an outsized role in shaping the housing opportunities available to the generations that follow them—Gen X and the massive Millennial generation,” states the Freddie Mac report.
There are several factors at play that are influencing the housing preferences of Baby Boomers and other older homeowners, including longer labor force involvement, aging in place desires, and certain financial issues that contribute to having a financially comfortable retirement.
After “bottoming-out” in the mid-1990s, the labor force participation rate of the 55+ population has been increasing. In 1995, roughly 30% of adults age 55 and older were active participants in the labor force. By 2015, this share of workers grew to approximately 40%.
To gauge the influence of the 55+ population on U.S. housing, Freddie Mac commissioned market research firm GfK to survey a nationally-representative sample of the 55+ population in early 2016 on their attitudes towards their current and future housing options.
One of the most common opinions expressed by adults aged 55 and older was that they want to age in place. When thinking about their preference to relocate, 63% said they want to remain stay in their current residence, while 37% said they would like to move at least one more time.How Senior Homeowners Are Reversing the Conventional Wisdom on Housing
(Click images to enlarge)
Although the vast majority of Boomers said they want to continue living in their current homes for as long as possible, many face financial challenges when it comes to retrofitting their properties to accommodate their needs as they age.
About 33% of respondents said they plan to tap into their personal savings to fund the costs of home renovations and repairs, whereas just under 20% said they wouldn’t be able to make the needed adjustments to their residences.
Only 5% of respondents said they would get a reverse mortgage to pay for home renovations. Meanwhile, roughly 14% said they would tap into a Home Equity Line of Credit, and about 12% said they would obtain some other type of bank loan.How Senior Homeowners Are Reversing the Conventional Wisdom on Housing
A sizable share of the survey sample plans to age in place, but in a “different” place from their current home. For many of them, that place will be another house.
Just under 80% of young Boomers ages 55-61 said they are likely to buy a home instead of renting, while 70% of Boomers age 62-70 plan to do the same.
These findings suggest that roughly 18 million 55+ homeowners may be shopping for another house in the next few years, according to Freddie Mac’s analysis of the survey data.
When it comes to relocating, relatively few older homeowners think it is very important to downsize in their next move. Only 20% said downsizing is “very important”; whereas 32% said “somewhat important”; 31% said “not too important”; and 17% said “not important at all.”
Freddie Mac also asked questions designed to measure the perspective of older Americans on their financial well-being. For the most part, researcher found that respondents feel financial secure and happy with their housing situation.
Even with these feelings, more than a third of older Americans said they still have a mortgage, and a majority of those with a mortgage have more than 10 years left until the balance is paid off.How Senior Homeowners Are Reversing the Conventional Wisdom on Housing
The conventional wisdom on the “housing life cycle,” according to Freddie Mac Chief Economist Sean Becketti, means Millennials should be providing a surge in first-time homebuyers, while older generations move onto the next stage of their housing life. This includes Baby Boomers, who should be downsizing and selling their homes to Gen-Xers, or moving to an age-specific community.
For the most part, people are largely ignoring this conventional wisdom.
“Millennials are taking longer to marry, start families, and buy their first homes,” he said. “And the 55+ population are working longer, aging in place, or buying an additional home (or two) rather than winding down. Furthermore, they expect to be an active part of our housing economy for quite a while longer. Apparently there is a lot more fun after 50 than there used to be.”
View Freddie Mac’s “Fun After Fifty” report.
Written by Jason Oliva

DNC Speech Jokes About Reverse Mortgages and Trump University

The Democratic National Convention in Philadelphia saw the appearance of politicians, celebrities and musicians voice their support for presidential candidate Hillary Clinton, a call for party unity, and just about anything anti-Donald Trump. Also present at the Monday evening event was a small joke about reverse mortgages.
Former Saturday Night Live cast member-turned U.S. Senator Al Franken (D-MN) used the majority of his speech to poke fun at Donald Trump. At one point, Franken joked that he had to use a reverse mortgage as a means to pay for the tuition at the controversial Trump University.
“I got my doctorate in megalomania studies from Trump University,” Franken joked. “Sure, I had to empty out my 401k and take out a reverse mortgage on my house to pay tuition, but Mr. Trump, or rather some people who said they once met him, convinced me that it was worth it, and frankly as a proud alumni of Trump U, we may be ‘misunderstanding’ Donald Trump.”
Monday night also saw comedian Sarah Silverman, a devout Bernie Sanders supporter, join Sen. Franken on stage prior to Paul Simon’s performance of “Bridge Over Troubled Water.” Calling for Democratic party unity, Silverman criticized one-sided supporters of the “Bernie or Bust” movement.
Reverse mortgages have found themselves at the butt of jokes among popular politicians and celebrities in the last year, with the comments made during the DNC serving as the latest instance of a reverse mortgage one-liner.
Earlier this year, Harrison Ford cracked a reverse mortgage joke during an interview with late night talk show host Jimmy  Kimmel. Last year, President Obama joked at a Washington press dinner event that his tenure as President has aged him so much that he might be “ready for a reverse mortgage.”
Watch the video of Franken’s DNC speech at Rolling Stone.
Written by Jason Oliva

White Paper: How to Maximize Your Reverse Mortgage Volume in 30 Days

Today’s reverse mortgage marketplace is more challenging than ever, especially when it comes to growing your monthly Home Equity Conversion Mortgage (HECM) production.
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Written by Jason Oliva

New Study Finds Seniors Hold Biggest Share of U.S. Housing Wealth

Home equity generally increases with age as homeowners pay off their mortgage balances and home values rise, so it’s not surprising that seniors age 65 and older command the largest share of available home equity in the U.S., according to a recent study from the Urban Institute.
Owners age 65 and older command $3.1 trillion of the nation’s accessible housing wealth. This represents 44% of the $7 trillion in net housing wealth that is accessible among American homeowners, according to the Urban Institute’s analysis.
Meanwhile, homeowners under age 40 hold only 6% of accessible housing wealth despite accounting for 17% of all homeowners nationwide.
Accessible housing wealth is even more concentrated in units owned by homeowners age 65 and older without a mortgage. Only 16% of homeowners under 40 were free of home debt, compared to over 70% of those 70 or older.
Moreover, researchers found that although owners age 65-plus without a mortgage made up only 19% of all homeowners, they own 30% of total housing wealth and 35% of all accessible wealth.
“Older consumers are more likely to have paid off all or part of their mortgages before the financial crisis, giving them more equity in their homes and making the housing burden more manageable,” states the Urban Institute in the study.
To measure the net and accessible housing wealth of Americans with owner-occupied homes, the Urban Institute uses the latest consumer credit card data supplemented with public property records and the American Community Survey’s Public Use Microdata Sample data.
Of the 73.3 million owner-occupied units across the U.S., the Urban Institute found 46.4 million had home debt such as mortgages and equity loans. In contrast, 26.9 million homes were owned free and clear without any home debt.
On average, each owner-occupied unit had a net housing wealth of $150,506, after subtracting all outstanding debt. For homes free and clear, the average net housing wealth was $229,296; and $104,932 for those with debt.
The Urban Institute study shows that the drive of Americans to achieve homeownership has generated significant accessible housing wealth. It also shows the inequality in net and accessible housing wealth across households, both demographically and geographically.
These findings raise several important policy questions that examine how homeownership, in and of itself, contributes to inequality; how current government policies exacerbate housing-based inequality; and how the wealth of lower-income homeowners can be better protected against a major downturn in home prices.
“Notwithstanding these concerns, homeownership remains an important part of wealth building among the vast majority of the population,” the report states. “Government at all levels, the government-sponsored enterprises, lenders, housing providers, and advocates must work together to improve access to mortgage credit that allows owners to sustain homeownership and enhance the economic well-being of their families.”
View the Urban Institute study here.
Written by Jason Oliva

CNBC: As Social Security Flattens, Reverse Mortgages Enhance Retirees’ Buying Power

There has been a lot of discussion surrounding the future of Social Security and how that may affect older American’s retirement. With no bump in benefits likely for next year, some retirees could turn to reverse mortgages as an alternative source of cash flow, according to a recent CNBC article.
The Board of Trustees of the Social Security Trust Funds released information that estimated that the increase in cost-of-living adjustments  will be very small or flat, CNBC reports. Last year it was 0.7% and now is estimated to be zero.
In May the average monthly retirement benefit was about $1,300, the article writes, but for most retirees, that amount is not enough to live off of. The strategy of using a home equity conversion mortgage is brought up as a possible alternative to increasing cash flow in retirement.
“This is a reverse mortgage that permits older homeowners to tap some of their home equity,” the article states. “As long as borrowers meet the terms of the mortgage and continue to use the home as their principal residence, they will not have to repay the loan.”
There are however around 34% of senior households who still owe money on a mortgage, home equity line of credit, or both, in 2013, which could be a problem for some people who may want to look into a reverse mortgage.
In addition to the flat Social Security payments, some retirees may have to face higher costs for Medicare Part B, the article points out. A reverse mortgage could also help with higher medical costs. There are certain Part B protections that may not apply to everyone, leaving many retirees with very high health care costs.
Read the full CNBC article 
Written by Alana Stramowski