Finance of America Chief Product Officer: Reverse Mortgages “Essential” to Diverse Product Line
While the total number of reverse mortgage professionals attending the HW Annual in Frisco, Texas last September was minimal compared to the number of forward mortgage lenders and sellers, at the C-level it dedicated one to the executive major mortgage company spent some of their time on a panel discussion at the event to discuss the importance of reverse mortgages for a comprehensive and diverse range of products.
Kathryn Amor, Chief Product Officer at Finance of America Companies, spoke during the event’s mortgage purchase panel about what Finance of America Reverse (FAR) is on the table for the larger parent company. To delve deeper into the relationship between FAR and its parent company, RMD sat down with Amor to get a better idea of ââwhat the Reverse Mortgage Division and its products are bringing to the larger company’s proverbial table.
An “important” component for the variety of products, smaller does not always mean a “niche”
When asked specifically what is the reverse of the larger Finance of America organization, Amor described a category of product with a unique feature set that enables the larger company to demonstrate how extensive it can be as a provider of various types of mortgage solutions.
“Reverse mortgages are an important part of Finance of America’s diverse offering of flexible, end-to-end consumer credit solutions that span the full spectrum of home finance and home finance,” she explains. “They complement the offerings of our Finance of America Mortgage and Finance of America Commercial divisions and bring – in a broader sense through Finance of America Reverse – increasingly important and flexible alternative financing options to our discussions with customers during their financial journey.”
One of the reasons the company remains committed to reversing is because of seniors’ demographic and borrower trends, who continue to face a pension finance crisis.
“We look at market dynamics and lending from a long-term perspective and aim to develop and deliver innovative products that we believe meet the changing funding needs of consumers at different stages of life and during changing economic cycles and credit conditions,” she says. âWe believe that as interest rates rise, borrowing will become more difficult and expensive, which limits many consumers’ access to finance. At Finance of America, our goal is to be a trusted, reliable partner for consumers who is always available regardless of market conditions to provide appropriate products and in-depth advice to meet their specific needs. “
Amor is also quick to point out that smaller reverse mortgage volumes compared to the forward side doesn’t necessarily mean that reverse mortgages are a niche offering, some sort of reverse offering.
âReverse mortgages have been part of our loan solutions toolkit since we were founded,â she says. âAnd without them, in our opinion, no balanced product strategy is complete. Reverse mortgages are a key component of our diversification and an important product offering that helps us offer our customers a broader range of financing alternatives. I think you can say that the reverse is in our DNA. “
Reversible Mortgages and the Buy Market
When it comes to serving mortgage customers aged 55 or over, foregoing a reverse mortgage option of any kind can lead to an incomplete process, according to Amor. Whether through FHA-backed or proprietary loan options, the many features available with both products have the potential to meet the needs of seniors more efficiently than exclusively forward-thinking mortgage options.
“Finance of America Reverse provides the innovative solutions our industry needs to help older Americans realize their retirement dreams by leveraging home equity to fund their non-working years,” she says. “FAR is a leader in reverse mortgage product innovation and uses a thoughtful blend of ingenuity, technology and education to design and deliver retirement solutions well ahead of market needs.”
Older homeowners who may be looking for a new home might also encounter the barriers that accompany the cohort’s collective financial troubles, but reverse mortgage product options could provide a solution for homeowners in this situation, she says.
“We know that many aging homeowners have not saved enough to have financial flexibility in retirement and carry huge debts, which makes financing them through traditional products very difficult and expensive,” she says. âAt the same time, the equity in their houses continues to grow. Reverse mortgages are an eloquent alternative way to use this equity and provide financing for many seniors to retire to their homes. “
Product training and the need to connect
However, echoing the concerns of many in the reverse mortgage industry, Amor points out the ongoing issues related to product awareness and education of borrowers about reverse mortgage products and obligations.
“One of the biggest drivers between older Americans and financial flexibility in retirement is awareness of reverse mortgages and an understanding that it is a safe and sound financial tool,” she says. âFor this reason, education is at the heart of FAR’s mission. People have not been fully made aware of all of the flexible options, including reverse mortgages, available to today’s modern borrower, or they have preconceived notions based on outdated or incorrect information about older reverse mortgage products. “
This also extends to a lack of awareness of reverse mortgage options that are not supported by FHA, such as proprietary reverse mortgage products offered by FAR and other major lenders. One of the ways the FOA hopes to change that is the availability of the hybrid forward-reverse product offering, EquityAvail, which was announced earlier this year.
âIt’s a unique hybrid of its kind, combining aspects of traditional and reverse mortgages to give homeowners on or about to retire – what we call ‘pre-tirement’ – more choices and help maintain cash flow and finances improve stability while being better prepared for unexpected expenses, âshe says.
In view of how the company and the reverse mortgage industry as a whole can address education-related concerns and the dissemination of accurate product information, Amor describes the need to continue national efforts to expand consumers’ knowledge base about lending later in life.
âThis is a critical time in our history when a holistic approach to retirement provision and access to alternative financing products that leverage the responsible use of home equity are a necessary addition to existing preventive measures, especially if we want to adequately support the growing segment . âBy people at or near retirement age,â she says. “Whether it’s rising health care costs, our lifespan extensions, or shrinking benefit plans like pensions, many Americans just don’t have enough money to afford retirement.”
Look for an additional perspective from Kathryn Amor soon.