June 15th, 2017 | by Alex Spanko | HECM, News, Open Mortgage, Reverse Mortgage
Back in 2015, when Open Mortgage first entered the wholesale reverse-mortgage marketplace, the Austin, Texas-based firm was mostly just doing a favor for one of its former employees.
It all started when an employee-turned-broker provided a lead on an interested borrower, Open Mortgage president and CEO Scott Gordon told RMD. But Gordon said he wasn’t immediately sold on whether wholesale lending would be a long-term play.
“At the time, I thought: Why would we want to do wholesale? Those people will only send you a loan if you have the best price today,” Gordon said.
Over time, though, Gordon found that broker partners weren’t necessarily just on the lookout for the best rates, and came to see wholesale lending as a way to boost overall volume for his company.
“What we’ve discovered is that if you do a good job for people, they’ll send you all their loans,” Gordon said.
That’s why Gordon and Open Mortgage announced the expansion of the firm’s wholesale business this week, primarily through the hiring of dedicated leaders to oversee the Home Equity Conversion Mortgage effort and a separate forward channel, which will offer a variety of products including Federal Housing Administration, Veterans Affairs, and Department of Agriculture loans.
Brenley Gagnon will serve as the regional sales manager for wholesale HECMs.
“The reverse mortgage industry is misunderstood, and many brokers and clients don’t understand how these loans can change the lives of seniors for the better,” Gagnon, an 18-year mortgage industry veteran, said in a statement announcing his hire. “It’s an exciting time to be in this industry.”
He’ll be leading a relatively new team: Gordon said Open Mortgage only began building a dedicated group of wholesale salespeople about six to eight months ago, with a focus on developing educational materials and partnerships. The firm spent about a year creating “Open Mortgage University,” an educational program for brokers, according to Sharon Falvey, the firm’s vice president of sales. The educational offerings also include specialized “pathways” to help brokers target specific audiences, such as real estate agents, financial planners, and attorneys, Falvey said.
These “pathways” include white papers, tips on where to make connections with particular types of partners, examples of the language that they use, and explanations of how they make their money — all in the service of bringing new brokers into the business and potentially closing more loans. Open Mortgage also entered into an exclusive partnership with the American CE Institute, a Clearwater, Fla.-based HECM training firm, to offer classes and continuing-education credits to referral partners.
“We could really take somebody who’s a new loan originator for one of our brokers, and provide this training to them, and get them up and running much, much faster than they ever could on their own,” Falvey said.
Since entering the wholesale market in 2015, Open Mortgage has generated a relatively small portion of its loans through the wholesale channel: Of the 629 HECM endorsements that the company logged in 2016, only 52 came through wholesale partners, according to data from Reverse Market Insight. But both Falvey and Gordon declined to identify a strict origination target for the new wholesale push, instead focusing on building a reputation as a trusted partner for brokers.
“If we can grow our wholesale business and develop that image of us, then that’s more important to me than saying [we’ll] double our volume,” Gordon said.