As mortgage originations slow and reverse mortgage eligibility increases among the baby boomer demographic, an opportunity exists for mortgage professionals in all aspects of the business to take advantage of this already existing product.

With industry estimates of 35 million senior citizens in the United States today and another 77 million baby boomers reaching senior age—most of their wealth is locked in their home equity—only 1 percent of the population has tapped into the reverse mortgage lending market.

"It is a wave," said Dan Sogorka, president of Real EC Technologies, Santa Ana, Calif. "A lot of people are trying to get into it—that's for sure."

"It is a genuine opportunity for lenders," agreed Stephen Margrett, CEO of The Turning Point, Sedona, Ariz.

"There are a lot of warehouse lenders in that particular space being able to service funding [reverse mortgages], but how substantial in relation to the entire industry it will be is still questionable," said Stanley Street, president of Street Resource Group Inc., Atlanta.

The wave garnered some strength this year as actor Robert Wagner, the keynote speaker at this year's NRMLA Annual Meeting and Expo, got into the act as spokesperson for a national consumer education campaign on reverse mortgages created by Lender Lead Solutions, a division of Vertical Lend, Melville, NY. Lender Lead Solutions launched a new advertising campaign for its Senior Lending Network to educate senior citizens on the features and advantages of reverse mortgages, consisting of a series of advertisements featuring Wagner.

Wagner spoke of the misconceptions that seniors often have about the product and the positive response shown from borrowers. "He has been a key supporter and brings a wealth of knowledge to this year's meeting," said David Peskin, CEO of Lender Lead Solutions.

In the late 1980s, the reverse mortgage industry received a black eye when predatory lending scandals caused some elderly borrowers to lose their homes. Loan terms were changed at closing, and some products carried higher interest rates, fees and negative amortization that led to foreclosures.

"Now, the systems are much better and protections are better," Street said. "From a technology perspective, we can target it because there is something there—and, it's a standardized product."

Industry analysts estimate nearly 90 to 95 percent of reverse mortgage products are under FHA HECM [Home Equity Conversion Market] and sold to Fannie Mae for securitization.

Mortgage Cadence Prelude, point-of-sale software announced this week by Denver-based Mortgage Cadence Inc., would allow lenders to originate reverse mortgages by tying into processing software. According to Mortgage Cadence CEO Michael Detwiler, four of the top five reverse lenders in the country already use Mortgage Cadence Orchestrator ELS for reverse lending. He said a desperate need for reverse lending POS software exists to interface with origination platforms.

"There is a need in the market for point of sale technology that allows originators to satisfy customers more effectively. This market is growing very rapidly and the software lenders are offered to serve customers is sorely lacking," Detwiler said.

Mortgage Cadence Prelude provides an "on-demand offering" provide through a transaction-based model with no cost of entry. Originators that choose to use Prelude could have the software running within 24 hours, according to the company. "We saw the potential in the reverse mortgage lending market years ago and we've built enough power into our software that four out of the top five reverse lenders are using it," Detwiler said.

Ken Austin, president of Reverse Mortgage Solutions Inc., Spring, Texas, said more proprietary products started moving into the market earlier this year with new offerings. Up until then, 100 percent of HECM product was sold to Fannie Mae—which has set up its own delivery mechanism—but Wall Street is beginning to gain interest.

"We have to do a very good job, as an industry, to police ourselves, define these products and not allow what happened in the past with this product…because it can quickly get out of hand," Austin said. "That is what can basically happen with the reverse mortgage if we don't do a good job of policing ourselves as an industry."