Being able to originate a compliant reverse mortgage loan using existing technology and staff is a huge advantage for lenders.
George Morales has joined Mortgage Cadence as our latest Product Manager with a specific focus on reverse mortgage lending with the new Mortgage Cadence Platform (MCP). George has been a leader in the housing industry for nearly 25 years, the last 11 of which he has spent focused on the FHA’s Home Equity Conversion Mortgage (HECM), otherwise known as the Reverse Mortgage.
We caught up with George to ask him why he chose the Mortgage Cadence opportunity and what he hopes to accomplish in his new role.
MC: George, welcome to the company. Why did you decide to take us up on this opportunity?
Morales: I’ve been working in the reverse mortgage industry long enough to know that the technology reverse lenders are using today tends to be a few years behind what is available on the forward lending side of the business. There are still too many manual and incompatible processes for homeowners, originators, lenders, and anyone involved in loan manufacturing.
What I saw in MCP was something different. Now, using the very same technology originators are using for forward mortgages, both forward and reverse lenders can have access to a modern tech solution, that is accessible on-demand for sales teams, lenders, and borrowers anytime from any device without having to download any software.
When I saw the Mortgage Cadence opportunity, I realized I was looking at a revolutionary mortgage technology platform that would change the way both the forward and reverse sectors of the industry looks at reverse mortgages and serving older homeowners.
MC: What makes you believe reverse lenders will adopt MCP?
Morales: First, it’s unlike anything reverse mortgage lenders have had access to in the past, so I’m sure they’re going to want to see it.
But I think the real opportunity is for lenders who have not originated these products in the past, but have a pressing need now to expand their product menus in response to falling loan volumes. Being able to originate a compliant reverse mortgage loan using existing technology and staff is a huge advantage for lenders.
MC: You’ve gone on record saying you expect reverse lending to increase, but interest rates are still volatile. What impact will this have on this business?
Morales: First, mortgage interest rates don’t have the same impact on existing reverse mortgage borrowers, because those homeowners don’t have a required monthly mortgage payment that would increase as rates have increased. Reverse mortgages use the 10-year Constant Maturity Treasury (CMT) as part of the loan qualification process, and when the 10-yr CMT goes up borrowers qualify for less loan proceeds. When that 10-yr treasury falls, borrowers can access more funds.
But the lack of a required monthly mortgage payment usually isn’t the only reason borrowers want a reverse mortgage. Borrowers seek out these loans because they make sense when incorporated into an overall retirement strategy.
Another reason I anticipate seeing more reverse mortgage originations is demographics. According to the U.S. Census Bureau, about 10,000 people each day are reaching the minimum age for an FHA HECMreverse, 62 years. The minimum age for proprietary reverse mortgages is 55 years. Thanks to modern medicine and better lifestyles among seniors, older homeowners are living longer than ever. This is great, but it also means that their need to ‘outlive-their-money’ is growing and therefore adding home equity to their retirement plan is prudent, especially if implemented early in retirement.
Finally, and we’ve already touched on this, lenders are adding more non-traditional products to offer and part of their growth strategy is to serve as many borrowers as possible, especially the underserved older homeowner.
MC: What is your overall goal in your new position?
Morales: For some time now, Mortgage Cadence executives have had this idea of providing the technology that can serve all borrowers, from a homeowner’s very first mortgage loan through their last mortgage. That’s where a reverse mortgage comes into play. I'm here to leverage my background in reverse mortgage lending and help make this goal a reality for MCP and our clients
George Morales, Reverse Mortgage Product Manager at Mortgage Cadence
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