Why reverse mortgage lenders are making moves in home modification circles


For most reverse mortgage companies, communicating the product’s potential benefits to potential borrowers focuses on one kind of improvement: improving your cash flow in retirement; your quality of life; your wallet; your purchasing power; etc. Another potential application for the proceeds of a reverse mortgage is to improve the home itself. This can be done either for general comfort and cosmetic purposes, by making up for necessary repairs that may have been postponed before, or by redeveloping the home so that an occupant can age in place more easily.

Reverse mortgage lenders realize that aging in place is often a critical part of a person’s decision to get a reverse mortgage. the reverse mortgage mission. In that vein, the industry has seen major demo actions from at least two major reverse mortgage lenders that aim to bridge the gap between reverse mortgages and home modification.

Lender approaches

Earlier this year and shortly after its IPO, Finance of America Companies – the parent organization of the leading reverse mortgage lender Finance of America Reverse (FAR) – announced the acquisition of the “Benji” home improvement financing option. An offering she acquired from Renovate America, Inc. The Benji acquisition evolved into a new FoA vertical called Finance of America Home Improvement (FOAHI), which led the company to era had major potential to interact with other verticals like Finance of America Mortgage (FAM) and FAR.

Most recently, current industry leader American Advisors Group (AAG) announced a partnership with home improvement community VGM Live at Home, a nationwide collaborative member community providing services to independent vendors and contractors. and certified accessible home modification. The deal between AAG and VGM saw the reverse mortgage lender become VGM’s official “equity solutions provider”, seemingly streamlining the path between home modification and a reverse mortgage that can be used to help fund. such efforts.

While fundamentally different on a fundamental level, the fact that two major reverse mortgage lenders are devoting so much time, attention and resources to the home modification industry could indicate a new focus on these efforts by the broader mortgage industry. reverse mortgages. According to the executives of AAG and FAR, it was not difficult to find the appropriate synergies, nor a complicated process to extrapolate the potential benefits for both senior borrowers and companies currently operating in the lending arena. reverse mortgages.

FAR: a new vertical, and a potential new collaboration

A key motivator on the part of Finance of America at-large, and FAR in particular to gain attention in this area, is in part that the elderly population has been hit hardest by the coronavirus pandemic. COVID-19. This is according to Kristen Sieffert, president of the FAR.

FAR President Kristen Sieffert

“We know people want to stay at home and age in place,” Sieffert told RMD. “It’s a trend that has become even more prevalent given the pandemic. As older Americans redesign their space to make it as comfortable and functional as possible, they may need some renovations to create their forever home.

A new dedicated vertical within the larger FoA organization provides opportunities to identify ways in which certain customers can benefit from some sort of home modification, says Sieffert, which absolutely includes the older people served by the products of reverse mortgage loan from FAR.

“At FAR, we’ve seen first-hand how clients are effectively using their home equity to give them the financial flexibility they need to age in place,” says Sieffert. “Plus, through our partnership with Silvernest, their insightful customer surveys tell us that older homeowners want to make repairs so they can share their homes in order to generate income and foster camaraderie, both essential for a successful home. healthy and holistic retirement. Photo.”

FAR announced that it had entered into a partnership with Silvernest – a colocation and housing sharing company primarily aimed at baby boomers – in November 2018. At the time, FAR said that housing sharing could potentially serve as both an alternative to the reverse mortgage and a complement to it. However, identifying possible synergies between Silvernest and the new home improvement vertical is an ongoing process.

“We are exploring different ways for FAR and Silvernest to work with FOAHI to leverage their unique platform, enabling more homeowners to undertake home improvement projects,” said Sieffert. “Ultimately, we want to make it easier for homeowners to unleash the power of their home and help them thrive in retirement.”

AAG: the VGM Live at Home partnership

Earlier this month, AAG announced that it has entered into a partnership with VGM Live at Home as the official home equity solutions provider. exclusive reverse mortgage products.

Jesse Allen

The impetus for the partnership comes from a desire on AAG’s part to ensure that those who wish to age in place but need additional work on their home to be able to facilitate this effort can have an additional option to achieve this goal until its completion. That’s according to Jesse Allen, executive vice president of alternative distribution at AAG.

“We know we get better results when people age in place,” Allen said on a recent episode of The RMD Podcast. “Research shows you [that seniors find better] medical, health, longevity and cash flow results, but your home may not be designed that way. It is a very practical problem.

By connecting seniors to a dedicated network of business partners who aim to help seniors shape their homes into more livable spaces over time, VGM Live at Home helps facilitate solutions that AAG borrowers cannot. “just not having access or that they are unaware of,” Allen said.

“We were looking for like-minded partners who share a desire to do business with this target audience, and we believe they can help through partnerships,” Allen explained. “And it just happens to be a sponsorship, so we can educate their members. It’s all about education. It comes from my days as a banker. We think the pension crisis is real, the numbers are real. And if we do a great job educating stakeholders and including partners like VGM and their clients, and give them very professional salespeople across a multitude of touchpoints, they will eventually be motivated to act. This is therefore the “why” behind the sponsorship of VGM. “

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