Rick Grant & Associates

Image via Wikipedia

Back in the late 90s I interviewed some mortgage technologists who believed that the future of mortgage loan origination would not lie with mortgage brokers or even mortgage bankers, but with third party advisers. Financial planners, accountants and insurance agents would be the new originators, I was told, and the company–which is now out of business–showed me the platform it hoped they would use to write new business. Sometimes, new offerings are ahead of their time.

Recently, I visited with the CEO of a Web-based loan origination system (LOS) that was perfect for insurance agents interested in originating mortgage loans. The company had rolled it out to a bank owned by an insurance company, which had deployed it to its national network of agents. Nothing. But today, I saw some news that told me we might be getting there.

I was reading John R. Yedinak’s blog, Reverse Mortgage Daily, when I came across this story about MetLife’s acquisition of EverBank Reverse. The insurance company bought the reverse mortgage lender back in June about the time of its acquisition of the retail mortgage business of First Horizon National Corp. Now, MetLife has over 200 retail mortgage locations, according to Yedinak.

Prior purchasing First Horizons mortgage platform, MetLife had no retail mortgage locations but still originated loans through referrals from insurance agents. Being one of the largest insurance providers, having its own reverse mortgage company makes a lot of sense. MetLife became the second major insurance company to purchase a reverse mortgage lender after Genworth acquired Liberty Reverse in 2007.

According to Yedinak:

It’s unlikely we will see any real integration between its reverse mortgage and insurance companies until HUD issues its guidance on cross selling products with reverse mortgages. Included in the Housing and Economic Recovery Act of 2008 is a provision sponsored by the “Award Winning” Senator Claire McCaskill, which requires reverse mortgage lenders to maintain firewalls and safeguards between any associated financial or insurance companies.

He says HUD plans to issue a definitive guidance “in collaboration with the industry through an administrative process.” That means the agency will seek comments from the industry and the public.

During the process, FHA will seek comments from the public and I would expect MetLife and Genworth to be very active participants in the process.

MetLife has already started the PR process.

Tags: mortgage

This entry was posted on Monday, October 20th, 2008 at 6:41 pm and is filed under in the news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.