One Reverse Mortgage, a Quicken Loans company, is reportedly pausing operations, according to a statement delivered to Reverse Mortgage Daily.
While it’s unclear what the word “pause” means at this time, RMD also noted that the lender doesn’t expect to originate any more reverse mortgages.
However, they will continue to process loans already in the pipeline to ensure existing customers aren’t disrupted by the news.
Quicken Focused on Rocket Mortgage Brand
Per a Quicken Loans company spokesperson who communicated with RMD, the move relates to the company’s goal of focusing on its burgeoning Rocket Mortgage brand.
While Rocket Mortgage is a technology developed by Quicken Loans, it has perhaps become bigger than Quicken itself, at least as a household name for consumers.
To that end, employees of One Reverse Mortgage will apparently be transitioned to roles within Quicken Loans that focus on forward, conventional home loan lending.
The spokesperson noted that they “see demand shifting from the reverse mortgage market” while at the same time the Rocket Mortgage brand “continues to grow.”
The fact that they’re moving employees sounds like it could be the end for One Reverse Mortgage, though that hasn’t been clearly communicated just yet.
But the spokesperson did add that the ORM employees would be used to meet the “growing needs of Rocket Mortgage.”
In other words, it sounds like they care more about making Rocket Mortgage bigger than they do originating reverse mortgages, which are a specialty mortgage product for seniors 62 and older.
Reverse Mortgage Market May Not Be as Lucrative
Interestingly, One Reverse Mortgage had just rolled out a private-label alternative to the FHA’s Home Equity Conversion Mortgage (HECM) known as Home Equity Loan Optimizer (HELO) in summer 2018.
The product was intended to make reverse mortgages available to more homeowners by allowing loan amounts as high as $4 million and opening the door to additional property types such as condos and those with solar-panels.
These expanded loan limits and looser underwriting criteria may have been a sign that the market was effectively tapped.
And perhaps after a year and change, the company came to the conclusion that there just wasn’t a big enough market to justify running a separate company dedicated to reverse mortgages.
The fact that mortgage rates are near record lows probably doesn’t help either, with demand in their forward business probably calling for more staff and resources.
Quicken Loans Inc. and Rockbridge Growth Equity LLC acquired San Diego, CA-based One Reverse Mortgage in January 2008.
At the time, the company employed about 100 people and focused on jumbo and FHA-backed reverse mortgages.
Per RMD, One Reverse Mortgage was the second largest reverse mortgage lender in 2019, up from fourth in the 2018 rankings.
Perhaps the worst news here is that we won’t get to see Henry Winkler star in any more reverse mortgage ads for the company, though the two had reportedly parted ways before today’s news came to light.
The good news is Magnum P.I star Tom Selleck is/was the spokesperson for competing reverse mortgage lender American Advisors Group (AAG), which now offers forward mortgages.
Perhaps that’s a sign.