This week we saw an influx in reverse mortgage applications being transferred from other lenders to our company. Apparently many of the large banks offering reverse mortgages would rather change the rules on a Senior just before closing than give up any profit on the loans.
One Senior was surprised with needing thousands of dollars to close because of the elimination of the HECM LIBOR 250 PROGRAM margin that he had originally been quoted. Unwilling to close under these terms he sought out an alternative lender, he came across our website and we were able to match his original principal. As a smaller lender we are willing and able to make the decision at the local level to drop our profit on a loan to help a senior. With big banks this decision is made at a much higher level and they are unwilling to make changes to help one person, on the smaller side mortgage brokers do not have the ability to offer below market margins. As a smaller FHA Direct Endorsement Lender we are able to set our own rates and fees. This allows us to make a decision to lower our profit and offer a below market program when it's the right thing to do for the Senior.
This business philosophy is paying off because we are seeing a large increase in business with all of these files being transferred to us from other lenders.
Another important aspect of this is our loan officers being paid on Salary. In most situation the loan officers income is directly tied to the company profit on each loan in the form of commissions. In our company our corporate loan officers are paid a nice salary so they can offer the best possible loan and service to our customers without worrying about the impact on their pocket.
If these big banks can't figure out a way to put the customer first, particularly on Reverse Mortgage Loans, they are going to continue to lose loans to smaller lenders like us.