Lender Name: Finance of America Reverse (FAR)
Headquarters: Tulsa, Oklahoma
States licensed: All 50 for HECM, 25 states for proprietary
Company leadership: President Kristen Sieffert, Chief Operating Officer Susan Anthony, and Chief Development Officer Sherry Apanay.
Product offerings: HECM, “HomeSafe” product line (proprietary reverse mortgages)
Lender ranking: Finance of America Reverse is the second-highest ranked reverse mortgage lender by loan volume based on October 2019 data.
Brief history: Founded in October of 2003 as Urban Financial Group, the company that would later become Finance of America Reverse built itself up over the following decade after its incorporation into one of the largest reverse mortgage lenders in the United States. By 2013, Urban Financial Group had become a top five lender in the business based on origination data, and that year the company was also sold by its parent company Knight Capital Group to a private investment firm.
November of 2013 also saw the company undergo its first name change, this time to Urban Financial of America, along with introducing a new logo and marketing materials along with an expanded web presence. That December, the private investment firm closed the deal of its purchase of Urban for a deal valued at $80 million, according to reverse mortgage industry news publication Reverse Mortgage Daily.
By that point, Urban comprised the largest reverse mortgage wholesale division in the industry, as having an expansive presence in terms of its retail operations.
By late 2014, Urban Financial would take its arguably biggest step in terms of differentiating itself from the other top reverse mortgage lenders in the industry. That August, the company announced that it would be entering the private reverse mortgage space with the introduction of “HomeSafe,” a proprietary reverse mortgage loan that has no connection to the Federal Housing Administration -run Home Equity Conversion Mortgage (HECM) program. HomeSafe was first designed as a “jumbo” reverse mortgage loan, targeting seniors with home values sometimes well above the lending limit that governs the HECM program.
In the product rollout, the lending limit for HomeSafe sat at $2.25 million and was available initially in five states: California, Florida, Hawaii, New Jersey and Texas. At the time, the HECM lending limit sat just under $470,000. The introduction of HomeSafe marked the beginning of something of a new era for proprietary reverse mortgages, since that market had been dominated for several years by only one other product: Generation Mortgage’s Generation Plus jumbo loan, which hit the market in 2010.
While that product would lend at the time anywhere between $500,000 and $6 million, the entry of Urban Financial into the space would prove to be an important moment for the company especially when taking into account its future plans for proprietary products, and the reaction that the market would ultimately have to them several years later. In early 2015, Urban announced additional HomeSafe product changes designed to improve its loan-to-value (LTV) ratio, while also expanding its availability.
In August of 2015, the equity firm that owned Urban Financial adopted the name Finance of America Holdings, and had acquired several additional companies including Gateway Funding Diversified Mortgage services, Pinnacle Capital Mortgage and certain assets of PMAC Lending Services. These acquisitions made the holding company one of the largest non-bank originators in the United States, with licensing in more than 45 states and lending services that spanned retail, wholesale and correspondent operations, as well as servicing capabilities.
That December, Urban Financial underwent its second and most recent name change, this time to Finance of America Reverse (FAR). A motivating factor for the brand refresh was in unifying the Finance of America brands in order to establish the diversity of its products and services available to customers, according to company president Kristen Sieffert in a statement to Reverse Mortgage Daily.
“Finance of America will be synonymous with all types of lending, and reverse mortgages are a key component of that business,” Sieffert said in a written statement to the publication. “Changing our name also increases transparency and assists us in placing all consumers into the product that best serves their lifestyle.”
After spending the following few years continuing to establish itself as a major reverse mortgage lender for both HECM and private reverse mortgages, FAR would go on to increase the HomeSafe lending limit and add additional product changes in 2017. One of FAR’s chief competitors, American Advisors Group (AAG) had at one point indicated that it had plans to develop its own proprietary reverse mortgage offering at some point in the future however in March of 2018, it was announced that AAG had entered into a correspondent partnership with FAR to offer its HomeSafe proprietary product.
On a retail basis, AAG announced that it would offer FAR’s HomeSafe loan under the name “AAG Advantage” on a retail basis, and as “AAG HomeSafe” on a wholesale basis.
“What’s great about this agreement is that by driving volume, we are allowing for more flexibility and product improvements, which ultimately will benefit consumers,” said AAG CEO Reza Jahangiri to Reverse Mortgage Daily. “Product innovation will be instrumental in helping more seniors access home equity to get better retirement outcomes and maintain their standard of living.”
After successfully establishing HomeSafe, in June 2018 FAR introduced a new product variation into the HomeSafe product line. “HomeSafe Flex” is another proprietary reverse mortgage loan which allows for more flexible draw of the loan’s proceeds. Just a few months later, the company added “HomeSafe Second” that September, which marked the first-ever second-lien reverse mortgage made available on the market.
Just a month after that in October, the introduction of “HomeSafe Select” marked the arrival of a proprietary Home Equity Line of Credit (HELOC) loan to the product suite and rebranded the original HomeSafe loan under the name “HomeSafe Standard.”