Headquarters: Mahwah, New Jersey
States licensed: Longbridge is licensed in 49 states and the District of Columbia
Company leadership: Christopher Mayer, CEO. Manjiang Xu, President and Chief Operating Officer
Product offerings: HECM, The Platinum (proprietary)
Lender ranking: Longbridge Financial is the ninth-highest ranked reverse mortgage lender by loan volume based on August 2019 data.
Brief history: Originally founded in 2012, Longbridge Financial is the result of a unification of several financial services experts hailing from companies including New York Life, Fidelity and MetLife, and operates as a full-service reverse mortgage lender across the United States. Longbridge also retains the servicing rights for the loans it originates, and is a licensed Government National Mortgage Association (GNMA, or “Ginnie Mae”) issuer.
A big change in Longbridge’s trajectory came when the company’s first CEO and one of its original co-founders, John Sinclair, left the company in 2013. Assuming his position was Dr. Christopher Mayer, a real estate and financial market researcher and scholar. Mayer had previously worked at the Federal Reserve Bank of Boston in addition to serving on the faculty at both the University of Michigan and the University of Pennsylvania and Columbia. He had also previously been director of the Paul Milstein Center for Real Estate.
Mayer was also an academic who saw value in the proliferation of the reverse mortgage product, acting as an investor and entrepreneur before being asked by Sinclair to join the advisory board of the upstart Longbridge. When another Longbridge Financial co-founder, Michael Gordon, left the company to pursue other endeavors, Mayer replaced him as CEO in 2013 and has been serving in that leadership position at the company ever since.
Over the next several years, Longbridge went from a less prominent player in the reverse mortgage industry to becoming one of the top 10 lenders by volume, turning into one of the largest originators as well as one of the largest servicers of reverse mortgage loans in the nation. Mayer attributes some of Longbridge’s financial success to the answering of a real need in the retirement planning community, since as an academic he relates to seeing a great deal of potential and necessity for seniors who have sought to try and find different sources of funding in order to make ends meet in their post-working lives.
Research is also an important part of the way that Longbridge conducts its business, finding substantive and corroborative facts to back up why it makes the moves within the industry that it does.
“Research is critical to what we do at Longbridge,” Mayer said in an interview with Reverse Mortgage Magazine in 2018. “We have a very structured approach to modeling the value of reverse mortgages and trying to link capital markets with how the company operates every day. That disciplined approach comes from my background as a researcher and working with other people who have that same approach to thinking about valuation. We constantly try to understand where the market is and that has worked out well for us as a company thus far. We look at reverse mortgage clients, at the levels of credit being extended and we figure out where we can find value.”
While in the early years Longbridge saw its operations primarily funded by its officers and even their families, a contract with the Bank of New York Mellon Corporation (DBA BNY Mellon) gave Longbridge the opportunity and resources it needed to significantly expand the reach of its operations in the reverse mortgage space.
“And with a relationship in place with BNY Mellon, we got our first institutional capital investment from Ellington Financial. This was so important,” Mayer told the magazine. “It meant we had an investment from a publicly-traded company with deep experience investing in HMBS securities. Ellington has a deep understanding of reverse mortgages, especially the capital markets side, and they wanted to learn more about the origination side of the business.”
After a few years, BNY Mellon decided that it wanted to exit the reverse mortgage business. This led Longbridge to seek approval from Ginnie Mae to become an issuer of Home Equity Conversion Mortgage-backed Securities (HMBS), regardless of longstanding common criticisms concerning the difficulty of servicing. Longbridge saw advantages to the servicing side of the business, including the ownership of a serviced loan over a long period of time and the ability to create a deeper relationship with that loan’s borrower.
Still, Longbridge is cognizant of the complications that can arise if a loan is originated for a borrower with minimal financial means, so they can be selective about buying loans that the company believes will ultimately be successful. Servicing, Mayer once said, allows a company a greater degree of control over losses in its portfolio, and as that portfolio grows then it brings greater cash flow with it, which in turn leads to greater stability for the company overall.
In terms of what distinguishes Longbridge from other reverse mortgage loan originators and servicers, the company emphasizes its data-driven approach as one of its most unique attributes. The company also emphasizes in its own promotional materials that a company value they wish to adhere to is integrity, and will avoid making a product recommendation if a loan officer determines that it will have a negative effect on a borrower’s finances.