Lender Name: Reverse Mortgage Funding LLC
Headquarters: 1455 Broad Street 2nd Flr. Bloomfield, NJ 07003
States licensed: 49 states and the District of Columbia, excluding Hawaii
Company leadership: President David Peskin, Founder and CEO Craig M. Corn.
Product offerings: HECM, proprietary reverse mortgages
Lender ranking: #3, based on January 2020 HECM endorsement data.
Brief history: The brainchild of several finance and reverse mortgage industry executives, Reverse Mortgage Funding, LLC (RMF) began in earnest in August of 2013, and was initially led by former MetLife executives Craig Corn, Robert Sivori and Mike Mooney. Also included were industry veterans David Peskin and St. John Bannon, and right out of the gate, the company counted 30 employees while maintaining ambitious plans to grow its reverse mortgage business.
In the very early going of its existence, RMF gained approval to purchase closed loans from correspondents in 46 states and the District of Columbia, and shared its plans to build a wholesale reverse mortgage business by the end of the 2013 calendar year. By 2018, RMF became America’s number one Home Equity Conversion Mortgage (HECM) Backed Securities (HMBS) issuer.
While the company came into existence during a time in which the federal government was gaining additional authority in order to make adjustments to the way the product worked under the purview of the Federal Housing Administration (FHA), RMF nonetheless remained optimistic about the opportunities present in the marketplace at the time that it entered the reverse mortgage space.
“I don’t think we’ve ever been more excited about the space,” said RMF President David Peskin at the time to industry news publication Reverse Mortgage Daily. “We have a collective management team coming together to build a business around what we have envisioned for years. We are building a platform that gives us a competitive advantage and we are designing the business around those [government] changes.”
While the company didn’t wish to elaborate on the source of its investments, RMF leadership was very clear that it retained total control over the new company’s activities. While most certainly making waves upon its founding in 2013, that would ultimately be just the beginning of the moves that RMF would make over the course of the next several years.
By the end of 2013, RMF made significant hires in the industry to continue filling out the team in order to more readily facilitate its expansion efforts. By 2014, RMF made news in the New York Times concerning $230 million in new financing, which sparked rumors of a possible public offering at some point in the future. Over the course of its first full year in existence, RMF introduced a wide variety of HECM reverse mortgage product options including a monthly adjustable-rate HECM, as well as a fixed rated, closed-end product.
By 2014, RMF significantly expanded its retail reverse mortgage operations, hiring nearly 50 new agents for its network by the end of that year. In 2015, RMF’s HECM products received an official endorsement from the American Bankers Association (ABA), backed by a comprehensive due diligence litmus test. In order to receive the endorsement, RMF’s HECM offerings had to be analyzed by industry experts, field-tested by bankers and follow stringent customer service standards, according to criteria available on the ABA’s website.
By 2016, RMF had grown into one of the top reverse mortgage lenders in the country. Speaking again with Reverse Mortgage Daily, David Peskin credited previous experience the leadership team had cultivated in running other, large organizations, and the people brought into the fold to help build the company out.
“Because of our experience in running other large organizations, it made it easier for us when we started the company,” he said. “We have been through the right way to grow a company; we learned from the past. It starts with bringing all of the right people around you. We were fortunate to bring back talented people and put a game plan in place. It wasn’t like we were truly starting from scratch in the industry.”
Like the majority of the reverse mortgage industry, however, RMF was not immune to a series of major HECM program changes handed down by FHA and the U.S. Department of Housing and Urban Development (HUD) in October, 2017. To improve the performance of the reverse mortgage book of business inside the federal government’s Mutual Mortgage Insurance Fund (MMIF), HUD and FHA made serious cuts to reverse mortgage principal limit factors (PLFs) and would go on to introduce a collateral risk assessment, which sometimes required a property to receive a second value appraisal before a reverse mortgage could be approved on it.
These actions by the government severely impacted the reverse mortgage business, but one of the ways that some lenders have chosen to overcome the new challenges put in place by the government has been in the creation of new, private reverse mortgage offerings that have no tie to the federal government at all. While not a new concept by 2018, the larger industry began to more actively pivot in the direction of creating new private products, and RMF launched their “Equity Edge” private reverse mortgage in May of 2018.
“We were always going to introduce our own proprietary product, but [government program changes] kind of had us shift gears a little bit faster than we thought we would,” Peskin told Reverse Mortgage Daily when Equity Edge was first introduced.
RMF would go on to introduce Equity Elite, a new variation of its private reverse mortgage offerings, and would continue to refine it including by offering a lower rate of 4.99% in 2019. In December of 2019, it was announced that RMF’s parent company had been acquired by an affiliate of Starwood Capital Group, a global private investment firm which is focused on real estate investments, and which maintains more than $60 billion of assets under management.
“The management team is very excited about this partnership, and we are looking forward to turning our energy towards growing RMF into the clear industry leader and market innovator we pride ourselves on being,” Peskin told Reverse Mortgage Daily.