The reverse mortgage industry has gone through an enormous amount of changes in just a short period of time. New rules and regulations have been leaving originators puzzled as to how they could generate more originations at a faster pace. Unfortunately, they do not see a bright future ahead in 2018.
"New reverse mortgage rules that reduce principal limits have originators anticipating a decline in profits," according to Reverse Mortgage Daily.
"Many expect that fewer consumers will qualify for the loans — and for the loans they do close, they expect to make less money per loan than before."
In turn, the report claims originators are looking to solve the problem by increasing their workload. They want to increase lead generation and hopefully close more loans.
“I essentially need to get four or five more loans per year to match my profitability. Given my closing ratio, that means I’ll probably need to have three or four more leads per month,” said Bob Tranchell of the Federal Savings Bank in Mass., according to the report.
Overall, Tranchell told RMD that the changes aren't much of a bad thing for reverse mortgages as a product. He believes it makes for a more competitive product.
For more on the future of reverse mortgage loan originations, click on the image above.