Leading reverse mortgage lender and servicer Longbridge Financial is launching a new third-party affiliate business designed to support its wholesale and retail channels by identifying and executing on new reverse mortgage origination opportunities.

The lead generation and execution business will be spearheaded by several industry veterans who most recently worked at companies including Reverse Mortgage Funding (RMF) and American Advisors Group (AAG). It will build on established partnerships the company has forged with homebuilders while also providing direct support to the company’s national field sales (NFS) division, which launched last year.

To get a better idea of how it will all shake out, RMD sat down with Adrian Prieto, Longbridge’s SVP of wholesale lending and third-party affiliates.

Origins of the initiative, new leaders for Longbridge

Several industry veterans who have made the jump to Longbridge from RMF and AAG will help to spearhead the new business, including National Purchase & Builder Sales Leader Rob Cooper; Head of Financial Advisor Relations Christian Mills; Director of Product & Strategic Development Larissa Morrell; and Head of Aging in Place Partnerships Kelly Rogers.

Prieto said the initiative has been in the works for some time but accelerated because of the quality of industry talent made available in recent months. Longbridge now feels it has the right distribution network in place.

“Once we started building the National Field Sales channel under Melanie Parks’s leadership in 2022, we increased our efforts to find the right people to lead TPA,” Prieto told RMD in an interview. “Our approach seeks to maximize and intermingle our financial planning, HECM for Purchase (H4P) and aging-in-place initiatives in different ways so that professional advisors and loan originators can be more creative in offering solutions for a wider variety of borrower scenarios.”

Additionally, the company also plans on leveraging its existing distribution channels, including its wholesale division.

Collaboration is key.

“We actively encourage collaboration between all new TPA channel leaders,” he said. “This aligns directly with our culture here at Longbridge. With so many opportunities in the TPA market to explore, having our team join forces and connect the dots is key to our success and new idea generation.”

The talent pool, H4P business

Loads of quality talent became available after RMF declared bankruptcy late last year, Prieto said.

“We took our time identifying the right individuals to lead this initiative,” he told RMD. “In our search, we were fortunate to land experienced channel leaders with vast experience and proven success having led such teams at RMF and AAG.”

With the company looking to expand on its H4P business, the TPA initiative will aim to bolster such opportunities for Longbridge. That’s despite the fact that H4P has been a lagging business source for the reverse mortgage industry in recent years. While H4P has its defenders across the industry, recent data from the Federal Housing Administration (FHA)’s Annual Report to Congress detailed that H4P utilization fell last year, making up only 3.2% of all HECMs in FY 2022 from its 4.17% total in FY 2021.

Still, H4P is described as very important for this channel, Prieto said.

“H4P will be extremely important moving forward for Longbridge,” he said. “Spearheading these efforts is Rob Cooper, who brings a ton of experience along with a specialized purchase team. Rob and his team have seen nearly every H4P scenario imaginable and know how to close these loans on time.”

Beyond H4P’s potential addressable market, the TPA business will also identify opportunities specifically oriented around aging in place services, Prieto explained.

“It’s important to note that while aging in place initiatives sometimes go unnoticed, there is significant potential with home health care and other senior-related products and partnerships,” he said.

Education remains key for Longbridge

Educating loan officers and other partners will continue to be a priority, and will be especially important for this new business since it is appealing to some who may have never engaged with the reverse mortgage business before, Prieto said. This includes materials specifically tailored to the kinds of professionals the TPA business aims to reach.

“We are launching a monthly webinar series for each initiative: the Financial Advisor Forum, the Purchase Hour, and an Aging in Place session,” he said. “We’ll be offering CE credit courses, sales strategies, and marketing initiatives to help our professional advisor network and Longbridge’s retail LOs. Over the last several months, our training department has generated triple-digit attendance numbers for our series of micro-training sessions and webinars.”

For the company, that says that clients are receptive to what the content is saying, Prieto said.

“We believe attendance and overall participation will only continue to increase with our TPA monthly series now added to the mix,” he explained.

In terms of what the wider reverse mortgage industry should take away from this move, Prieto wants fellow industry colleagues to see Longbridge’s commitment to growth, he said.

“In 2020, we committed to further building out our Wholesale channel and have successfully grown that channel and continue to do so,” he said. “Last year, we committed to building out our NFS division, which has already progressed beyond our expectations. Now, we have set our sights on developing TPA in 2023.”

The approach to TPA will be the same as the company seeks to find the right people for the jobs, and will make long-term plans, he said.