The HECM Tool — a software platform designed to serve as a reverse mortgage sales conversion tool — announced this week that it has integrated the proprietary reverse mortgage offering from Smartfi Home Loans into the platform’s existing visualization and comparison capabilities.
The platform was developed by reverse mortgage industry veteran Tane Cabe. It’s designed to offer a broader set of comparison options for traditional mortgage brokers and forward loan officers to review reverse mortgage offerings with their clients, according to an announcement issued this week by HECM Tool.
Cabe sat down with HousingWire’s Reverse Mortgage Daily (RMD) to discuss the dynamics of adding a proprietary product into the platform’s set of visualization and conversion tools.
While the existing base of clients are appreciative of the inclusion of the Federal Housing Administration (FHA)-backed Home Equity Conversion Mortgage (HECM), Cabe heard from users that they also wanted a proprietary option included.
Integrating the product
“The challenge with that is there’s so many moving parts,” Cabe said. “[Principal limit factors] change and programs change often, so it’s difficult to tackle that one. So we had conversations with a few different lenders and landed on working with Smartfi, initially, with their Choice Fixed product.”
The fixed-rate product has a maximum loan limit of $4 million, on par with other proprietary offerings in the space. In some states, it has a minimum age qualification of 55 (which rises to 60 and 62 in others). And it has what the company calls an “abbreviated” approval process for condominiums. The product is available in 22 states and the District of Columbia.
The process for the integration is relatively straightforward, Cabe said. If a lender or broker is already signed up with Smartfi and uses the HECM Tool, then the proprietary product is available for visualization and comparison with a traditional HECM loan, he explained.
“They can compare a HECM to a Choice Fixed product, or just a standalone Choice Fixed product to standard reverse mortgages, refinances and purchases,” he said. “The nice thing about Choice Fixed is there’s no real minimum loan amount, so it can go down and compete with the HECM.”
This provides new opportunities for conversion into a proprietary product, Cabe said, while also taking advantage of the visualization tools inherent in the existing software platform.
“We’re incredibly excited to see Choice Fixed now available within the HECM Tool platform,” said Kim Smith, senior vice president of wholesale lending at Smartfi.
“This partnership combines our industry leading Choice product with a game-changing tool for the wholesale channel — demonstrating Smartfi’s commitment to product innovation and making reverse mortgages easy.”
Joshua Evink, the company’s vice president of wholesale, added that the inclusion of this kind of visualization and comparison option is what brokers engaged with the company have been requesting.
It offers brokers an opportunity to more clearly illustrate how a reverse mortgage can work in their financial situation, with additional versatility granted by the proprietary product’s inclusion.
Partnership process, looking ahead
When asked about the process of bringing Smartfi into the fold for the partnership, Cabe said that they became excited about the prospect of having a clear and illustrative tool to compete alongside more “traditional” reverse mortgage offerings.
“The opportunity to make reverse mortgages mainstream lies in having it be a normal product — one that makes sense for a standard, traditional forward loan officer to present to a borrower 55, 60 or 62 and over,” he said.
“To do that really easily, and to be able to bridge that gap of understanding from forward to reverse, that’s what the HECM Tool does really well.”
As for the future, Cabe said he’s in conversations with other industry players about broader integration of their products into the HECM Tool. But there have also been moves to more clearly demonstrate the educational capability of the product itself.
“One of the things we did in the first quarter is we had major training for our users,” he said. “We did a 12-week accelerator program focusing in on how we get business from past clients using the HECM Tool and its illustrations, and how to convert that business using scripting and different things. Not only with borrower prospects but referral partners and then also focusing on financial advisers.”
Cabe is hopeful that as the industry better embraces technology, the use of platforms like the HECM Tool can make a difference in pushing reverse mortgages into more mainstream financial services conversations.
“When lenders — including big forward shops that offer reverse — can change and alter their sales process, and have those forward loan officers easily embrace and bridge that gap from forward to reverse, that’s where I think the business can really take off and impact retirees, and change the way retirement is done in America,” he said.
