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M R EP O RT | 35 EXPERT INSIGHTS Anywhere. Anytime. MReport Digital Bringing Today's Lending Headlines into Focus, MReport Digital Puts Mortgage Banking News at Your Fingertips Experts you trust. People you know. News you want. MReport is putting essential mortgage market news at your fingertips with our new digital edition, now available online via your smartphone, tablet, or computer. Enjoy the magazine at your desk, and tap into MReport Digital's easily accessible platform anywhere, anytime. Committed to giving originators, servicers, and all lending professionals access to smarter perspectives, MReport believes it's time to think differently about the mortgage industry. Because the American Dream is evolving . . . are you? Subscribe to MReport and MReport Digital now! Call 800.856.8060 or connect with us online at themreport.com to take advantage of our special introductory offer! digital.themreport.com powered by THEFIVESTARINSTITUTE cial. We have a fee-for-service business called Incenter, and we have a portfolio manage- ment business. This was purposely designed to generate cycle-resistant earnings. When you look at the tailwinds, the reason we like those five business segments is the tailwinds are different. In the forward mortgage business, it's historically low rates and a huge amount of refinances. At least half of the $11 trillion forward mortgage market is eligible for refinance. In the reverse mortgage market, it's differ- ent. It's the aging baby boomer demographic that hasn't saved enough for retirement, wants to age in place, and has a lot of equity in their home. So, we believe, over time, that will increase our reverse business. In the commercial space, we are lending to investors in residential real estate. Because the aging housing stock in the United States is approximately 37 years old, and since baby boomers want to live in or rent something new, there's a huge demand to renovate that housing stock. We are providing the funds to do so through both fix-and-flip loans and long-term financing. Our fee-for-service business is totally uncorrelated. We own a title company, an appraisal company, and a company that does fulfillment for student lending. It's all fee-for-service, and is totally differentiated from the lending businesses. Portfolio management is the fifth, where we are doing our own securitizations and are managing third-party funds. When you think about the way Finance of America Companies structured its busi- ness, it was deliberate, and we looked at the long-term tailwinds that support each of those businesses. M // Obviously, this past year has been about as unpredictable as one we've ever seen. Looking ahead, what do you expect to see changing on the housing market front? I know there's been talk of more origination and less refi. Is that something you're seeing, and what else are you anticipating? COOK // It's really hard to predict three to four months out, and how it might really change from today, but here are the things you're going to be thinking about. With historically low rates, a very accom- modating Fed is likely going to support the financial markets for some period of time. The refi wave will probably continue for a good part of this year. In the longer run, what everybody is also considering is, what does the market look like on the other side of this low-rate, high-refi market? There will be increased household formation due to the pent-up demand coming from millennials looking to buy or rent a single-family home. COVID-19 accelerated this dynamic as more people move to the suburbs. Over the next couple of years, whether you look at Fannie Mae or the Mortgage Bankers Association (MBA), all are predicting an increase in purchase and a decline in refis. In the mortgage market, how long will these good times roll? Each lending com- pany will have a different answer. We think Finance of America Companies is really well-positioned, as we believe our diversified platform will continue to perform well. We love our business model. Editor's Note: a version of this interview originally ran in an episode of the DS5: Inside the Industry webcast. "It's the aging baby boomer demographic that hasn't saved enough for retirement, wants to age in place, and has a lot of equity in their home."