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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 40 June 2023 F E A T U R E business. One mistake could put the lender's other businesses at risk. We're talking about a massive investment on the tech side, and that's before you wire up all the new partners, including a source of compliant documentation. It's a heavy lift. There are only a dozen or so lenders in the country large enough to ramp up a de novo reverse business quickly enough to gen- erate a return on an investment like that. Finally, new compliance requirements and a new loan origination system naturally gave rise to a new breed of mortgage profes- sional. The best of these professionals are expensive to recruit, which means the lender would have to start with less experienced personnel, which is always risky. In the past, there were plenty of reasons why lenders backed away from reverse mortgage lending, but those days are now behind us. Why Every Lender Should Consider Reverse Mortgages M ortgage lending is a numbers game. The more volume a lender can capture on its existing infrastructure, the lower their overall cost per loan and the higher their profitability. When volumes fall, lenders will begin to look for new ways to leverage their existing tech stack and staff to originate more business. In the past, this was difficult as origination platforms were designed to meet the specific needs of the majority of lenders, which has traditionally been forward mortgage lenders. Today's next-generation digital lending plat- forms are not architected in the same way. Today's leading LOSs can originate reverse mortgages as easily as they can forward mortgage loans, all on a single stack with a common database to make regulatory reporting and data governance simple. It's a game-changer. Lenders that are already using a modern LOS for forward lending can now easily expand their operations into reverse lending without having to make a major investment in what amounts to an entirely new business just to offer a new product. Providing a mortgage product to meet the needs of every consumer segment instead of just a subset maximizes the lender's ability to compete effectively in the current market. It's a better strategy in the current market and many lenders can implement this strategy on their existing loan origination technology. The economics of reverse mortgage lend- ing may not be quite as favorable today as they were when rates were lower and older homeowners could pull more equity out of their homes, but they still make sense for a wide range of consumers. And, thanks to demographics, there are more reverse mortgage borrowers than ever. Data collected by the U.S. Census Bureau suggests that there will be more than 80 mil- lion Americans 65 or older by 2040. In a market like the one we are living through now, lenders must take business where they can find it, especially if they al- ready have technology that can originate the products. This makes even more sense when you consider that there are more experienced people looking for work now than there have been in years. Continuing to think about reverse mortgage lending as a separate business doesn't make sense in an environment where the hurdles to reverse lending have been removed and the need for additional volume has never been greater. Thinking about these products as just another product that you can sell into the market opens you up to more volume, ad- ditional revenue and connections to older Americans who very likely have children they can refer to the lender for their next loan. It's a simple mind shift that could pay very high dividends. Today's leading LOSs can originate reverse mortgages as easily as they can forward mortgage loans, all on a single stack with a common database to make regulatory reporting and data governance simple. It's a game-changer.