For some time now, companies like Fiserv and Fidelity have been preaching that one mortgage loan servicing platform can handle multiple loan types. I'm convinced that with today's business rules engines that is correct. But reverse mortgages are a different animal altogether.
Today, Reverse Mortgage Solutions, Inc. (RMS), Houston, announced that it will begin offering a new servicing technology specifically for reverse mortgages, thanks to an $7 million investment by JAM Equity Partners, LLC. The new tool is called RM Navigator™ and is reportedly capable of handling the unique reporting and cash distribution characteristics required in the servicing of reverse mortgages.
The company’s founders include: Bob Yeary, Chief Executive Officer; Ken Austin, President; and Marc Helm, Chief Operating Officer. Together, the management team has more than 100 years of collective mortgage banking and servicing experience.
Federally insured reverse mortgages grew by 77 percent in fiscal year 2006, according to the National Reverse Mortgage Lenders Association, which should surprise no one who knows anything about demographics. The Federal Housing Administration insured 76,351 Home Equity Conversion Mortgages in fiscal 2006 (ended Sept. 30), compared with 43,131 the year before.
It's smart to roll out technology in areas where the business is growing and likely to continue to do so. The reverse mortgage business is likely to continue growing for some time. If the software helps servicers do a better job of handling these deals, the company could be well positioned for success.
In addition to the tool, the company plans to offer specialty servicing capabilities for forward mortgages, which executives hope will be in high demand as the mortgage industry begins to suffer from high defaults and losses. The demand is likely to be there, but default servicing is a very specialized field. There was no information in the company's announcement to tell us what experience the executive team has in this area.