This week, Mortgage Cadence announced that it had appointed longtime reverse mortgage industry professional George Morales to serve on its sales team. The company is aiming to bring more reverse mortgage technology solutions to potential partners already in the industry and those that have yet to enter it.
To understand the dynamics of his new role, RMD sat down with Morales to learn more about his individual and company goals, including the potential for a large national bank to become involved in the reverse mortgage business for the first time since the early 2010s.
Editor’s note: This Q&A has been edited and condensed for clarity.
Chris Clow/RMD: Tell me about the new role and what you’re going to be doing at Mortgage Cadence from now on.
George Morales: My new role is really designed to bring reverse mortgage insights and perspectives to the company. They already have some pretty key people here already who’ve been in reverse for a while, but they needed to broaden and expand that. So, the new role is going from the product management side to the sales side of the business. It’s an interesting role, because I feel like the opportunity for me is to be a “door-opener,” if you will.
I’m standing in a place where I’ve got all this reverse experience, but I’ve also got a lot of forward experience, [having] been in the mortgage industry since 1999. The reverse experience is particularly interesting right now, because we’re seeing traditional forward mortgage companies really starting to come around on the reverse product a little more than we’ve seen in a while. And so for me, I feel like it’s an opportunity to kind of open the door via technology, to how and what is happening in the reverse space.
Clow: What kinds of companies have you, or will you in the future, be talking about reverse operations with?
Morales: We’re in some talks with reverse-only companies that are out there, who are starting to look into expanding into the forward world. That one’s a little more unusual, since we’re normally used to having people “kick the tires” of the reverse business. The whole idea is to just broaden distribution.
I’m part of the Mortgage Bankers Association (MBA) MISMO work group for reverse, where we’re working on creating some MISMO standards that will apply to reverse. Again, the same goal is to broaden distribution of the reverse mortgage products to anybody who wants it out there. That means that data can be exchanged within technology that’s usable in both forward and reverse. That would be pretty cool to be able to see that data transmitted.
Mortgage Cadence is a great spot for me because it provides that platform where you can do forward and reverse on the exact same tech stack. You don’t really need a forward LOS and then a separate reverse LOS to do both; you can do it all in one space.
There’s a reason that we haven’t gone past that 2% penetration rate in the reverse mortgage industry, and part of that is because we tend to huddle in [with ourselves]. And all these endeavors that I get to be a part of are a lot about cracking that open, inviting the forward lender community into the space, while at the same time providing the reverse folks another outlet into the forward space.
Clow: Does tech provide more of an ability to do that?
Morales: Technology has been a cool way to have those discussions. I can’t say whom yet, but we’re in very, very early stages [of discussion] with a large U.S. national bank, a large bank [that is considering entering] reverse. We’re very early on, but the key for them is to be able to originate [the mortgages] that they do already, and then add reverse without having to make reverse a separate business, per se.
They were looking at making reverse a product that they want to integrate, and how do you do that? You’ve got to have the right technology partner, which I think is why our discussions have gotten off the ground. That would be a big benefit for the reverse industry to have a national banking brand’s marketing, advertising and reach. Talk about broader distribution —that’s going to really help, and hopefully that could invite other big banks and IMBs to get back into reverse as well.
My role as a salesperson is interesting. Sales is an interesting word because my goal at the company is obviously to get some new deals — that’s the bottom line. But in doing that, it’s a lot about having the reverse side and the forward side, liaising between the two in that conversation, and getting us to finally broaden that reach that we haven’t been able to in reverse for a while.
Clow: Getting a big bank involved again would certainly be a seismic development in the reverse mortgage business. Was this entity previously active in the business before?
Morales: No. It would be brand-new blood and brand-new investment. The macroeconomic situation is starting to shift slowly, so that’s signaling to some folks [that they may want to consider] reinvestment. Technology is one spot, but [they may want to] reinvest in different products (e.g., reverse) as well.
Currently, we’re the LOS system of record for Finance of America Reverse (FAR)/American Advisors Group (AAG), the largest reverse lender in the U.S. A large percentage of all reverse mortgages are currently on our platform, so that helps the new players to understand that if they’re going to enter into a new market, this being reverse, and especially a big bank that may have a lot of concerns about information security, they want to make sure that we already know what we’re doing in both forward and reverse.