CMG Home Loans, the retail lending division of CMG Financial, has its eyes on growing its dedicated reverse mortgage segment. In addition to recently making a key operations hire in an effort to expand its capacity to originate and fund loans, market conditions — including an expanding Home Equity Conversion Mortgage (HECM) for Purchase market — present a unique opportunity for the company.
In this second part of an interview with HousingWire’s Reverse Mortgage Daily (RMD), Sean Kirksey, vice president of reverse mortgage at CMG Home Loans, dives deeper into the ways he hopes to grow his division through new and existing product offerings. He also offers thoughts on retaining clients regardless of their needs.
HECM for Purchase opportunity
Kirksey shared that in addition to the core HECM and proprietary product offerings that the CMG reverse division has, roughly 15% of its overall business is dedicated to HECM for Purchase (H4P).
“We intend to increase that because, as an organization, the majority of our business at CMG is purchase, particularly on the forward side,” Kirksey said.
The desire to expand that side of the business stems from its longstanding “bread and butter,” which is referral relationships with licensed real estate agents, Kirksey explained.
“One of the things I love about the reverse mortgage is that if I have the opportunity to sit down with a real estate office and show them how a reverse mortgage works for a purchase, I know I’ll get a referral,” Kirksey said.
“If I talk to 20 people about this product, I’ll have somebody refer me a loan. But the more we discuss the purchase option, the more people see the significant upside.”
Homebuilder partnerships
From a homebuilder’s perspective, the value proposition of H4P is very evident as long as the product is properly explained, Kirksey said.
“Builders are starting to realize that the real profit margin in new construction is in the upgrades that buyers choose,” he said. “Cash buyers, who are often older, don’t typically spend a lot on upgrades because they want to maximize their purchase price. But when that same buyer is introduced to a reverse mortgage, suddenly they have more financial flexibility and are willing to invest more in upgrades.”
Builders are explaining to CMG that borrowers with reverse mortgages tend to invest in upgrades at higher rates than cash buyers, which makes a reverse mortgage more of an enticing product for new-home specialists, he said. The value that these professionals have identified will lead to an increase in purchase business nationwide, Kirksey believes.
Seeds of growth
Beyond the potential upside of HECM for Purchase as a growth vehicle, the CMG’s reverse division is seeking to grow in other ways, Kirksey said.
“At the end of the day, we believe in this product, and we’ve really assembled a top-notch team to help us continue to grow it,” he said. “With the infrastructure CMG has and the growth we’ve experienced, there’s just so much opportunity for a product like this.”
Kirksey came to CMG primarily for two reasons, he said. First, he was impressed with the ethical standards of the company’s leadership. Second, he said that CMG offers a range of unique mortgage products compared to other players in the market.
Beyond that, CMG aims to adopt a “customers-for-life” strategy, which has also been a stated priority for other forward lenders that have expanded into the reverse mortgage market.
“By adding the reverse mortgage to this suite of products, we are creating a way to support our clients throughout their entire life cycle,” Kirksey explained. “Whether they’re first-time homebuyers, and we’re helping them crowdfund their down payment, or we’re preparing them for a comfortable retirement with a reverse mortgage, we’re there for them at every stage.”
