Longbridge’s Melissa Macerato on the impact of new proprietary product

The Peak variation also updated seasoning requirements for Platinum-to-Platinum and proprietary-to-Platinum refinances to 24 months from one closing date to the next.

Another potential benefit is for partners to reengage with borrowers who may have been short to close prior to the product’s introduction. To get a better idea of the potential impact, HousingWire’s Reverse Mortgage Daily (RMD) sat down with Melissa Macerato, chief revenue and marketing officer at Longbridge Financial.

Addressing a need

When asked about the need for this kind of a product variation, Macerato immediately identified the interest rate environment as a factor in the new offering.

“We have been seeing more and more borrowers who are not able to get a reverse mortgage as interest rates were rising, a segment of borrowers that lenders have not been able to serve with the existing Platinum and Home Equity Conversion Mortgage (HECM) products,” she said. “We have also seen more borrowers who have been paying a lot of money up front to refinance their loan for relatively small amounts of proceeds.”

Melissa Macerato

Finding a way to give borrowers as much as possible in upfront proceeds was a priority, she explained.

“Identifying these gaps was crucial in prompting the creation of Platinum Peak, a product designed to address those specific needs,” she said.

But today’s borrowers are likely more cost-conscious, since rates have remained higher for longer and uncertainty is prevailing in many parts of the economy.

When asked about this, Macerato said that catering to those who have needs “beyond our existing offerings” was a priority for establishing Platinum Peak.

“Now, whether a borrower is looking for the lowest rate, the lowest upfront cost or the maximum possible proceeds, our Platinum suite of products has something available for everyone,” she said. “We want to be sure that our partners can help as many borrowers as possible to achieve their financial goals in retirement.”

Reconnecting with short to close, younger borrowers

In the announcement, the company specifically said that its partners will have more flexibility to reach out to potential clients who may have been short to close in the past. With Peak, Macerato said the company believes it can now help a “sizable portion” of these borrowers who may have had trouble in the past.

“Internally, we found that there were over $500 million of loans that were short to close in our wholesale and retail divisions,” she said. “We are helping our wholesale partners and loan officers to look at their lead pipelines and evaluate the opportunity to go back and help borrowers who they weren’t previously able to help. And we are working with our partners to help identify loans in the pipeline that could benefit from the new product.”

The company also stated that Peak could provide an opportunity for younger borrowers between the ages of 62 and 70, since a higher amount of loan proceeds has the potential to translate into benefits specific to that cohort. Macerato expanded on this idea.

“With higher interest rates, available LTVs have fallen, and this impact has been particularly challenging for younger borrowers,” she said. “The average age of borrowers taking out reverse mortgages has increased in the last few years, reducing the potential benefits of reverse mortgages for retirees.”

Part of this, she said, stems from a longstanding criticism of the HECM program that higher upfront costs interact negatively with the amount of proceeds a borrower can access.

“This led us to push the LTVs in Platinum Peak as high as possible for everyone, but especially for younger borrowers,” Macerato explained. “The increased LTVs enable lenders to serve a broader market, providing greater financial flexibility at an earlier stage in life.

“This can be particularly advantageous for younger individuals who are planning long-term financial goals, such as investments, major purchases, or even early retirement planning.”

Platinum Peak is now available in at least two reverse mortgage loan origination systems (LOS) for brokers, according to the company.