Mutual of Omaha rebrands reverse mortgage for purchase loan

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Mutual of Omaha Mortgage’s reverse mortgage division announced this week that it is rebranding its consumer-facing home equity conversion (HECM) to purchase (H4P) mortgage option to illustrate more clearly the most common expected result of such a loan for a borrower.

Mutual of Omaha will now refer to its H4P loan product as its “lifestyle home loan,” which will only apply to the company’s consumer-facing materials, the company said.

“The rebranding aims to align the product with the outcome it offers retirees when purchasing their next retirement home,” the company said in an announcement of the rebranding initiative. “This rebranding does not change any aspect of the HECM program and will only be used for marketing purposes.”

The HECM program is administered by the Federal Housing Administration (FHA), and H4P loans are a subset of the broader HECM program. No lender has the authority to alter the operation of the HECM program. Mutual of Omaha therefore aims instead to communicate the capabilities of the type of loan through its own branding initiative.

“This loan program is still largely unknown to retirees looking to meet their housing needs,” said Chris Kargacos, executive vice president of national sales at Mutual of Omaha Mortgage. “Our goal is to help educate homeowners across the country about their options when buying a home, while helping them maintain or improve their lifestyle in retirement or on a fixed income. We believe the Lifestyle Home Loan brand will help us achieve this goal.

While H4P has its strong advocates within the reverse mortgage industry, nationwide adoption of the product has remained in the single digits in terms of overall market penetration for years. According to data compiled by Reverse Market Insight (RMI), the total share of H4P volume in the entire reverse mortgage industry was only 4.2% of all mentions in 2021.

However, this data also indicated that among H4P providers, Mutual of Omaha recorded more than 12.5% ​​of its volume as coming from H4P loans, notably exceeding the industry average.

In early 2021, Mutual of Omaha launched a mobile app (or app) specifically designed to serve potential reverse mortgage borrowers looking for a HECM or H4P transaction.

The app offers tools to help a potential borrower get started with a reverse mortgage, including an app the customer can start, a mechanism to capture and upload documents, “loan milestone” notifications informing borrowers and/or realtors from transaction processes, and a chat function enabling communication between the customer and the agent or loan officer.

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