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It’s no secret that business has declined in recent years for reverse mortgage lenders. The 26,000 Home Equity Conversion Mortgage (HECM) originations in fiscal year 2025 were less than one-quarter of the peak production rates seen from 2007 to 2009 — and it was the lowest figure since 2003.
John Lunde and Jon McCue think the industry has a distribution problem, and they’re looking to provide a solution by making it easier for forward loan originators to close a reverse mortgage. To that end, their company, Reverse Market Insight (RMI), recently launched a Reverse Qualifier tool that aims to simplify the process for borrowers and originators alike.
“I think that we need to improve distribution. And the largest place that we could make a bigger impact quickly is going after those forward loan officers who don’t look at reverse, for whatever reason that might be,” McCue, RMI’s director of client relations, said during an interview with HousingWire’s Reverse Mortgage Daily at last week’s National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting in Minneapolis.
“One of the reasons is, people keep telling them it’s too hard. They don’t want to have to get into another LOS when they’re probably using Encompass or one of those forward LOSs. They don’t want to have to go into Quantum or send off the referral to see if this [loan scenario] works. It’s just easier to stick with what they know.”
RMI began building the Reverse Qualifier over the past year using some of the same technology that powers its HECM Loan Comparison and Underwriting Tool (HLCUT). It launched to a small group of clients within the past month and the company was looking to raise awareness during the NRMLA event.
Lunde, RMI’s president, said the tool accomplishes two basic tasks: quickly determining whether a borrower qualifies for a specific loan scenario and showing an LO what they’ll get paid.
The tool — which works for new HECM originations, HECM-to-HECM refinances and HECM for Purchase transactions — is in its 1.0 stage and will evolve as the company receives feedback on its usefulness.
“We have a lot of ideas where we think we can go next, but we really want that to be driven by our clients who are using it, the opportunities they see, not just us kind of trying to dream up cool stuff — because it’s only cool to me if our clients can actually get more business out of it,” Lunde said.
McCue said the industry often lacks transparency around pricing, which serves as an impediment for any potential participant. RMI now offers a way to sell to a rate sheet, auction loans through a bidding process and price loans across multiple tiers for HECM Mortgage-Backed Securities (HMBS) issuers.
“If you think about it from a forward [lending] perspective, there’s plenty of pricing calculators that are out there where you throw in some of the loan characteristics,” McCue explained. “It says, ‘OK, based on whatever interest rate you’re picking, here’s what the responsibilities are for the borrower and here’s your commission.’ That’s what we’re trying to get — something that’s more familiar, that forward loan officers are more accustomed to, that we don’t have right now.”
The tool can also assist LOs in myriad ways when it comes to serving borrowers.
As an example, McCue ran a scenario for a borrower in need of $1,000 a month through a HECM line of credit. The tool shows them how long they could access that amount based on their principal limit and the growth of the line of credit. And it accounts for upfront costs like lender fees and mortgage insurance premiums.
“If you’re someone who’s thinking about getting into this space and don’t understand any of this stuff, we can simplify that for you right out of the gate,” McCue said.
HECM endorsements are critical to institutional investors being added to this industry so as a result the HECM endorsement numbers in this article must be addressed. Fiscal year 2024 had about 26,500 HECM endorsements while fiscal year 2025 had about 28,200; those results are respectively the worst and the second worst HECM endorsement results for ANY fiscal year since fiscal year 2003.
If a tenure payout would provide $2,000 per month, why not provide both 1) the maximum tenure payout and 2) a) the tenure payout of $1,000 per month plus b) what the line of credit would be at closing?
As to HECMs, how is distribution alone such a big problem? We are over 86,000 HECM endorsements lower today as of 9/30/2025 than as of 9/30/2009 when there was so little discussed about distribution issues. If supposed HECM consumer protections were less onerous (and, yes, the 10/2/2017 changes were presented as consumer protections) than they were on 9/30/2013, perhaps annual HECM endorsements would have on average exceeded 120,000 per year.
While the software may help with distribution, it does not seem to address adequate training of forward LOs. Since the loss of Wells Fargo, industry wide training has suffered.