Steve Ranson was working for the securitization group of Scotia
Capital when he met William Turner, the founder of HomEquity
Bank. He was so impressed by Turner’s company and product that he soon found himself in a leadership position at HomEquity
“I met the guy who founded the company, William Turner, when I was pitching him for business,” Ranson says. “He had done some deals, and in my investment banker role, I thought it was an amazing product – the things it does for clients, how it helps them out. One thing led to another, and I ended up joining as chief financial officer, and shortly after became president.”
Eighteen years later, one of Ranson’s main priorities today is the broker channel.
“For us, the mortgage broker channel is fairly new,” he says. “We really have focused on it in the last six to nine months. We have a program where we’re out educating and training brokers on our product, how it works, how clients can use it.”
The bank has seen phenomenal success in its efforts to reach out to brokers. “We certified over 1,300 mortgage brokers since we started this at the beginning of July of last year,” Ranson says. “Part of it was just an education and certification program. The other thing we did was, it used to be fairly cumbersome for brokers to work with us, but we’re on the D+H platform now.”
It’s a far cry from when HomEquity
first started originating through the channel.
“We were getting a lot of brokers calling us anyway. Our broker business was growing 20% to 30% per year; for a couple years it was our fastest-growing channel,” Ranson says. “We thought, if this many people were calling us and it was difficult for them to deal with us, we needed to make it easier. They can now get a reverse mortgage as easily as a first mortgage.”
Ranson has identified the channel as a major contributor to HomEquity
’s success; he’s hoping it will originate $125 million in direct business through the D+H platform in 2016, as well as an additional $50 million through the older process, which allowed brokers with interested clients to refer them directly to the bank, bypassing the required educational course.
“We would work with the clients and pay the brokers a fee,” Ranson says. “In the new process, the brokers are the liaison with the client.”
The reason HomEquity
is targeting the broker channel is because the bank believes it is here to stay.
“The market share numbers have been stable for a number of years now, and as the population ages and more people come into the demographic where they’re buying homes, I think the mortgage broker channel will only grow,” Ranson says. “Older people are the ones who are usually married to their banks.”
Brokers also do a really good job servicing their customers, Ranson adds. “It’s not that our salespeople don’t, but brokers do an excellent job,” he says. “They help clients move through the process relatively quickly. There are more clients in the channel using the money to buy homes, which isn’t what we usually see.”
Going in reverse
is doing what it can to help brokers effectively add reverse mortgages to their pool of offerings for clients.
“We’re doing what we can to support the industry,” Ranson says. “We’re working with the broker houses to make sure they get the right training. For us, it’s a really great channel, and we think brokers do a great job servicing their clients, so it’s important to us that we service this channel.”
Still, Ranson says the bank has its fair share of challenges, especially when it comes to reverse mortgages.
“The product just isn’t very well-known,” e says. “It’s hard for us to overcome the marketing efforts by other institutions for other products. There is this perception that we are the lender of last resort, and we certainly aren’t seeing that in the broker channel. Particularly in that channel, we have a lot of clients who are buying another house. We get people who want to give money to children, grandchildren. There are a lot of things that can be done for income tax management.”
However, there are still some common misconceptions about the product, according to Ranson.
“Some people believe that somehow we end up owning the house, which never happens,” he says. “The clients always own their house. There is no contractual maturity. The mortgage doesn’t come due in five years or whatever; people can stay in their home as long as they want, and the mortgage only comes due when they want to sell. It’s very client-driven. People are actually using it for more interesting and practical reasons.”