Increasing broker channel referrals are an important driver of reverse mortgage growth, according to HomeEquity Bank, now announcing an 18 per cent increase in originations for the third quarter.
“The boost was brought about in particular by the increased awareness in the market of our solutions partly due to our channel partners,” said Greg Bandler, SVP for HOMEQ. “I would definitely say that reverse mortgages are becoming more popular in Canada.”
Indeed. The lender behind the CHIP reverse mortgage plan saw originations in Q3 climb to $65 million. The company’s overall mortgage portfolio grew 13 per cent to $1.3 billion.
Bandler isn’t specifying exactly how much of that new growth in originations is attributable to the channel, instead saying only that “business from brokers grew proportionately to our overall growth.”
In recent months, a growing number of mortgage professionals have been adding reverse mortgages referrals to their offerings in efforts to diversify revenue streams in the wake of a slowing market.
Coming off an 18 per cent slip in origination in Q2 this year, HOMEQ began introducing some promotional campaigns aimed at attracting more business from brokers. For instance, last week, the bank sweetened the pot for brokers by waiving the sign-up fee of $795 on its five-year reverse mortgage product.
The bank is also looking forward to a substantial capital infusion following the Ministry of Finance’s approval in November 8 of the $138 million acquisition of HOMEQ by Birch Hill Equity Partners.
Although Bandler says interest in growing in the channel, the reverse mortgage market is typically not an area served by the channel. Bandler said brokers make up 30 per cent of HOMEQ’s business while 70 per cent of origination comes from banking and financial partners as well as independent referrers.
“We don’t do business with HOMEQ and we never have, but maybe we should,” said Jim Tourloukis, the independent mortgage broker –owner at Advent Mortgage in Unionville, Ont. “It’s just that at this time we don’t target the same clients.”
Tourloukis and other brokers said they will probably consider HOMEQ if the bank offered other products apart from reverse mortgages.