Brokers are hoping news the $138 million purchase of the country’s largest reverse mortgage provider will lead to new product develop aimed at the mortgage broker channel.
“That transaction has been going on for a while, I’m glad it’s moving forward,” said Jim Tourloukis, independent mortgage broker at Advent Mortgage in Unionville, Ont. “We’ve got to see how this will translate in what offerings HOMEQ provides the channel.”
On November 8, Birch Hill Equity Partners announced that the Ministry of Finance had approved its acquisition of HOMEQ. Shareholders of the reverse mortgage specialist agreed to the purchase offer in May this year.
Like many brokers who do not focus on reverse mortgages – including HOMEQ’s CHIP plan – Tourloukis has had no contact with the lender. Still, he’s not opposed to opening a relationship.
“We don’t do business with HOMEQ and we never have, but maybe we should,” he said. “It’s just that at this time we don’t target the same clients.”
Other mortgage professionals share Tourloukis’ sentiments.
“HOMEQ operates mainly in a very niche market that not many brokers focus on,” Joe Walsh, a broker with The Mortgage Centre - Mortgage Professionals Inc, told MortgageBrokerNews. “Will they use the incoming money to develop other products that will cater to a wider channel market?”
With more than $2 billion in capital under its management, Birch Hill is seen as a boon for HOMEQ’s future channel plans.
“We believe that Birch Hill is an excellent fit for HOMEQ, enabling us to address our expanding liquidity and capital needs,” said Steven Ranson, president and CEO of the bank.
In recent months HOMEQ had made a series of moves to attract more business from the channel.
For example, for a promotion earlier this year the lender slashed the 4.95 per cent interest on its one-year term to 4.25 per cent. This month, HOMEQ waived the $795 sign-up fee on its five-year reverse mortgage.
Birch Hill and HOMEQ expect to conclude the acquisition on or before November 30 this year.
It is anticipated that the acquisition will close on or before November 30, 2012.