Onity’s Positive Profitability Outlook Driven by Liberty’s Reverse Mortgage Servicing Segment
In a recent earnings call, chief financial officer Sean O’Neil highlighted Liberty’s reverse mortgage servicing segment as a significant contributor to Onity’s positive profitability outlook, despite the challenging rate environment.
O’Neil noted that while reverse servicing was up from the prior quarter, it was lower compared to the previous year. The year-over-year change was attributed to strong asset gains in the first quarter of 2024 and valuation adjustments on buyout loans in the first quarter of 2025. The effective hedge provided by reverse assets, recapture capabilities, and derivatives supported Liberty’s forward mortgage servicing rights in the first quarter.
Leaders also announced the launch of EquityIQ, a revamped version of Liberty’s proprietary reverse mortgage product. This new offering is positioned as a higher margin opportunity with broader market reach, available in both wholesale and consumer-direct channels, with plans for rollout to the correspondent channel in the future.
Onity’s reverse division performance aligns with its consumer-direct and business-to-business channels, as indicated by the originations performance breakdown. While the revenue margin for reverse increased, funded volume experienced a quarterly decrease.
Despite an industrywide decline in reverse mortgage volume, Onity emphasized its role as an integrated reverse originator, servicer, and subservicer platform. The company’s comprehensive approach appeals to correspondent clients seeking end-to-end solutions for production.
EquityIQ is highlighted as a key high-margin product driving Onity’s overall profitability. The successful product rollout underscores the company’s commitment to a diverse portfolio that can withstand economic fluctuations.
While EquityIQ marks Onity’s reentry into the proprietary reverse mortgage market, it is not the company’s first foray in this space. Previous products like Liberty Preferred and the original EquityIQ have shaped Onity’s presence in the market over the years.
As EquityIQ reemerges amidst competition from other top lenders’ proprietary products, Onity remains focused on delivering innovative solutions to meet the evolving needs of reverse mortgage borrowers.