Longbridge’s Melissa Macerato on new proprietary product impact

The Peak variation has updated seasoning requirements for Platinum-to-Platinum and proprietary-to-Platinum refinances to 24 months from one closing date to the next.

One potential benefit is for partners to reconnect with borrowers who may have fallen short to close prior to the product’s introduction. To gain insight into the potential impact, HousingWire‘s Reverse Mortgage Daily (RMD) interviewed Melissa Macerato, chief revenue and marketing officer at Longbridge Financial.

Addressing a need

When discussing the need for this product variation, Macerato highlighted the impact of the interest rate environment on the new offering.

“We have observed an increasing number of borrowers who were unable to secure a reverse mortgage as interest rates rose, a segment of borrowers that lenders were unable to assist with the existing Platinum and Home Equity Conversion Mortgage (HECM) products,” she said. “We have also seen borrowers paying significant upfront costs to refinance their loan for relatively small amounts of proceeds.”

Ensuring borrowers receive maximum upfront proceeds was a key priority, she stated.

“Identifying these gaps was essential in driving the creation of Platinum Peak, a product tailored to address those specific needs,” she explained.

With today’s borrowers likely more cost-conscious due to prolonged higher rates and economic uncertainty, Macerato emphasized the importance of meeting the needs “beyond our existing offerings” with Platinum Peak.

“Whether a borrower seeks the lowest rate, lowest upfront cost, or maximum proceeds, our Platinum suite of products offers something for everyone,” she noted. “We aim to ensure our partners can assist as many borrowers as possible in achieving their retirement financial goals.”

Reconnecting with short to close, younger borrowers

In its announcement, the company mentioned that partners will have increased flexibility to reach out to potential clients who may have previously fallen short to close. Macerato believes that with Peak, the company can now assist a “significant portion” of these borrowers who faced challenges in the past.

“Internally, we discovered over $500 million in loans that fell short to close in our wholesale and retail divisions,” she revealed. “We are guiding our wholesale partners and loan officers to review their lead pipelines and assess the opportunity to revisit and assist borrowers they couldn’t previously help. We are collaborating with our partners to identify loans in the pipeline that could benefit from the new product.”

The company also noted that Peak could offer opportunities for younger borrowers aged 62 to 70, as higher loan proceeds could yield specific benefits for this demographic. Macerato elaborated on this concept.

“With higher interest rates, available LTVs have decreased, posing a challenge for younger borrowers,” she said. “The average age of reverse mortgage borrowers has risen in recent years, reducing the potential benefits for retirees.”

She explained that a persistent criticism of the HECM program is that higher upfront costs negatively impact the amount of proceeds accessible to borrowers.

“This prompted us to maximize LTVs in Platinum Peak for everyone, particularly younger borrowers,” Macerato clarified. “The increased LTVs enable lenders to serve a wider market, offering greater financial flexibility at an earlier life stage.

“This can be especially advantageous for younger individuals planning long-term financial goals such as investments, major purchases, or early retirement planning.”

Platinum Peak is now accessible in at least two reverse mortgage loan origination systems (LOS) for brokers, as per the company’s statement.