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RMS Has 2,500 Loan Reverse Portfolio
By Ted Cornwell
In today's market, not many specialty finance companies are experiencing growth in their portfolios. Most are just holding onto their lifelines, hoping to ride out a difficult market.
Not Reverse Mortgage Solutions, a reverse mortgage servicer, subservicer, technology and consulting firm that has boarded 2,500 loans onto its servicing platform since the company was founded in March.
Reverse mortgage lending, it turns out, is poised for growth as 78 million members of the baby-boom generation begin to reach the age of eligibility for reverse mortgage loans next year.
Already, Federal Housing Administration-insured Home Equity Conversion Mortgage lending grew by 77% in fiscal 2006. That growth is expected to continue when 2007 numbers are tallied. And the increasing popularity of reverse mortgages is luring lenders and private firms in to the business, so that private reverse mortgage lending is likely to take hold along side the FHA HECM program.
That growth helped the company obtain another $4 million in funding from JAM Equity Partners. JAM and its affiliates committed $7 million to RMS earlier this year to fund the company's entry into the reverse mortgage sector.
"We are really pleased with our speed out of the gate," said RMS chief executive Bob Yeary in a news release. "This latest funding installment will be invested in a further expansion of company services, will shore up our balance sheet - to facilitate partnering with major Wall Street investors and larger banks on subservicing - and deepen our technology capabilities."
Mr. Yeary founded RMS with two other mortgage industry veterans, Ken Austin, who now serves as president of RMS, and Marc Helm, chief operating officer. Together, the management team has more than 100 years of collective mortgage banking and servicing experience.
The company's initial product offering, the RM Navigator system, is developed from the ground up and capable of handling the unique reporting and cash distribution characteristics required in the servicing of reverse mortgages, according to Mr. Yeary.
That allows the company to focus on its major thrust today, which is identifying originators and investors who want to own some of the servicing or need their products serviced or subserviced, Mr. Yeary said.
"Our ability to provide client firms with 'private label,' subservicing contributes to the overall growth of the reverse mortgage sector," he said.
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