The reverse mortgage industry in 2025 could be defined by two key developments: continuing efforts to establish partnerships with the forward mortgage industry, as well as the development of proprietary reverse mortgage products that could be the “future” of the industry.
This is according to an interview with James Mittleman, senior vice president of retail sales at Finance of America (FOA). As the company remains bullish about the prospects of its “HomeSafe” suite of proprietary products — with particular attention to its closed-end “HomeSafe Second,” that area of the business is seen as one with a lot of potential, he said.
Forward partnerships
When asked about how he views the evolution of the reverse mortgage industry’s partnerships with the forward side, Mittleman said that continued evolution of these arrangements should “only help” the industry push ahead.
“In all the time I’ve been in this industry, the adoption and the acceptance of this product comes from having a broader market, speaking to our customers and showing them that there’s many different options they can look at,” he said.
Customers often have preferences for having multiple options, and while the competitive landscape across the industry is fierce, that competition ultimately helps customers understand that options are available to them, he said.
“Yes, it’s a competitive landscape,” he said. “But the more people who can have success within it, and tap into this customer base to create adoption, I think it helps all of us.”
Part of that is because the industry has gotten smaller, particularly since Mittleman first entered it in 2007. That fiscal year, annual Home Equity Conversion Mortgage (HECM) production stood at over 107,000 loans. By FY 2024, that number had dwindled to roughly 26,500. But the availability of wider distribution, potentially through these partnerships, is a welcome development, he said.
“With these new folks entering the space, I think it’ll actually create more customers to potentially inquire [about reverse mortgages] who may not have previously,” Mittleman said.
Proprietary products
FOA has been a leading player in the proprietary reverse mortgage space for some time, despite fierce — and growing — competition in the space. But this is largely a positive development, Mittleman said, because more industry participants are recognizing the potential path forward with their own product offerings.
“I think proprietary products are the future of this industry,” he said. “There’s been consistent regulatory and government changes that have caused the HECM program to be more difficult to achieve in the customer base. I’d like to see some softening there, but I think the proprietary products really help fill in certain gaps.”
Customers, Mittleman said, should have access to a product that operates similarly to a HECM, and he said that the industry and FOA in particular has trained its attention on identifying underserved elements of the market and fashioning products based on those findings.
“[We’re looking at] where the market is underserved with customers who may not be able to achieve a standard loan in the HECM space, and asking how a product can be developed or provided to the customer that still allows them similar, if not the same, output,” he said.
This has been an exciting development for him to watch, he said, since the industry and company’s capacity for innovation has been visible in these areas, he said. Running into instances in which a customer might not qualify for a HECM are one such factor that proprietary products might have the chance to compensate for, he said.
Closed-end second product
“HomeSafe Second is an example,” he said. “There have been proprietary products that function similar to a HECM that might work with larger loan amounts. HomeSafe Second can allow a customer who is happy with the current loan that they have, or has other aspirations for their equity, and it’s giving them an alternative to the standard reverse mortgage thought process.”
This opens up avenues for new conversations with borrowers, he said, and how it can impact their financial planning steps while also comparing it directly with other options, including other reverse mortgages. That product was very interesting to him, he said, and the company is pleased with its trajectory.
“It’s only growing month over month and year over year, as there’s more customers that we’re finding that can benefit from it,” he said.
HomeSafe Second was first introduced in 2018, marking the industry’s first-ever second-lien reverse mortgage option. However, the product was suspended in 2020 due to economic volatility caused by the COVID-19 pandemic. After nearly three years, FOA reintroduced the product in early 2023, turning it into a major focus of its proprietary business.
In October, the company lowered the interest rate on the loan and expanded its availability to four new states. After the addition of the new states, HomeSafe Second is available in Arizona, California, Colorado, Connecticut, Florida, Nevada, Oregon, South Carolina, Texas and Utah.
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