Want to know the secret to market growth? Kristen Sieffert, President of Finance of America, shares her insights on how to bring home equity for retirement into the mainstream. Discover the highlights and opportunities in focusing on reverse mortgages.
Kristen discusses the power of a shared company vision, team curation, and the importance of capital markets. Find out why merging company cultures can be more complex than expected, and the significance of M&A in their growth strategy. Learn how focusing on a specific demographic can drive success!
#ReverseMortgage #HomeEquity #FinanceOfAmerica #MortgageIndustry
Kristen discusses the power of a shared company vision, team curation, and the importance of capital markets. Find out why merging company cultures can be more complex than expected, and the significance of M&A in their growth strategy. Learn how focusing on a specific demographic can drive success!
#ReverseMortgage #HomeEquity #FinanceOfAmerica #MortgageIndustry
Category
đź—ž
NewsTranscript
00:00While we love market share, we want to grow the market, right?
00:03That is the biggest thing that's our main focus,
00:06is how do we take this category and get it into that mainstream position?
00:17Welcome to Powerhouse, where we interview the biggest names in housing
00:21and ask them about their strategy for growth.
00:24I'm Diego Sanchez, president of Housing Wire,
00:27and my guest today is a special one.
00:29It's Kristen Seifert, president of Finance of America.
00:32Kristen, it's so great to have you on the show.
00:34I'm so happy to be here, Diego.
00:36Thank you for having me.
00:38So really excited about our conversation today.
00:41You're now three years into this focus on reverse mortgage at Finance of America.
00:49What have been the highlights and the lowlights of this focus?
00:53Three years.
00:54That's a long time.
00:55It's kind of flown by.
00:57It's interesting.
00:58I would say from a highlight perspective, having the focus and really this kind of shared mission
01:07and vision amongst the entire team is so powerful.
01:10I mean, you know you lead a company.
01:12When you have a shared mission, it just paves the way for a lot of great innovation, ideas,
01:19collaboration across the company.
01:21And, you know, without that focus, it's sometimes hard to know how to prioritize things, you know, what's most important on any given day.
01:30So that focus has been a real blessing, I think, for the company.
01:36I think generally the team that we've curated is just second to none.
01:42I couldn't be more thrilled for the team that we get to work with.
01:45I mean, from everybody within the kind of operating company to our board of directors, which really has been elevated recently to help us on our mission and towards our cause.
01:56And then on top of that, like, we just have the best capital markets team, I think, ever in reverse mortgages.
02:04And so we've really been able to do things because we have all of these really smart people focused on the same thing.
02:12You know, before this pivot, we had all of this talent, but everybody was kind of doing 10 different things all the time.
02:18So now with all of the focus shared, it just we're starting to have breakthrough moments a lot more often and doing things I just don't think we would have done in the past.
02:29So those are highlights.
02:31Obviously, the difference that we get to make for the clients that we serve, the impact that we get to make and just seeing that every day is just such a great thing as a leader, right?
02:44That our team gets to make an impact for people in really meaningful ways.
02:48And so that's another thing that everybody really believes deeply in.
02:53Lowlights, you know, we like to call them opportunities more so than lowlights.
02:59I would say over the past three years, you know, merging the different cultures was a lot harder than I expected.
03:07I love leadership.
03:09I love culture.
03:10I love building teams.
03:11I didn't realize like the complexity, especially being virtual, bringing disparate cultures together and, you know, really getting everybody from operating kind of in their silos of where they came from to know where this one company and we've got this shared mission.
03:32It's so great to be on the other side of that.
03:35That was just a lot harder than I expected, and it took a bit longer than I expected.
03:40You know, our team had been together for a very long time.
03:44And so while most of our team was virtual, even before the pandemic, you know, many of us had worked together for a decade.
03:50So we've seen each other.
03:52We've built those relationships.
03:53We've gone through the stresses together.
03:55But then, you know, acquiring AAG, merging our holding company in, everybody just had a kind of a different way of working.
04:04And so, you know, getting us all on the same page was a necessary part of the process, and it took a bit longer.
04:13What other challenges?
04:14I think there was just a lot of foundational items that aren't like the things you necessarily want to work on but have to be worked on.
04:21And so, you know, a lot of the time was spent getting our foundation stronger so that we could really get to the point where we can do things to achieve that breakthrough velocity.
04:32And I think we've really set ourselves up for that and are looking forward to 2026 because of it.
04:37So it's super interesting, and I appreciate you being so candid.
04:41The AAG acquisition seems like a very important part of your journey and your strategy for growth.
04:51Does M&A continue to be top of mind for you, or you're like, I've had enough of that.
04:56Let's focus on what we've got right now.
04:59You know, I think M&A is definitely in our DNA.
05:02And so if there are opportunities out there that make sense, we always want to take a look at them.
05:08So, you know, there's always stuff that we want to look at, and I think if it helps our mission and makes it helps us get to our mission and our goals of, like, really bringing home equity for retirement into the mainstream more realistic, then absolutely we would be interested.
05:28So it's always, I would say that's an always-on conversation.
05:35But at the same time, our industry is really small.
05:38So, right, the opportunity can be limited.
05:41Right.
05:41So I imagine that, you know, focus on M&A would have to be like a home equity and reverse mortgage focus, right?
05:50Like you're not going back to doing forward mortgages again.
05:53Yeah, so this time I think the focus is anything that really makes sense with the demographic that we're serving.
06:00And obviously doing right now, we've learned that having less distractions is better to help us do the things that we want to do easier, right?
06:09But I think over time, 100%, the first and biggest focus would be within our space, in our category.
06:17But I think that we're always asking ourselves, are there ancillary, like, services or things that should be part of our ecosystem to serve our demographic that makes sense?
06:27And it may not be M&A.
06:29Maybe it's partnerships or things like that.
06:31But, yeah, we are 100% committed to this demographic and home equity for retirement.
06:37So we're always looking at things now through that lens.
06:41We'll talk more about partnerships later in the conversation.
06:44But you've brought up mission probably four or five times now.
06:48What is the mission of Finance of America?
06:52So, you know, we believe strongly that we can help people thrive and have a more joyful retirement.
07:00And, you know, when you think about all of the kind of macro factors impacting what retirements are going to look like, I mean, you're kind of starting to see it right now.
07:10But think 10, 20 years down the line.
07:13Home equity has to be part of the conversation, right?
07:16Pensions are pretty much gone.
07:19You look at people's retirement savings.
07:22We've been really fortunate that the stock markets performed so well.
07:25But that's not always the case.
07:27And many people just aren't invested in the stock market.
07:30So it's almost like you have this tale of two cities, right, where you see all the headlines that things are amazing and your 401k assets are growing like crazy.
07:39But there's a huge subset of Americans that don't have much in their 401k savings.
07:45So when you're thinking that you might make it or get by on just Social Security and a limited 401k, that's probably not going to help you make ends meet for, you know, it would be one thing if retirement was five, ten years.
08:00But what we're seeing is retirement is a lot longer than what people actually plan for.
08:05And there's a lot of unexpected things that come up that people also don't plan for.
08:10And the interesting thing, even with the labor market, is we're seeing a lot of people forced into retirement before they thought they'd need to be in retirement.
08:18Right. And so if that accelerates, you know, what are people's options and home equity is a for people 60 and over is a 14 trillion dollar asset.
08:28So, you know, I think it's just a matter of time as we continue to educate people on the power of home equity, how to use it responsibly, sustainably, which is really important, right, because the industry has done a ton of work over the last decade to, you know, move itself out of this kind of negative headline cycle into something that people are seeing as a positive strategy that can help them live the retirement that they want to live.
08:53I feel like you just stated the thesis for why HousingWire bought reverse mortgage daily four and a half years ago, you know, that reverse mortgages would become a mainstream and common part of retirement planning.
09:09I don't think we're there just yet.
09:11What do you think that that timing looks like where financial advisors, wealth managers are just recommending it as a regular part of retirement planning?
09:22Yeah, we have a lot of work to do still. And I think the biggest kind of gap is education, right?
09:27The question we ask ourselves daily is how do we educate people at scale?
09:32And, you know, I think about even little things like HousingWire bought reverse mortgage daily, but the reverse mortgage daily content is still in this RMD ecosystem.
09:42So the people that we need to break through to traditional loan officers, mortgage bankers, financial advisors, et cetera, but on the mortgage side, the traditional folks may not even be seeing the stuff going on in reverse because I think you have to have a separate subscription maybe to get that content, right?
10:03So it's like, how do we bring these things together so that this is just, you got, you know, HousingWire talks about cash out refinances or new home purchases or whatever it may be.
10:15How does reverse be part of that main part of the conversation and not a side conversation?
10:21I mean, that's one piece of it.
10:23We just have to do a better job, too, of getting the word out there from a PR standpoint.
10:29Now that we're a public company, you know, we're really figuring out how do we get an even an investor relations story stronger out there?
10:37Because when you look again at all of the stats and the macro influences, I mean, it's just such an incredible opportunity for so many people.
10:47Um, and education really is the biggest barrier for people being open to even considering the product because there's still a lot of misconceptions.
10:58Yeah.
10:59And like, it seems like HousingWire might have some education work to do as well.
11:03It is not a separate subscription.
11:05Okay, good.
11:06It is a separate newsletter to get reverse mortgage content, but we do try to integrate reverse mortgage content into other newsletters as well.
11:14Uh, so yeah, no, I agree that education is, is tremendously important and, you know, getting in touch with, uh, the forward mortgage, uh, loan originator and branch manager and production leader seems like a huge part of this.
11:30Do you think it's possible for a forward LO to add reverse to their product set or does reverse require specialist LOs?
11:41I mean, there's a lot of different schools of thought on that topic and then there's just a lot of nuances too.
11:46I would say absolutely traditional loan officers should understand reverse mortgages well enough to have the conversation, right?
11:54It's a disservice to your, to your client base.
11:57Um, there's just such a big opportunity there.
11:59So I think every, uh, loan officer should understand how it works, whether or not it's them that actually does the origination and the processing and the handholding, or they hand it off to, uh, you know, a more expert person on their team.
12:14There are nuances and challenges because of, um, you know, how you pay your loan officers and you can't pay differently per product.
12:22And so a lot of companies have challenges because the compensation structures can be vastly different on reverse and forward.
12:29So a lot of times they take a step back and say, well, we actually need it to be handled over here.
12:34These people can be paid X.
12:36These people need to be paid Y.
12:38So that's just part of the challenge that we've got to figure out and work through.
12:44Um, it's interesting too.
12:46I mean, you know, we've launched our second lean reverse product and that product is one that we think has so much potential and it's one that I would love to get more originators talking to their clients about because, um, we're making some improvements to that product this week to raise the LTVs by 5% across the board on that product.
13:08And we recently reduced the interest rates on that product.
13:11So if you look at, if you're 55 or older and you're considering a HELOC, for example, when you look at the stats, there's a huge percentage of people that are being denied for HELOCs because of their debt to income, right?
13:25If you can't afford another payment, they're not going to give you the loan.
13:28Um, and then even the people that can afford it, if they saw our product next to a HELOC and said, oh, I could get almost the same rate and I can get access to the funds I need.
13:42And my payment in theory is optional, right?
13:45If I want to make a payment like a traditional HELOC, there's, there's no penalty in doing so.
13:50And if I don't want to make a payment, then I don't have to.
13:53I mean, it just seems like such an elegant solution for people.
13:57And then it also paves the way for a number of people to qualify that, um, in the, with the traditional HELOC couldn't, we're working with a client right now.
14:05And we looked at their, uh, HELOC denials for the last six months.
14:10And I think the number was, uh, 45% of those denials qualified for our product, right?
14:18That's huge.
14:19The people that were age qualified, that quote cohort.
14:22So I just think it's such an untapped opportunity.
14:25We're starting to work with some of the larger servicers, um, to talk to them about how do we use this product to help their portfolio of borrowers.
14:36But I really think it's an opportunity for the originators to stay front, you know, front and center with their borrowers, because it should be them that comes to them with these types of solutions.
14:46Well, especially in a low origination market, you need opportunity like this.
14:53It's interesting because we always said, like, if the traditional mortgage space ever calms down, we think, you know, loan originators will want to learn more about this product.
15:03And it actually hasn't happened to the scale that we thought.
15:07And so that's kind of like what we want to figure out is what it, what is, why is that?
15:12And how can we help, help change that?
15:16Yeah.
15:16I would guess that some of it is, is partnering with, uh, forward mortgage, uh, originators and servicers.
15:22It sounds like you, you partner with, partner with as well.
15:24How do you set up partnerships with forward mortgage companies?
15:29You know, we have thrived in wholesale, um, since our inception.
15:34I mean, we really started as a wholesale, uh, reverse mortgage lender.
15:37And so that is such a core part of our kind of skillset and where, where we really perform well.
15:46Um, and right now it's what we're seeing.
15:50And what I love seeing is you've got these bigger companies that are starting to hire specific leaders to come in and help their reverse mortgage efforts.
15:58So you look at companies like CCM or rate, right?
16:02They've all brought in kind of reverse mortgage executives that came from our space that can now help educate within the company.
16:10Cause you know, while people say they want to do it, it, there is a learning curve.
16:15There are things that are going to happen day to day.
16:17And us as an outsider, it's hard to kind of keep the foot on the gas sometimes when different things are coming in and out of the system.
16:25So what we've seen the most success is these companies that are bringing on executives, making it a pillar of their strategy, right?
16:32Because it really does need to come from the top.
16:35We've had a great success grassroots loan officers want to offer this.
16:38They work for whatever company and you know, they, they do that book of business.
16:43But when the leaders of these bigger companies say like, this should be part of what we offer, we want to offer customers solutions from the time they buy their first house till the time, you know, where that they can't do loans anymore.
16:59This needs to be part of that dialogue.
17:01And so it's really exciting to see these bigger companies starting to invest in that way.
17:06Cause I think that's going to make the biggest difference as far as how we support them.
17:09I mean, we have so much material education, you know, we'd be on their doorstep tomorrow if they wanted us to be.
17:16So, you know, I think that that piece is the easy piece for us once the interest is there.
17:21Well, we do have a lot of IMB executives in the audience for powerhouse.
17:27What's the best way for them to get in touch with you and your team to talk more about a partnership?
17:34I mean, I are, I don't know if I'm sure we have a wholesale email that I could share, but I don't know what it is offhand.
17:41But if you go to our website, foa.com, there's a partner option there and that'll bring you into the ecosystem.
17:48But, you know, John Scarpatti is our chief production officer.
17:51He knows most of the people out in that space.
17:54I mean, we want nothing more than to support people if they want to be on this journey with us.
18:00Perfect.
18:01All right.
18:01So Housing Wire recently reported that proprietary reverse mortgages were up to 40% of reverse origination in September.
18:12And so that's been climbing for a while now.
18:14What is happening with proprietary products to trigger that growth?
18:20You know, it's been an interesting dynamic in the rising rate environment, right?
18:23The reverse category isn't as impacted by rising rates as traditional mortgages because there isn't a payment.
18:30But the LTV does get impacted on the HECM side, the government product side.
18:36As the interest rate climbs, that LTV declines.
18:40The other dynamic with the HECM product is borrowers are paying a 2% MIP, mortgage insurance premium, to the government on their loans.
18:49And that mortgage insurance 2% fee is tied to your home value, basically, your max claim amount.
18:56And so, you know, as we've seen home prices stay pretty steady and then the LTVs are coming down a bit, it's kind of a big fee for borrowers to swallow sometimes to pay that MIP when, like, the proceeds to them is less.
19:13So I think that's taken a little bit of a toll on the HECM side, and I think that will just naturally correct over time as rates kind of stabilize.
19:23At the same time, there's just been a lot of innovation on the proprietary side.
19:27There's a lot more flavors of proprietary products.
19:30And then the biggest factor is proprietary products mostly are built for that more jumbo-sized home value.
19:38So the balances on those loans are just going to naturally be bigger than the balances on a government loan.
19:44And so I think that plays a part in it as well.
19:47And now, I mean, I think most of the big lenders in our space are offering some flavor of a proprietary product.
19:53We rolled out our home-safe suite, gosh, I think, like, five or six years before anyone else was doing it.
20:00But now that more people are offering products, it's just more easily available across the category.
20:08And are your proprietary products just available to your sales team, or do you wholesale them as well?
20:14Oh, definitely everybody.
20:17And, yeah, our wholesale channel is so critical when it comes to our proprietary products.
20:23And we've recently introduced a way for those partners to white-label the solutions, right?
20:31So if they want to offer these products under their company name, under, you know, not our home-safe brand, they now have the ability to do so.
20:41And I think that'll be a big game-changer as well, because if you are a bigger IMB, right, you don't want to go out and sell Finance of America's home-safe product.
20:52Do you want to sell CCMs, whatever you want to call it, product, right?
20:56And so having that white-label option available, I think, is a huge lift for some of these larger companies asking if it makes sense to offer those products or not.
21:08And then I think the biggest thing, again, just going back to our home-safe second product, there's so much opportunity there.
21:15We, again, think that the opportunity for our wholesale partners there is much greater than we've seen so far.
21:22And I really think the opportunity is for those folks that actually haven't adopted reverse yet, because it's just a lot of people looking at ways to access their home equity.
21:33And I think this is the most elegant solution in the marketplace.
21:36And is that home-safe second, is that for 65 plus, 60 plus, 55 plus?
21:4255 plus.
21:43Okay.
21:44Yeah.
21:44So you're expanding that age range a little bit.
21:47Yeah.
21:48Yeah.
21:48And that's the product where I mentioned that we're lifting the LTVs 5% across the board this week, which is a really big change.
21:54And, I mean, you can get our products at the same cost as some of the very mainstream HELOC products out in the market today.
22:01So, you know, I think there's a lot of compelling reasons to give that product a look.
22:06So HousingWare also recently reported on a partnership between Finances of America and Better Mortgage.
22:13Can you tell us more about that partnership?
22:15Yeah, we're really excited.
22:16I mean, when we ask the question, like, how do we get greater adoption and greater awareness, right?
22:22There is this education component, but there's also a technology component where, you know, people sell what they know, but they also sell what's in their systems and borrowers buy what's in front of them.
22:35And so with Better, we just thought it made so much sense because, you know, as they're expanding their, like, technology offering, right, as more people start using the Tin Man platform to originate loans, to originate HELOCs, the ideal outcome is that if a borrower goes online and wants to get a HELOC,
22:56they put in their information and if they're age qualified, then they see a traditional HELOC, the traditional HELOC loan, and a reverse mortgage HELOC option, right?
23:06Like, that should just be all in one place.
23:09Why does a borrower have to know, oh, I need to go look over here for this other option?
23:14And so we really believe deeply that if a borrower was able to see all three options next to each other, and then choose which one is best for them, many times it would be the one that doesn't require a payment that's priced very similarly to the ones that do.
23:29And so this opportunity with Better just made a lot of sense from us because we think that access piece is really a limiting factor in scaling the category.
23:39So we're in the very early stages of that relationship, and, you know, the industry's never really succeeded in getting our products in big forward platforms.
23:51So I think this will be a huge test case for us, and we expect to see a really big lift once those products are all in the same engine.
24:00Yeah, I would imagine a very compelling case study can come out of this once people are able to actually see those products side by side.
24:07All right, so there are, unfortunately, very few women in C-suite roles at large mortgage lenders like Finance of America.
24:20What was your path to the C-suite, and how do we get more women on that path?
24:28Yeah, I mean, that's a great question.
24:29My path seems like very accidental, and then just also very lucky in a sense.
24:37You know, when I graduated college, I had no thoughts about entering the reverse mortgage industry.
24:43One of my best friends from high school landed at a company called Financial Freedom, which was later purchased by IndyMac.
24:50And she's like, come work here with me for the summer while you figure out what you want to do.
24:54And I thought maybe I'd go to law school.
24:56You know, I didn't know what I was going to do at that point in life.
24:59So I took her up on the offer.
25:01I went to work there, and it's a really niche industry.
25:05And so, you know, she and I both were able to climb the ladder pretty quickly.
25:09And the interesting thing about that time was my grandfather, who had been my biggest mentor, he just didn't like the reverse mortgage category at all.
25:18So he was not supportive of this career choice.
25:22But as I started to climb the ladder, and once I reached a certain point, I realized a lot of the things that were wrong with the industry were in our control to fix.
25:30And so that kind of became a mission that I had.
25:33Like, how do we make this better?
25:34How do we take someone like my grandfather and turn him into a believer?
25:38Because there's so much good that can come from this product and from this category if done the right way.
25:44So that, I think, having that kind of, like, mission-driven piece within me, just it kind of felt like I was on a track that was – I don't know.
25:57It just felt very aligned to being able to make an impact.
26:01I've always told people, like, if you want to climb the ladder, always do more than you're paid for, right?
26:07Don't wait to be paid more and then do the more.
26:10Just, like, do the more.
26:11And I've been fortunate that, for me, that's worked out.
26:14It obviously doesn't always work out.
26:16And there have been moments in my career where, you know, I wonder, would I have gotten to a different place at a different point, you know, under different circumstances?
26:27I don't know.
26:27I think – I just – I feel very grateful.
26:30I've worked for a lot of men that never saw my gender, and I am really grateful for that.
26:38And, you know, I think when you care about leading a team, when you care about building a good company that's a sustainable company, and, you know, when you do so in a way that, you know, people can rally around, that's just a really big key to that success.
26:56How do we get more women?
26:57It's – you know, that's a great question.
27:00I – I – it's hard to break through the ranks, you know, and –
27:07Well, it sounds like, you know, do more than your job description.
27:11Yes.
27:13Sounds like really good advice.
27:16Solve – fix problems.
27:17I mean, fixing problems is tremendously important.
27:20And then, you know, you probably need to interview your potential managers as much as they're interviewing you to understand what they're like in terms of giving people opportunity.
27:33Right.
27:33Like, are you at a place where that next step is possible for you?
27:36And I think the other piece, which really has played a huge part in my career growth, is every time something's gotten really hard and it would be really easy to walk away or to blame somebody, I go do work, right?
27:49Whether it be a solo meditation retreat for a week or hiring a personal coach, every year there is some sort of work I do on me personally because ultimately it comes down to me and how I show up.
28:03And so, I just think that investing in yourself has to be a priority.
28:08It just has to be something that you're willing to do.
28:11And every time I feel like pointing the finger, it's like, okay, look in the mirror and see how you could have handled this differently because I can't control what anyone else is doing, but I absolutely can control how I'm reacting, how I'm responding, how I'm showing up, how I'm leading the team through, you know, a stressful moment.
28:29And so, I think that's just a really critical part for not just women, for anyone that wants to climb the ranks.
28:37Yeah, I love that.
28:38All right.
28:38So, let's wrap with growth strategy.
28:42How are you thinking about growth and taking market share in 2026 and beyond?
28:48Yeah, I mean, for us, it's not really, well, we love market share.
28:52We want to grow the market, right?
28:53That is the biggest thing that's our main focus is how do we take this category and get it into that mainstream position that you and I talked about earlier.
29:02We've got a lot of different strategies that are kind of in the works for 2026, ways that we think that we can do that.
29:09Then, in concert with that, we're really focused on getting people educated on the power of the HomeSafe second lien product, right?
29:20Like, getting the traditional mortgage folks to offer this product as part of the conversations they're having daily, having larger servicers, mid-sized servicers, use this as a portfolio retention strategy.
29:32So, those, you know, those are a lot of blocking and tackling things, but I really think for our industry, our category to do what it can do, we've got to break through the mainstream dialogue.
29:44It's going to come down to, you know, different ways of marketing, different investments on the PR side, and those things we're really, really excited about going into 2026.
29:54So, growing the pie, it's all about education and promoting yourself and promoting these great products and helping them live side-by-side with Ford Mortgage products.
30:07Yes, absolutely.
30:09Well, Kristen, thank you so much for joining me today. I think this has been a wonderful conversation.
30:15Thanks for having me, Diego, and I hope to be back soon.
Be the first to comment