Following on the heels of August's first-of-its-kind $317 million reverse-mortgage securitization issued by Financial Freedom Senior Lending Corp., last week America's Senior Financial Services announced that it had engaged Coast Partners Securities, Inc. to assist with the securitization of the Miami Lakes, Fla.-based company's reverse mortgage loans.
"We are looking forward to working with Coast Partners as we continue to build our reverse mortgage product," said Nelson Locke, chairman of America's Senior Financial Services. "Our alliance with this well-respected firm will allow us to expand our underwriting criteria as well as our correspondent network across the country."
According to a spokesman for the company, this upcoming deal, set for next year, marks the company's first foray into reverse mortgage securitization.
In 1999, America's Senior expects to originate more than $500 million in regular and reverse mortgages and cover 19 states with representatives and/or offices throughout the Northeast, Midwest and Southeast. The company has two dozen dedicated reverse-mortgage specialists in the state of Florida alone.
Coast Partners, based in San Francisco and with offices in Miami, was founded in 1991 and focuses on three primary lines of business: structured finance, investment banking and dealer services. The company has managed or co-managed more than $3 billion worth of securitizations since 1991.
"We will be arranging warehouse lines of credit for their reverse mortgage product as well as advising America's Senior Financial Services in developing a securitization program," said Rick Sleight, president of Coast Partners.
A reverse mortgage, typically available to senior citizens only, occurs when money is paid to a homeowner by a bank, whereupon the collateral is the cash flow the home raises the next time it hits the real estate market. The maturity of a reverse mortgage is then determined by an event such as a move by the homeowner, or more frequently, by the death of the homeowner.
A source close to the reverse mortgage market predicts that in the future, RM deals are likely to grow in volume. "We would anticipate as we see deals in the future, that they would get larger. Any deals going forward would have to have a minimum size, and that is $100 million, given the costs involved."
Unity Mortgage Corp. may be diving into the reverse mortgage securitization arena shortly. The company is currently in talks with Lehman Brothers, according to a source at Unity, and is prepping a debut fourth quarter deal. "We should be rolling one off pretty soon," he explained, adding that the deal looks to be in the $150 million to $200 million range.
"There seems to be a desire for it on Wall Street," he added. -