Longbridge has identified a growing opportunity in proprietary loans for borrowers who cannot access sufficient funds through HECMs (Home Equity Conversion Mortgages). Due to a lack of updates by the FHA on HECM programs, including the impact of interest rates, borrowers seeking additional funds for purposes like purchasing a second home might benefit from considering Longbridge's Platinum program. While HECMs remain generally preferable, especially in terms of lower interest rates, the proprietary loans could become more significant in Longbridge's operations going forward, enhanced by improved securitization strategies and streamlined underwriting processes.
Given where the proprietary market is at the moment, Longbridge has identified an opportunity for such borrowers to consider Platinum over a traditional HECM if their situation fits.
Mayer credits the combination of better execution on our securitizations for proprietary loans and the lack of changes by the FHA to combine into proprietary products likely becoming a more meaningful part of our business.
I think this is going to substantially open up the credit box and volume for proprietary reverse and for our Platinum program, but it's far from the last thing we have coming down the pike.
For most people, a HECM is still a better product, even with the higher IMIP, because the interest rates on proprietary loans are much higher than they are for a HECM.
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