George Morales on proprietary reverse mortgages and MISMO standards

George Morales, chief revenue officer of B.E. Home Finance and chair of MISMO’s Reverse Mortgage Development Workgroup, told HousingWire’s Reverse Mortgage Daily that proprietary and portfolio reverse mortgages now account for roughly half of all reverse‑mortgage originations in the United States, including a growing share of second‑lien products. He explained that these non‑HECM loans are gaining traction because they let seniors tap home equity without disturbing an existing low‑rate first mortgage, offering optional‑payment structures similar to a senior‑focused HELOC. Morales highlighted that the Mortgage Industry Standards Maintenance Organization (MISMO) is nearing 75 % completion on a set of secondary‑market standards designed to smooth data exchange across origination, secondary‑market and servicing channels, a move intended to reduce technology friction for lenders and brokers.

The shift toward proprietary products is being driven by lenders’ desire to expand loan pipelines amid a favorable interest‑rate environment. Morales described a “crawl, walk, run” progression: forward‑mortgage firms initially partner with established reverse‑mortgage lenders as brokers, then may evolve into correspondent or hybrid relationships that allow them to close and fund loans under their own name before selling them to investors such as Finance of America or Mutual of Omaha. This incremental approach gives traditional lenders time to build confidence in the expanding suite of reverse‑mortgage offerings, including second‑lien and hybrid reverse‑forward products that resemble senior HELOCs, thereby broadening the market for equity‑release solutions.

Standardizing reverse‑mortgage data through MISMO’s near‑complete framework is expected to accelerate adoption by making the process more efficient for all participants. By aligning origination, secondary‑market, and servicing data, the standards aim to lower operational costs and simplify technology integration, which could attract additional forward‑mortgage institutions into the reverse‑mortgage space. As equity lending overall rises in the U.S., the industry’s ability to offer flexible, second‑lien options may meet growing consumer demand while providing lenders with new revenue streams, positioning proprietary reverse mortgages as a significant and enduring segment of the market.

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