On Tuesday the Senior Lending Network, also known as World Alliance Financial Corp., announced that it would no longer be accepting new reverse mortgage loan applications. The decision comes down from World Alliance Financial Corp.’s parent company, KBC Group, based in Belgium. KBC Group has been hard hit in the recent economic downturn, and, with the recent repurchase of Equity Key by its founders, appears to be seeking to shed its US holdings. Both World Alliance Financial Corp. and KBC Group have announced their diligence in finding a buyer or capital partner, but if they don’t, KBC Group has said it will begin to wind down World Alliance Financial Corp’s operations.
This move is destined to have ramifications throughout the industry considering that World Alliance Financial Corp. has endorsed 2,892 HECMs thus far this year, making it the fourth largest lender and holding a significant market share, around 3.4% of the market. As a result, it will be very interesting to see which lenders pick up both Senior Lending Network’s former customers and their former leads. Next month’s HECM volume report is likely to paint a different picture from what many in the industry have grown accustomed to over the past few months.