property preservation company MCS The company announced last month that it had acquired Yahoo! Co., Ltd. and entered the reverse mortgage business. Five Brothers Asset Management Solution. In part 1 of his RMD interview with MCS CEO Craig Torrance, he explained his interest in reversing his company's space.
In the second half of the interview, Torrance digs deeper into the value proposition of being in the reverse mortgage business. How companies like his might be able to simplify certain necessary property obligations. Learn more about what the company inherits from Five Brothers in terms of knowledgeable talent and industry inverse relationships.
Editor's note: This interview has been edited and condensed for clarity and readability.
Chris Clow/RMD: What do you hope the industry can do to provide more or better information about how MCS continues to operate in the reverse mortgage space?
Craig Torrance: I think [we] Of course, we'll hopefully get lenders to think about what this relationship will look like going forward and identify what else they can do to help people in this area. In general, as we marshal our resources and understand what we can do as an industry, how can we create services that reverse mortgage holders can take advantage of and say, “I need a job?” I think there will be more ideas like this. . I need someone to mow the grass. ”
Often, some of these services are managed by families. That means seniors are taking out reverse mortgages and children are figuring out how to keep their mother's home. Professionalize it and give people peace of mind knowing that the person doing this work in their mom's home is from a solid, reputable company, and that the lender, the servicer, and everyone else has a stake in it. If we can make it possible, it will probably be a benefit to the community as a whole.
Crowe: It is my understanding that Five Brothers was a member of the National Reverse Mortgage Lenders Association (NRMLA). Will MCS continue its membership?
Torrance: yes. We got everything from the business. And we're going to continue our team there. They brought a lot of industry expertise and the business was huge, a 50-year-old business. They spent a lot of time in this space, where he, on the contrary, had a lot of people with 20-25 years of experience. Part of the deal was to bring all of that expertise into MCS and continue it.
So we really want to be active in the opposite field, be participants in the industry, join the conversation and share what we think we can do to help. I hope everyone will raise their hands.
Crowe: How do you assess the competitive environment in this particular segment of the reverse business?
Torrance: We do not see any companies that directly compete with us. We have direct competitors in certain areas, such as asset protection in forwarding. Single Family Rental (SFR) Service Centers have competitors. In other words, there are fewer competitors. But the important thing for us is that when you put it all together, no company can do everything that we can do. That's why we are happy with this business model.
By adding reverse, all these reverse companies can withdraw funds from commercial operations, single-family rental operations, and forward mortgage operations. That ultimately means we have more vendors, better technology, and tools than our competitors. So while we have individual competitors in certain segments, we have no overall competitors, making us somewhat unique.
Crow: HousingWire is read by people across the industry, from loan originators to lender and servicer executives to government officials. Is there anything special I need to know about MCS going into reverse?
Torrance: I think the key message that I want to reiterate is the conversation about the workforce in the United States and how the cost of performing this type of maintenance work has accelerated in recent years. What we discovered is that this is ultimately a fee-based business. When we perform some of these basic types of maintenance services, there are limits to how much you can charge for them.
What's happened is that we've seen vendors pull out of this space, so we're getting to the point where they would rather work in that space. Amazon It's more profitable than mowing a defaulted reverse mortgage property.So what we've seen is people are shying away from this segment and these areas. FHA-backed property. MCS is currently trying to solve this problem by offering more work to vendors through reverse, forward, commercial, and SFR.
Crowe: Is there anything we're not talking about that you think people should know about the entrance to this space?
Torrance: The only thing I'd like to add is that Five Brothers has built a technology platform that can actually do the reverse process very well. When it comes to technology, people say you can build anything. After all, it's just 1's and 0's. While that is true to some extent, the reality is that it is difficult to build a platform for reverse mortgage processing services.
It is difficult to build a service platform, and the service platform used by reverse people is different from forward. So, if you think about it, what they've actually done over the last 20 to 30 years is create a process flow, adapt that process to a very sophisticated technology engine, and now they can reverse the process. This means that we have made it very easy to execute. It's transparent and can unlock a lot of efficiency and ultimately achieve compliance and provide great service through there.
That was very important to me. Technology needs to unlock this. Five Brothers probably has the best wealth preservation platform for reverses in this space. We have that platform now and we will continue to invest in that platform and only accelerate it over the next few years.