Celink turns into HUD’s official reverse mortgage subservicer
Celink has taken over as the subservicer for HECM mortgages assigned to the Department of Housing and Urban Development after winning the contract earlier this spring.
HUD notified the National Reverse Mortgage Lenders Association on Monday that Celink had officially stepped in as the contractor for the home equity conversion mortgages it held. All mail and correspondence related to HECM servicing is now being directed to Celink’s new servicing operations center in Tulsa, Oklahoma.
HECM servicing is frequently assigned to HUD when the disbursed loan reaches a high amount in relation to the original value or maximum claim. Celink, which is headquartered in Lansing, Michigan, takes on subservicing responsibilities previously held by Novad Management Consulting since 2014.
The total contract is valued at just over $169 million with a one-year base “period of performance,” followed by options for four annual renewals, according to the General Services Administration.
HUD awarded the contract to Celink in March, which was welcomed by NRMLA at the time.
“NRMLA has long advocated for a change to the HECM contract subservicer, and we are pleased this loan administration will be assumed by a team of subject matter experts with state-of-the-art HECM servicing technology,” said President Steve Irwin in a press statement.
Novad lodged a protest against the initial decision, which was dismissed in June by the U.S. Government Accountability Office.
The HUD contract was the second major feather in the cap this year for Celink, who is the nation’s leading reverse mortgage subservicer. In February, Fairway Independent Mortgage also assigned Celink to service reverse mortgages it originated.
But the latest news comes at a time of heightened disruption within reverse-mortgage businesses, who are fighting many of the same headwinds facing the industry at large. In November, Reverse Mortgage Funding, the country’s fifth most active HECM lender so far in 2022, laid off over 400 staff members and suspended new originations before filing for bankruptcy. The company is currently in the process of selling its mortgage-servicing portfolio to Longbridge Financial, according to Reverse Mortgage Daily.
Earlier this month, Finance of America Reverse announced it was buying the nation’s leading reverse mortgage originator, American Advisors Group, in a $10 million cash deal. AAG had over 25% of the nation’s market share, far outpacing its competitors, including Finance of America Reverse. Plano, Texas-based FOA discontinued all forward-lending operations this year to concentrate on more specialized products, including reverse and home improvement loans.
The industry saw a total of 3,272 new HECM endorsements in November, representing a 34% drop from the same month last year, according to Reverse Market Insight.