Reverse mortgage insights, according to an industry CEO

Why this economist bet big on seniors' home equity

April 29, 2025 12:34 PM

Christopher Mayer has navigated a career that has seen him serve as a self-described policy wonk and Ivy League professor, managing to apply his collected knowledge into his role as a mortgage CEO today.

With a doctorate in economics, the leader of reverse mortgage lender Longbridge Financial started his career to "make the world a better place" through research and policy, later realizing the business world could help him achieve the same goal.

Prior to joining the lender in the early days of its launch over a decade ago, Mayer worked at the Federal Reserve of Boston, before becoming a faculty member at The Wharton School of the University of Pennsylvania and later, Columbia University, where he still occasionally teaches classes.

Today, he leads operations at Longbridge, which merged with real estate investment trust Ellington Financial in 2022. During his tenure, the company has turned into a leading issuer of government-backed home equity conversion mortgages, with a growing number of proprietary reverse products for older Americans in its portfolio as well.

In a recent interview with National Mortgage News, Mayer discussed the importance of making HECMs and other reverse products available, the opportunities and challenges of serving older homeowners and ways his academic experience has helped Longbridge develop risk mitigation and market strategy.

The conversation, including Mayer's comments and questions asked, has been edited for clarity and length.

What do you think the business prospects are specifically for the reverse mortgage market given where home equity levels sit currently?

Mayer: The amount of home equity owned by seniors is a really, really big number, but for me, the issue about the size of the market is kind of beside the point. It's really the penetration of the market as it exists.

We think the mortgage industry should be thinking about the question, how do we adequately serve this demographic?

A third of all homes in the United States are owned by people 65 and older, and it's going to continue going up, because people are buying homes later. Once they own a home, they generally don't go from being a homeowner to a renter later in life. People are living longer, baby boomers get older; all those metrics suggest it's a growing market.

We don't do a very good job in the mortgage industry serving older Americans. That's really the problem we see and that our company is built to address: how to help people feel comfortable and responsibly use home equity in retirement.

That's the goal, which, by the way, doesn't always mean we will always be about reverse mortgages, but it does mean what we care about are products that we think are responsible products for seniors.

What are barriers in getting consumers to look into these products?

Mayer: Misconceptions create a role in people thinking that a reverse mortgage is not an appropriate product for them.

For us, it's important that we have people feel comfortable about the product and the people who they trust understand the product.

Our view is that when somebody who's 65 comes to a mortgage lender, they reached out to the mortgage lender because the mortgage lender is actually an expert in mortgage products. The loan officer should actually talk to the person about a reverse mortgage in the same way that if a first-time home buyer called up and said I want to get a mortgage, you wouldn't just show them a 30-year fixed conventional loan. If you had a first-time home buyer program that offered them advantages, you would show them that product.

When customers approach you or your loan officers, how aware are they of all the nuances? Reverse mortgages can be complicated products.

Mayer: Most people have basic misperceptions. Literally, the word "mortgage" means you're borrowing money. So you can start with, "No, we don't want to own your home." I promise you, as a lender, no one wants to own your home.

But I would say a lot of people start asking me questions about the product. "I heard blank, I wanted to know X." That's sort of more the reaction I get. I think for a lot of people, it's more a question of curiosity and wanting to know a little more.

We recognize that people are going to need some handholding. Our job is truly about having a customer for life.

What are you hearing from clients regarding all the recent economic developments like concerns about a possible recession, changes to Social Security?

Mayer: When the stock market's going down — all of these things in the paper — create additional anxiety for older Americans and people who are at or near retirement age, and that's why it's hard for people in a time of economic uncertainty.

Historically, times of uncertainty and distress have been times of growth for the industry. And I say historically because I think a large number of people would benefit from reverse mortgages during most economic times.

For example, the HECM world hit its peak in 2009, so there's definitely a countercyclical nature to the product. And when there are times that consumers are more uncertain, those tend to be times when relying on home equity as a buffer is helpful.

I don't want our product to sell because things in the world are going to pot, and reverse mortgages are the only choice. We've long ago learned that you do not sell something to somebody by saying you have no choice but to take it.

You sell a product by helping people understand what it really does and helping them recognize the value of the product through good times and through bad times. it should be a product that provides opportunities for people, over time, to have a better retirement.

But I'll mention other kinds of uncertainty they should also be worried about. What about climate uncertainty? We had people whose homes burned in the LA Fire. Even if your home's burned and you have a HECM, you can actually draw on the line of credit. You're facing rising insurance costs, which is true around the country. Having a line of credit that you can use to help pay for rising homeowners insurance costs is a big advantage. So it's not only the economic uncertainty.

How aware of reverse mortgages are lenders who work with you on the wholesale side? Do they need training?

Mayer: The answer is everybody needs training, but reverse mortgages are relatively more complex than average. That's often used as a critique.

They require a level of education of the loan officer. You do want somebody who's willing to spend the time in the handholding

I think many of the complexities of the reverse mortgage are actually highly consumer friendly. When you look at the proprietary market, it's a much simpler product.

But you can't get something that has as many consumer-friendly features as a HECM. That idea of a line of credit that grows as long as you live in the home and meet the terms of the loan as long as that is — it is complicated, but that is a consumer friendly feature that is hugely valuable.

We're going to be continuing to launch more and more things that I think are really exciting products that are not available in an FHA-insured HECM. But the HECM is a unique product that nobody would really re-create. I am a big fan of that as a product people should always look at and do a comparison, even somebody who's looking at a proprietary product, and ask the question: Does the HECM really solve the problem I have as well?

What is investor interest like for your products?

Mayer: If you want to invest your money and you're looking for long duration, reverse mortgages have a place as an investment asset in that mix.

If you look at the UK, 36% of all mortgages to people 55 and older are equity release. Three of the five largest publicly traded insurance companies are in the business. The reason is that there aren't a lot of products that are long-duration products insurance companies and pension funds, annuities providers can invest in.

If you're a life insurance company, if you have annuities or a pension plan, you're investing money today that you don't expect to pay out for claims for years, sometimes decades. When you think about what a reverse mortgage is, a reverse mortgage is a product that also should have a long duration.

Investors don't have a lot of those things in the US that they can invest in. That's why investors are interested in what we're doing.

When Ellington acquired us in 2022, we spent over a year creating a new securitization structure that would allow us to put reverse mortgages in so that the structure matches the underlying assets. That structure required a lot of work. That's really one of the many things about the business we're excited about. It's allowing us to bring investors into the market.

There's also pretty strong demand for Ginnie Mae securities. We're able to securitize that, but those come with the full faith and credit guarantee of the US government.

Regarding your professional background, you earned a Ph.D. That's not a traditional route for someone to become a mortgage industry CEO. How did that happen?

Mayer: Like most people who get Ph.D.s in economics, I got in thinking I was going to work teaching, analyzing government policy, doing things to help make the world a little bit better. That's why most people get a Ph.D. in economics. They like doing policy stuff. They're a bit wonky. I have a little bit of a wonky nature.

I worked at the Fed, and then I worked in business and in business school. I did a lot of work in public policy, but I have to admit over time, some of my takeaways were it's very difficult to do things in the policy arena. Government is slow, and it involves tradeoffs that nobody likes.

I love doing research. For me, the intellectual benefits are strong. But if you want to change the world — if you want to do something important — I think there's no way to do it better than to build a business.

I was a co-founder and ran a hedge fund. Then, I moved from the hedge fund business; I wanted something that had more of a social purpose to it. Longbridge is the third startup company that I've been a principal of.

Having like minded people at Longbridge, it is really a way of trying to change the world by building and creating products that solve financial problems for older borrowers.

It's way harder than I thought, and it's a team effort. Having a social value to what you're doing, but recognizing that doing that through the private sector allows you to accomplish things that you might not be able to if you went to government, those are things that I can do at this stage in my life and career that I couldn't do earlier.

How has that nontraditional path served you at the company? Is there something from your past career you think enhances the operation?

Mayer: To me, the unusual thing is not being a senior leader at a company. Lots of people go from academia to developing business ideas, other things. That's not uncommon. It's running the thing and all of the day to day responsibilities of being a CEO. Almost no Ph.D.s run operating companies of any kind.

I think my background as an academic has been hugely helpful for the success that Longbridge has had. I'm somebody who studied and worked and looked at financial crises and cycles. A bunch of my research is about cycles and securitization. If you do that, one of the things you recognize is that markets will, at unpredictable times, melt down, and so securitization is a great way of financing mortgages or other vehicles. I spend a lot of time looking at the structure of securitization markets and what drives premiums over time.

But it works till it doesn't, and that means you have to worry about risk, and you have to plan for markets melting down. Historically, we paid attention to risk, and that has allowed us, at turning points, to gain market share.

We hedge things that other people don't hedge. We're very careful about risk and how we manage it. That doesn't mean that there aren't risks that could hurt us, but my lesson as an academic is you should pay attention and be careful about not trying to get over your skis too much.

Having spent years traveling around the world meeting with people who are financing reverse mortgages, that kind of learning and thinking about markets, those are all things that we have historically thought about at our company and that have helped me as part of a larger group think about these issues and have a little bit of humility.