With the Help of the VAF, Santa Fe Software Startup Advocates for Senior Citizens
Reverse Engineer Lab’s innovative app helps increase understanding of reverse mortgages
For Melissa and Pilar Patterson-Kling, trying to help family members with finances presented a career opportunity. About five years ago, they were in the process of deciding what professional field to move into next when both their mothers asked them about how reverse mortgages worked.
Their mothers, who are in their 70s and 80s, needed help paying their property taxes—big monthly bills to support on retiree incomes. The Patterson-Klings said they’d help them understand the process, but had no idea that the learning curve would be so steep.
It took six months for the Patterson-Klings to gain a basic understanding. “The only organizations we could find any information from were lenders, and the last thing you want to do is be educated by the salesperson,” Melissa said.
Learning the Language of Reverse Mortgages
Eleven years ago, the Patterson-Klings moved to Santa Fe from California, where they had both worked in software development for the satellite industry. Armed with their backgrounds in software technology, they decided to advocate for seniors, and Reverse Engineer Lab, a branch of SoftOp Engineering, Inc., was born in Santa Fe.
“This is one of the most complicated home mortgages you’ll ever look into. There’s a lot of information out there, but it doesn’t necessarily help people understand how to use it,” said Melissa.
For a senior who takes out a reverse mortgage, the home will be sold when they die and the loan will be paid back in full; in that way there is no need to make a monthly mortgage payment. There are also multiple ways to tap into the home equity with a reverse mortgage, from a line of credit to a direct monthly deposit for a period they determine—as long as they’re living in the home. The youngest that one can be to apply for such a mortgage is 62 years.
Given the tough time they had obtaining objective information about reverse mortgages, the Patterson-Klings were determined to help other families through the process. “It’s really important that people understand the process and can make a decision based on the different variables,” said Pilar.
Assistance at a Critical Juncture
The Patterson-Klings knew that Reverse Engineer Lab would need to roll out an easy-to-use, educational app for both desktop and mobile use. To do this, they needed to look beyond their own technically proficient backgrounds for help in taking their idea to market.
Enter the Regional Development Corporation (RDC), an economic development organization focused on growing jobs and attracting revenue to the Northern New Mexico economy. One on one mentoring sessions and grant-sponsored workshops on marketing, finance, and equity investment organized by the RDC played a role in the early stages of the company’s development. These workshops and mentoring sessions were a product of a grant from the US Department of Commerce Economic Development Administration (EDA), under the “Cluster Grants for Seed Capital Funds” section of the “Regional Innovation Strategies” program, which the RDC had received in March, 2015.
“The workshops help to validate your ideas,” said Pilar, “and they confirm that you’re pointed in the right direction.” Mentored by RDC staff and Ross Cheney of the City of Santa Fe Economic Development Department, the Patterson-Klings were grateful for the assistance they received. “They were great sounding boards and helped us with some brainstorming sessions,” Pilar added.
The workshops were designed to help growth-oriented companies prepare to apply for the Venture Acceleration Fund (VAF), the only program in Northern New Mexico that provides seed money for early-stage technology startups and growth-oriented business who lack the collateral for debt financing. Administered since its inception in 2006 by the RDC, the VAF is funded primarily by Los Alamos National Security (LANS) with additional support from Los Alamos County, Santa Fe County, City of Santa Fe Economic Development and New Mexico Manufacturing Extension Partnership (MEP).
Happily, Reverse Engineer Lab was chosen as one of the VAF awardees in 2016. The VAF award is a zero-interest loan that only requires payback if the company moves out of state, is acquired, or meets certain revenue goals. The validation that comes with the award is just as important as the funding for most recipients, and Reverse Engineer Lab is no exception to this.
Since then, the Patterson-Klings have worked with a web developer to create the app, which is now in beta-testing. Target users are seniors and their family members who might be helping them through the process of obtaining a reverse mortgage. The app features step-by-step instructions in bite-sized chunks, large fonts, and bright contrasting colors. The information is deep and accurate, making it simple for financial planners to use as well, if a senior is utilizing the services of such of a person. The software is also completely compliant with all government rules and regulations.
“We really needed to work with people who could make our ideas look professional,” said Melissa. “You can’t market a prototype. The way the product looks today is thanks to the VAF award.”
After building the program, they presented it to the chief economist from Housing and Urban Development (HUD), who designed the reverse mortgage program 30 years ago. The fact that he was enthusiastic was very validating, said Melissa.
When asked what’s next for Reverse Engineer Lab, the Patterson-Klings report they are actively pursuing contracts and hope to obtain their first one mid-2017. With additional contracts obtained, they foresee growth of their company and anticipate being able to hire employees.
“If you’re doing something entrepreneurial, it’s all about giving back and helping other people,” Melissa said.
“Melissa and Pilar represent exactly the kind of entrepreneurial spirit the RDC loves to support,” said Val Alonzo, RDC Executive Director. “We are truly excited about where Reverse Engineer Lab is headed, and are glad to hear our EDA-sponsored mentoring sessions and workshops were instrumental in their decision to apply for VAF funding.”