Sept/Oct 2021 Reverse Mortgage Magazine

moratoriums. When the Biden administration extended the moratorium in February, it said more than ten million homeowners were behind on their mortgage payments. The moratorium expired at the end of July. For Celink, the effort calls for balancing the need to meet federal requirements with the goal of helping borrowers avoid default and making sure they have someone to talk to, if needed, LaRose says. “We’re trying to think proactively about what we can do to get information in front of borrowers about COVID relief from federal and state governments, encouraging them to contact us early and often so we can figure out a way to help resolve the default,” LaRose says. “We’re just trying to get as much engagement as possible throughout this whole process.” It’s not just servicers who could feel a pinch. The backlog also will affect law firms, county courts and others with a role in the default process. “This is an unprecedented event, a moratorium this long, affecting this many people,” Balettie says. “It’s going to take a huge, coordinated effort by servicers to make sure that everything is done in a timely manner.” Private-sector reverse mortgages are another source of servicing innovation, in part because they are more flexible than the government-backed alternative. Finance of America Reverse (FAR), based in Tulsa, OK, has been incorporating new approaches in a recently launched product called EquityAvail, which combines features of both forward and reverse mortgages. It includes an escrow account, for example, that addresses one of the top reasons for default: failure to pay taxes and insurance. Monthly escrow payments might initially put off borrowers who would traditionally be interested in a HECM, since they are looking to avoid monthly payments, says Martin Burd, senior vice president of asset management for FAR’s parent, Finance of America Cos. But escrow payments can be a convenient way to cover annual tax and insurance bills, he says. And they provide extra protection for investors. “We thought the idea had some legs, so we went with it,” he adds. Certifying Occupancy FAR also has adopted a measure for its proprietary prod- ucts that HUD enacted on a temporary basis during the pandemic: allowing reverse borrowers to certify occupancy verbally rather than through the mail. FAR took it another step and includes an attestation by a company representa- tive, which creates a record of the conversation. “We’ve had great success with that kind of outreach,” Burd says. Looking ahead, the company is experimenting with geolocator technology that would allow borrowers to simply push a button to certify occupancy, he says. “We feel like if we can do that, we can take our verbal occu- pancy to the next level.” More Flexibility Sought The traditional HECM program, meanwhile, could eventually benefit from greater flexibility, Burd says. “I think there’s an opportunity, but I also understand that HUD has to protect the insurance fund, so we need to do things that are mindful of that, as well.” One change could be greater flexibility in the timelines for default events leading up to a foreclosure. That would give servicers more opportunity to work with borrowers, such as covering tax payments, a process that can take time. There also are often underlying reasons, such as health issues, that lead a borrower to miss tax payments. At a time when home values are appreciating, there is likely enough equity in a home for servicers to recover those payments, Burd says. But the penalties for missing regula- tory deadlines are a disincentive. “If you miss a milestone, you run the potential of a claim curtailment,” he says. More flexibility would help more than borrowers, however. It would help servicers contribute to the increasingly positive perception of reverse mortgages. An originator might spend a few weeks or months with a borrower. Servicers spend years. “I think what we do in servicing matters as much as what we do in origination to show we’ve got the customer’s best interests at heart, we’ve got the right controls in place to monitor draws and keep borrowers in their homes and maintain equity as they age,” Burd says. Servicers Adjust continued from page 19 20 REVERSE MORTGAGE / SEPTEMBER-OCTOBER 2021