“It was time for us to focus all of our corporate resourceson a singular product,” said John LaRose, Celink founder and CEO. “Given the new mortgage landscape and the ever-increasing population of retiring boomers, we saw the subservicing of reverse mortgages as defining and directing Celink’s future.”

In late 2011, Celink assisted its forward subservicing clients in moving their loan portfolios either in-house or to an alternate subservicer.

Contrary to some of the challenges facing the forward mortgage world, Celink sees a bright future for the subservicing of reverse mortgage loans.

“Reverse mortgages are a feel-good product,” said RyanLa Rose, Celink COO. “They help people age in their homes, maintain their independence and self-determination, and provide viable and sound financial solutions for so many. We all need joy in our work, and our employees feel joy every single da yas they help seniors retain their dignity and freedom.”

Written by Elizabeth Ecker

The deal which is subject to purchase price adjustments and is expected to close on December 22, 2011, according to a Securities Exchange Commission filing. The transfer of the loans is expected to occur in stages beginning in the second quarter of 2012 and continue through the rest of the year.

The decision to sell the servicing rights comes after Bank of America announced it was exiting the business in February, it was the second largest reverse mortgage lender in the country.

Sources close to the transaction tell RMD that Celink, a subservicer based in Lansing, Mich., will handle the servicing for Nationstar. When RMD asked Celink to confirm, the company declined to comment.

Nationstar is a one of the nation’s largest mortgage servicers and is backed by Fortress Investment Group (NYSE:FIG).

When a borrower fails to pay his or her taxes and insurance, that person will be placed into default status, at which point Celink’s servicing platform, ReverServ, auto-assigns a company associate. The Celink associate will serve as the exclusive point of contact for the borrower until the default is resolved through the remediation or foreclosure process.

“We have always prided ourselves on providing our clients with exceptional service to their borrowers,” said Ryan LaRose COO, “and this is one more example of Celink being proactive with borrowers on a very critical issue.”

Working with a single person through the process eliminates the need for borrowers to re-explain their situations during each communication with the subservicer, Celink says. It also provides comfort that they have a “dedicated” person through the process.

This single point of contact is only assigned to a select number of accounts so Celink can provide the most personalized service possible to the borrower.

Any written communication to borrowers in default status will also contain their single contact’s name, and they will have access to a default-only toll-free number by which they can easily be in touch with their contact person.

Written by Elizabeth Ecker

“We have seen an increase in the marketing time for REO properties, as well as estates struggling trying to sell the homes after the borrower has passed away,” says Ryan LaRose, chief operating operator for Lansing, Mich.-based servicer CeLink. “In some cases, because there is little to no equity remaining in the home, the estates are simply walking away and not trying to market the property after the borrower has passed away, as there is no incentive for them to do so,” he says.

Department of Housing and Urban Development regulations require that servicers list on their demand letter that they have 30 days to satisfy the loan or contact the servicer with their intentions, according to LaRose. However, if they can provide documentation that they intend to market the property, obtain financing to pay off the loan, or move forward in the process to sell, then HUD may grant time extensions to give the heirs up to one year from the time the borrower has passed away.

The delays have the potential to cost servicers more money if the loans are not assignable to HUD. Regulations prohibit assignment of the loan to HUD when the borrower has failed to abide by the covenants of the mortgage and maintain hazard insurance on their property.

The foreclosure delays vary across states, says Marc Helm, president and chief operating officer for Spring, Texas-based Reverse Mortgage Solutions, Inc. While RMS has not seen an increase in the sale time of REO properties, “I would agree it’s taken longer to get through foreclosure,” says Helm. In some states, such as Florida, it has taken substantially longer, he says.

“We have seen an increase in the percentage of appraisal-based HUD claims (which means that the property is not able to be sold during the first six months following the foreclosure sale) on REO properties,” says LaRose. “With that being said, there are some pockets around the country that seem to be performing better than others.”

Written by Elizabeth Ecker

Elizabeth Rose, project coordinator for HECM property charge loss mitigation counseling for National Council on Aging, shared program data with NRMLA West conference attendees in Newport Beach, Calif. on March 16.

According to the information shared by Rose, 26 borrowers are currently enrolled in the program, which works with four partner sites in Miami, Los Angeles, Detroit/Lansing and Houston. The program aligns with HECM servicers to identify those who are in default based on a time and/or dollar qualification; connects those in need with case managers; and works with borrowers to resolve the default issue or transition the borrower from his or her home, if necessary.

While the exact number of reverse mortgages in default is unknown, a 2010 report from HUD’s Office of Inspector General estimated the number is around 13,000. HUD is making an effort to collect reports from lenders on defaults; the first of those reports were collected in February.

Prior to HUD guidance in early 2011, “There was a real lack of clarity about what to do with tax and insurance defaults,” said Ryan LaRose, chief operating officer of Lansing, Mich.-based loan servicer Celink. “While the mortgagee letter from HUD in January may have been seen as bad news, now we have some direction and clarity and a framework to help borrowers.”

The borrowers in the program range in age from 64 to 95, with an average monthly income of $1,330. Other findings show that the highest amount owed is $32,000. Rose also shared data on the loan information of the borrowers. Most are lump sum borrowers and several are HECM for Purchase borrowers.

Of the 26 seniors in the program, 5 have cured their delinquency with case management; nine are facing transition out of their homes; and 12 are in the case management process.

The findings make a case for face-to-face work with seniors in default. Rose gave examples of three situations where the delinquency could be resolved from “thinking outside the box.” In one instance, Rose explained, in visiting the home of the borrower, the case worker looked around the home and noticed some valuables that were later appraised and sold to help work toward tax or insurance payments. In another case, a previously undisclosed medical condition was brought to light, leading to a tax exemption. In a third case Rose cited, a couple with a reverse mortgage was unhappy in their marriage and through case management, worked toward separation, which improved the default situation for one party. Each situation required working directly with the borrowers to determine a specific course of action and ultimately the defaults were resolved.

In terms of challenges the program has identified, “There can be difficulty reaching clients for enrollment,” said Rose. “Many phone numbers are disconnected. Often, [borrowers] may also be getting other collection calls, so they don’t answer or they will avoid calls.”

A challenge for Celink has been finding the right people to work in the program on the servicer side, who can provide skill sets both in customer service and as a collections capacity.

Overall, however, the findings shed light on some situations that can be resolved with program assistance, and some servicers say the HUD requirement to collect and report on tax and insurance default data can be seen as a good thing.

The outcome has been good, said LaRose. “It has been an extremely positive experience,” he said. “We were lucky enough to get a hold of borrowers and put them through the program. “It’s beneficial to hear from the third party who wants to help.”

“We all have the exact same goal: curing these delinquencies,” said Rose.

Written by Elizabeth Ecker

“Celink has continued to successfully hire, develop, train, and retain a staff to proficiently service reverse mortgage loans,” said the agency.

The company developed a proprietary computer system with IBM to manage its reverse mortgage portfolio, which S&P believes is an effective system for servicing reverse mortgages.

“We believe management continues to build and enhance its proprietary servicing system for reverse mortgages,” said S&P.  “In our view, this system, along with effective management, has facilitated the company’s continued expansion of its reverse-mortgage servicing platform while maintaining industry standards, which we consider satisfactory.”

According to S&P, Celink remains the fourth-largest servicer of HUD-insured home equity conversion mortgage (HECM) loans and is the largest independent servicer of private-label HECM loans.

Additionally, in 2009, Celink became an approved Ginnie Mae HECM Mortgage Backed Security (HMBS) participation agent and subcontract servicer. The company is now reporting to and subservicing 54 active HMBS pools with over 16,000 participations.

“After a rigorous evaluation process, we proudly selected ICG as our tax tracking business partner,” said Ryan LaRose, Celink’s COO, “because of their focus within the reverse mortgage industry.  Their processes and procedures are specifically designed to proactively assist and educate senior borrowers about their responsibilities regarding the payment of their property taxes.”

“In addition,” Mr. LaRose said, “this partnership allows us to dedicate more internal resources to working with borrowers who have previously defaulted on their tax payments, in an effort to help them return to a current status.”

ICG, Inc. is located in Dallas Texas and has been providing property tax consulting services since 1986.

Ozanich has over eight years of experience in the company’s default management department for its forward mortgage clients, and has served as the Manager of Default Operations and a member of Celink’s Executive Management Team for the past two years.

Additionally, she brings a strong background in workout strategies, loss mitigation, and bankruptcy management to the reverse mortgage servicing department.

“Over the past 6 months, Celink has doubled the size of its Tax and Insurance default unit from four employees to nine”, said John LaRose, CEO, “and we are thrilled to have someone of Shannon’s talent level serve in a leadership role for this team”.

Celink is a Ginnie Mae approved subservicer with an active reverse mortgage servicing portfolio exceeding $6 billion of loans.