Legacy Improves HECM Counseling Process for Borrowers Through Website

NewImage.jpgLegacy Reverse Mortgage has developed a way to improve communication and the speed of delivery between a reverse mortgage borrower and HECM counselor through its company website.  With the help of Reverse Vision, Legacy offers a shared and secured portal for borrowers to retrieve documents for their loan.

“At Legacy Reverse Mortgage, we want to make sure every one is working off the same page and that mortgage applicants understand all of the details of their reverse mortgage calculations,” said Jim Cory, the company’s President and CEO. “Our new streamlined mortgage protocol with counselingdocs.org means that we can make the whole process faster, easier and simpler than our competitors.”

After a customer meets with a Legacy loan officer, they go over a quote that is produced by Reverse Vision software and published to counselingdocs.org with a secure passcode and user identifier.  The customer can then give the secure passcode and identifier to their independent HUD approved HECM counselor.

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As part of the new HECM counseling protocols, borrowers interested in reverse mortgages must receive a large information package that includes individualized loan tables prior to the counseling session.

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  • Not sure it this is even allowed, and I can tell you that as a counselor I would never use it. I believe it allows two things to happen, one is that there is an impermissible contact between the counselor and the lender. I admit that it is slight, but allowing this process puts the lender into the counseling process and that is a place the lender should not be. Two, I dislike the fact that the lender wants to make sure that “every one is working off the same page.” There are no guarantees that the lender will not look at or change the counselor’s paperwork. What happens if the lender/broker does not like the counselor’s paperwork? Again, there are no guarantees that the lender will not steer a client away from a counselor whose paperwork the lender does not like.

    I just see this “portal” as having too many danger points and not enough good points to be useful. As a counselor, I do not want anyone between me and the client to be counseled, particularly not the lender. That is the purpose of having “independent” counseling. I think this “portal” removes some of the independence, or at least some of the appearance of independence from the counselor. Ultimately, I think the lender is treading very dangerous ground in that the lender might very well find themselves sued by someone claiming that they did not get independent counseling. The lender might well win, but at what cost? Even the accusation in today’s marketplace, particularly among seniors, is enough to cause serious problems.

    I understand what the lender is trying to do, but I think it is inappropriate.

    Frank J. Kautz, II
    Staff Attorney

    Community Service Network, Inc.
    52 Broadway
    Stoneham, MA 02180
    (781) 438-1977
    (781) 438-6037 fax
    FrankKautz@csninc.org –work
    Frank@Kautzlaw.com –private

  • Frank, I’m not sute that you do understand what the lender is trying to do here, and I think you’re misunderstanding the purpose and the extent of the interconnectivity here. This widespread discussion of the wjole matter was taking place months ago anyhow.

    The idea was to present to the counselor the exact scenarios that a loan officer was showing to the client. That is good for everybody. I’d experienced several cases in years past where the client came out of counseling with an illustration from the counselor’s (AARP?) software showing that they would receive more money or a lower interest rate from loan programs that counselor’s software created. The problem was that those rates or margins had disappeared from the marketplace and the closing costs were unachievably low. The sharing of the software illustration prevents the counselor from undermining their own role and credibility by creating unrealistic scenarios and expectations.

    From the counselor’s point of view, the knowledge that an unknown counselor will be looking the scenario a Loan Officer created is a dis-incentive to jack up rates or costs. Do you want to remove that elemnt?

    There’s no back-and-forth connectivity here. Neither the lender nor the counselor can tweak the scenario created for the counseling session.

  • Frank,

    I read your comment and I think it’s necessary to clear up a few misunderstandings. Documents provided to the client by the lender are uploaded to a third party portal that the client and counselor may access, allowing for a more on point discussion during the counseling session. The lender is out of the equation entirely. This third party portal is neither controlled nor owned by the lender. The customer may, at their discretion, choose to supply the counselor with the portal site and passcode. Put simply, there is no contact whatsoever between the lender and the counselor.

    Your second concern that “there are no guarantees that the lender will not look at or change the counselor’s paperwork,” is also a misunderstanding regarding the process. The counselor is not uploading anything. There is no paperwork to “look at or change” because the counselor doesn’t share information over the portal. The information is accessible to the counselor if the counselor chooses to see it.

    We think the fact that “everyone is working off the same page” is very important. We believe that our customers who utilize this service get more accurate counseling, as the counselor is able to view the customer’s actual reverse mortgage quote.

    We are extremely confident that our process does nothing to jeopardize the independent counseling of reverse mortgage applicants. We are great advocates of the counseling requirement for all reverse mortgages and we believe the independence of counseling is of paramount importance.

    Considering the misunderstanding with how this service works, we urge you to reconsider your position and we even urge you to rethink your stance that you wouldn’t use this service. Provided you are willing to reconsider your comments, we are open to dialogue and would be happy to present you with a demonstration showing how this service not only leaves the counseling independence intact, but actually can improve the quality of the counseling.

    Todd P. Ausherman, Esq.
    Legacy Reverse Mortgage

  • Bill,

    Thank you for your comments. You are right, I did not understand it to be the way you are presenting it from the article. I also spoke with someone from Reverse Visions a little while ago and he also explained it this way. If it is the way that both of you are suggesting it is, then my comments are off base. As you can see, all I had to go on was the article itself and that is where my comments are based. I was not part of any back and forth regarding this over any period of time.

    I also agree with you that the counseling software leaves something to be desired in the way it gives us the rates. As I tell everyone that I counsel, my numbers are fiction. They are a guess, in no way to be used as an indication of what the client might get, just as a way to explain the way reverse mortgages work. I also agree that seeing the numbers that the lender actually provides is good as well, but that too can be potentially misleading if the numbers were not run using the same value for the home and if the LIBOR changed at any time between the proposals. A good counselor should pick up on this to tell the clients to watch for it, but some might miss this. (I always recommend that clients talk to more than one lender and that they get the lenders to print their proposals out using the same value for the home and, hopefully run them on the same day. It will give the clients a truer picture of what is going on with the fees and costs.) I assume, from the additional comments I received from my phone call, that Mr. Cory’s comment on “every one is working off the same page” had to do with the amounts and schedules, not the counselor’s paperwork. From the original context of this story, that is what it sounded like. I apologize to Mr. Cory if I misread his statement. (The problem of trying to put a news story into a paragraph or three. 🙂

    Again, I do see some value in this, but I have to admit that I would still feel far more comfortable, as a counselor, sending my documents directly to the senior. On the other hand, if there is no way the lender can view the counselor’s documents nor alter them, then the issue of possible collusion will go away.

    Frank J. Kautz, II
    Staff Attorney

    Community Service Network, Inc.
    52 Broadway
    Stoneham, MA 02180
    (781) 438-1977
    (781) 438-6037 fax
    FrankKautz@csninc.org –work
    Frank@Kautzlaw.com –private

    • Mr. Kautz,
      Your comments are helpful. They provide a great deal of insight. This type of “conversation” is exactly what John Yedinak discussed with me over two years ago when I began considering writing for RMD.
      Unlike other blogs, we have had many important and meaningful discussions between various stakeholders about important subjects such as this over the last three years. I look forward to reading your comments in the future.

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