Even through the reverse mortgage industry was built on a sales model that involves sitting with borrowers around a kitchen table to explain the reverse mortgage process, several lenders have developed a different model that thrives on process and technology to educate consumers.
The reverse mortgage call center has gained popularity as an effective model that can increase turn times and expand based on economies of scale. While call centers, some of which offer 24/7 access to loan originators, can be good for business, licensing aspects and the lack of face-to-face borrower interaction are aspects that are open to criticism.
Spring, Texas-based Reverse Mortgage Solutions launched a retail and correspondent channel in March, and now operates a 25-seat call center with room to grow.
“The call center does a great job of capturing certain borrowers where we have already identified a need, and the borrower already knows what they want,” says Michael Kent, senior vice president of RMS. Additionally, Kent says, “There’s a group of clients who need a substantial amount of education and [being on the phone] makes them comfortable with the process.” Kent explains that the RMS team is different from other call centers in the sense that the loan officers working with clients on the phone can, in some cases, push them to the field agents, who then follow up with the potential borrower.
One Reverse Mortgage, the Detroit-based division of Quicken Loans, operates a call center of 100 originators with plans to increase the number of originators to 125 by year end. Richard Mandell, vice president of One Reverse, the third-largest reverse mortgage lender in the U.S., says the model has continually proven effective for the company, which developed and launched its reverse mortgage operation after success with its forward mortgage call center.
“It’s probably even better for our [reverse] clients than for a forward client,” he says. “Our client finds that talking over the phone and not having to meet with someone is a huge convenience for them. A lot of pressure is taken off. They are willing to ask more questions and they’re more comfortable because it is over the phone.” The process also lends itself to technology use, and leads to quicker turn times, he says. Those turn times average 25 to 30 days from the time the client’s paperwork is received, according to One Reverse, which, based on the company’s research, compares to an industry average that is closer to 60 days.
On the flip side, some borrowers may benefit from a more intimate face-to-face interaction.
One broker tells RMD that a recent call center exchange involving one of his customers resulted in a complicated process due to a promised appraisal amount that ultimately came in quite short. He pointed to the potential danger of working with a phone originator who might have benefited from meeting the borrower face-to-face and visiting the borrower’s home. What ultimately led the borrower through additional hours and effort could have been avoided for a fee that was just a little bit higher, he says.
The licensing process can also present a challenge, in that call center employees must be licensed in the state from which the potential borrower is calling, in order to discuss aspects of the reverse mortgage loan. Some call centers address the licensing issue through complex routing systems to ensure that the borrower meets the originator along the right state lines.
The process can be rigorous, but rewarding, lenders say. The RMS call center is licensed in 31 states with individual loan officers maintaining licenses in several states each. “It’s a non-ending cycle of training, processing, licensing and passing national and state exams,” Kent says.
While obtaining licensing to work with clients in many states can be a challenge, Mandell says, “It is something that makes us better.” Because the company’s mortgage bankers have to be licensed in every state where they do business, they go through all of the requirements, he says. Some may have licensing in up to 25 states.
For a reverse mortgage call center to work effectively, the training of those loan officers is essential, explains Kent. It’s important for them to understand the anatomy of the sale, including where to start, where to educate and where to finish. RMS provides its call center loan officers with bullet points and a checklist rather than a scripted conversation, so that they can make sure the senior is engaged and fully understands how the process works. “We can’t leave that up to hoping,” he says.
The deciding factor may come down to the borrower preferences. While the model works for some, it may not be one-size-fits-all.
Written by Elizabeth Ecker