Megen Lawler saw the need for a reverse mortgage-focused documents preparation company back in 1994. Eighteen years later, she is the CEO and president of Bay Docs, Inc., the company she founded to fill that void. In her time in the business, Lawler has worked with lenders large and small, new—and not so new. From her Bay Area California home base, Lawler sat down for a call with RMD to tell us what got her hyped on the HECM in the first place, and why she’s still here in this business almost 20 years later.
RMD: When did you get your start in this business?
ML: I started in reverse mortgages in 1990. I worked for a company in San Francisco that had its own proprietary products, which was one of the first three reverse mortgage companies out there. When we got into the Home Equity Conversion Mortgage (HECM) industry in 1991, I helped develop a method of doing documents as a service. The Department of Housing and Urban Development said then that you couldn’t charge for document processing unless it was your own company, so I started BayDocs in 1994.
RMD: How was it getting the business off the ground?
ML: It was a…slow progression. At first, if I did five loans, it was a great week. Then we started picking up clients. We worked with Home First (Financial Freedom) and Seattle Mortgage Company, which launched us into getting a lot of new business. We also worked with Unity before it was picked up by Financial Freedom. At one point, we had the majority of the industry going through our system. And at that time, we were still faxing the doc orders.
RMD: What has changed?
ML: Today, everything is hands-off. If a client has a special need, we can make changes, but for the most part, the industry has stayed stagnant on the document side. Only over the past couple of years have states started getting involved in asking for state-specific disclosures, which has led to some adjustment.
RMD: What’s the biggest challenge in this industry?
ML: For us, staying up on all of the regulatory and compliance issues. We have had to figure out how to stay on top of all the changes with Dodd-Frank. It used to be that we worked with an outside firm for compliance, and now we have people in house to handle compliance questions, so we get answers instantly. That’s huge for us, because there aren’t a lot of people in our industry who have that type of background.
RMD: How would you advise someone looking to get into this business for the first time?
ML: Have a staff that’s dedicated to reverse. You almost have to strip your knowledge of forwards and then go into reverse. We continue to have to work with lenders’ compliance departments to understand what they want in their packages. We’ll say “This is not applicable to reverse mortgages,” and sometimes they stay they still want it.
Then also from a technology standpoint, there are limited options for lenders in terms of what they are accustomed to. Many lenders don’t realize that Bay Docs offers a LOS option called Reverse Express which provides technology as well as document. There are lots of forward LO systems that just don’t accommodate reverse.
RMD: Where’s the opportunity here?
ML: The exciting thing is the potential for this industry. There is a need out there for this product. It serves a great purpose for the borrowers that need it and it would be great if we could come up with ever more proprietary products. In terms of the stats for potential growth, we’re not even close to that! Not only where it could go, but then also the challenge is crossing our fingers and hoping it actually does go there.
RMD: What frustrates you?
ML: When people complain about the costs. It’s really the lender taking the risk. Also, when I hear bad stories it is so upsetting—I wish the Today show, the media and members of government would get it right.
RMD: OK, so as for your Northern California home base of Novato. What’s there to know?
ML: Novato is the gateway to Napa Valley. We are in the heart of everything great.
RMD: What’s the inside scoop to wine country?
ML: There is a great new winery, Rams Gate, nearby! Of course I love to stop at Gloria Ferrer for champagne… and visit the gardens of Chateau St. Jean in Sonoma! There are so many terrific places nearby and we love to go up to Alexander Valley to wine taste as it can be less crowded!
RMD: Enough said.
Written by Elizabeth Ecker