Nonprofit Group Launches Pilot Program to Help Reverse Mortgage Borrowers

Though the default rate on reverse mortgages has been decreasing in recent years, there are still borrowers who are struggling and teetering on the edge of going into default. A nonprofit organization that blossomed during the height of the housing crisis is now adding the reverse mortgage sector to its docket to help combat the issue.

With the mission of building a more collaborative education experience for the reverse mortgage industry, Washington D.C.-based HOPE NOW helped over 7,000 clients nationwide in 2015 who were in tough situations related to mortgages and are now launching a pilot program in 2017 to do the same for reverse mortgage borrowers, explained Eric Selk, executive director of HOPE NOW, during a panel discussion at the 2016 National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting & Expo.

HOPE NOW is an alliance full of counselors, mortgage companies, investors, regulators and other professionals in the mortgage industry. The implementation of the organization was supported by the U.S. Department of Housing and Urban Development (HUD) to bring people together to solve problems within the mortgage industry.

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HOPE NOW is taking its community-based model that it has been using on the forward mortgage side of the industry to help homeowners who already have reverse mortgages. The idea is to get reverse mortgage lenders more involved with their clients on a personal level, Selk explained.

“We want to address families who have a reverse mortgage already. This is not about originations, but dealing with your existing pipeline,” he said. “You could invite someone who may have issues already or you could invite someone for a benefits checkup.”

The pilot 

The program will be piloted in California to start and will be held as full-day events where reverse mortgage borrowers can come and choose what they want to focus on for the day and be connected to resources as well as solve issues.

The events will be full of participants related to the reverse mortgage market as well as nonprofit organizations who can be a useful resource to borrowers, especially those who are in T&I default.

“This is a unique situation because this has not been done before in this specific area [of reverse mortgages],” Selk said. “These events will be a one stop shop for seniors to be able to come into a community center and spend the day between the nonprofits and maybe there are some community services they can receive help from too.”

The platform HOPE NOW uses lets the customer choose what they want to talk about and how much information they want to disclose. The idea is to look at consumers specifically with affordability issues and connect them to the right resources, Selk added.

In 2017, there will be three events in Los Angeles, one in San Francisco and one in San Diego to pilot the new program. The main focus of the events will be connecting borrowers with their mortgage servicer, but layered on top of that will be other mortgage-related information that may be of interest to senior homeowners.

“We feel this will be a very holistic method. We have seen great success with the forward space in certain markets,” Selk said. “There would be a big room with tables all around it full of local service providers. You’d have faith-based groups, someone to paint your house, someone to mow your law—it’s just remarkable what resources are available in a market that many families don’t necessarily know about.”

Currently there are four reverse mortgage servicers working with HOPE NOW, which include Wells Fargo, Bank of America, CIT Group and Champion Mortgage, a division of Nationstar Mortgage.

Written by Alana Stramowski