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

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  • I definitely can’t see anything but good to come out of this. However, remember back when, which was some years back, most of us stayed in touch with our customers.

    In fact, many of us became friends and confidants of our borrowers, I know still do and I still am to many of them.

    I realize that HOPE is on a much larger scale and as I said, this is a good thing but it does bring to mind what may be being lost in this hustle bustle world we live in today!

    Do many new people coming into the industry stay in close contact with the customers we came through for yesterday? Do we remember their birthday’s or holidays ETC??

    Just a food for thought but I am all for HOPE!!

    John A. Smaldone
    http://www.hanover-financial.com

  • This is a fantastic idea and a real help to Seniors. Most people who get reverse mortgages don’t know what they are truly getting into. There is always something that was not explained to them or something they felt was “left out” when signing up for one.

    A none partisan 3rd part group to go to to explain all the ins-and-outs with nothing to benefit from their decision is a great idea. I think only great things will come from this.

    Malakai Sparks
    https://californiamortgagerates.com

    • Mr. Sparks,

      We welcome the efforts of this organization but that does not mean we agree on the depiction your comment paints.

      Are you aware of required counseling? Very few reverse mortgages originated today come from any source other than those insured by FHA. The very few which are not insured by FHA are jumbo reverse mortgages whose home values start at $1,000,000 if not higher. The only way a senior can get a FHA insured reverse mortgage is by receiving a certificate from a qualified counselor. FHA is constantly monitoring its counseling efforts and updating and improving that process.

      Few if any seniors are not aware of their obligation to pay taxes and insurance or their obligation to maintain the home in a structurally sound condition. You are clearly talking about a different era.

      We would like to eliminate all foreclosures due to the failure of borrowers to pay their taxes and insurance timely but we realize that is all but impossible BUT our efforts are much stronger today than at any time in the history of the industry.

      I suggest you or one of your staff make a mystery sales call to one of the major reverse mortgage lenders to see what the actual situation is today. Then write an article about the consumer protections you encounter with this mortgage versus any other you choose.

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