In the wake of new disaster guidance for reverse mortgage borrowers from the Consumer Financial Protection Bureau (CFPB) and as parts of the southeastern United States continue to contend with the aftermath of Hurricane Dorian, affected reverse mortgage borrowers have another alternative to receive counseling and personalized assistance after surviving a natural disaster.
Project Porchlight, an initiative of non-profit counseling organization Money Management International (MMI), seeks to reach out to the reverse mortgage industry to get the word out to any reverse mortgage borrowers that may have been affected by the onslaught of a natural disaster, up to and including recent incidents involving Hurricane Dorian.
“For some people, it’s a cumbersome, difficult and emotionally painful process to go through their recovery in the wake of a natural disaster,” says Jackie Boies, senior director of housing and bankruptcy services at Money Management International, in an interview with RMD. “Project Porchlight is designed to be that single point of contact so that the person going through recovery has a solid action plan for making claims, repairs and doing what needs to be done to either return home or move to a safe place.”
Seeking more reverse mortgage partners
While the estimate for assisted reverse mortgage borrowers is only 1 percent of the affected clients that the project currently assists, Boies makes plain that MMI seeks to build on its solid foundation of ties with reverse mortgage lenders and originators so that more affected borrowers can avail themselves of Project Porchlight’s assistance, particularly in the aftermath of recent natural disasters.
“We have good relationships with reverse mortgage lenders to begin with, and we’re on the list for any consumer looking for regular HECM counseling,” Boies says. “People are familiar with MMI, so we’ll do outreach to the lending community to let them know about Porchlight, because this is new and different. It’s not HECM counseling or delinquent HECM counseling, it’s not like anything we’ve ever done. But, we’ve recognized for years now that recovering after a disaster is a real struggle for people.”
In observing some of the ways in which natural disasters have affected all kinds of people including reverse mortgage borrowers, it becomes clear how much guidance disaster-affected people need since they often have to deal with a great deal of financial and emotional tumult that can lead to bad decisions made in desperation, or can lead to the creation of new victims of scam artists who try to take financial advantage of the chaos that a natural disaster can create. This is especially true for seniors, Boies describes.
“We’ve seen many of our own clients affected by disaster, and reaching points in the process at times where they don’t know where to turn,” she says. They don’t know how to continue to push back when they’re not getting the answers they need. They become victims of scams, unfortunately. We’re trying to get Porchlight out there so we can be on the front side of this, so we can help people go through the process and make their recovery decisions, and bounce some of the [issues] off of an expert so they don’t get a bad deal or involved in scams, and just have a bad experience [as they try to recover].”
Ways disasters affect seniors and reverse mortgage borrowers
As data indicates that seniors are more susceptible to falling victim to financial scams, Boies relates that one of the aims of Project Porchlight is simply giving disaster-affected borrowers a third-party resource to help them make sure that the processes and agreements they engage in make sense.
“It could be that they have it 100 percent down and don’t need anyone to do anything. But, having a third party run through that process with them and make sure that they’ve covered all their bases [can make a big difference],” she says. “And then, when it does come time to hire contractors and get repair people in there, just having a third party go through all of the particulars to help them see what makes sense and doesn’t on a contract [is helpful].”
Many of the counselors active in Project Porchlight are also long-tenured reverse mortgage counselors, Boies says, so many of them have a demonstrated acumen for communicating with seniors, and for having a true understanding of the reverse mortgage product and its requirements.
“Ultimately they make their own decisions,” she says. “We don’t actually do the work for them, but we certainly have people who are able to communicate well with seniors and talk to them about what really does make sense.”
While reverse borrowers may not be necessarily more or less affected by natural disasters, they are often affected differently because of the basic loan requirements, Boies describes.
“Reverse mortgage borrowers have certain obligations to that loan that you don’t have when you own a forward mortgage,” she says. “The seniors have to go through a bit of a process: they have to notify their mortgage company that they’re not currently in the home, and they also need to make sure they’re staying current on taxes, insurance and other property charges, which could be an issue during that recovery time.”
Getting the word out to the reverse mortgage community
While many of Porchlight’s existing beneficiaries have been connected with the program via word of mouth, Boies says that the addition of a new financial partner has helped project personnel to start getting the word out more aggressively.
“Today we’re in a new phase: getting the message out there is relatively new, and so the reverse mortgage community needs to know that this project is out there,” Boies says. “We’d like to be ahead of the next disaster so that people know that there’s help out there. And, when it does happen and once they’re at a point where they’re ready to chart the recovery process, [disaster-affected borrowers] know there’s someone out there who will help them.”
The reputation of MMI in the reverse mortgage counseling space will be a large component of spreading the word about the unique benefits that Porchlight can provide to disaster-affected borrowers, but awareness on the part of reverse mortgage lenders and originators is key to making the necessary initial connections.
“I’d like to see [the reverse mortgage industry] be knowledgeable about the program so that when a disaster strikes, they’ll have a resource they’ll be confident in for referring their [disaster-affected] borrowers,” Boies says. “I know we have to talk to some folks, but I’m banking on MMI’s great reputation already with the reverse mortgage counseling we provide, and this program is a natural extension of that.”
Find more information about Project Porchlight at MMI’s website.