The reverse mortgage industry is taking a series of major steps in order to prepare for the full impact of the coronavirus pandemic, mobilizing working groups, changing or amending company policies to encourage social distancing with borrowers and employees, and seeking new regulatory relief in order to ensure that continuity of business is maintained for the duration of the current crisis.
This is according to a “town hall” webinar hosted by the National Reverse Mortgage Lenders Association (NRMLA) on Monday afternoon, featuring industry leaders at both the association and some of the major reverse mortgage lenders.
‘Borrowers are in the eye of the hurricane’
Keeping borrowers and their financial situations at the forefront is a priority for the entire reverse mortgage industry, and making sure that the business is aware of the unique risk that the current crisis presents to borrowers is critical. This is according to Scott Norman, , VP of Government Relations at Finance of America Reverse (FAR), and co-chair of NRMLA.
“These are very unique circumstances that we’re all trying to manage through,” said Norman. “We want you to be fully aware of what we’re working on, but we’re absolutely open for business and very aware of the issues affecting the industry. We have multiple war rooms, and NRMLA is your association and you can count on us. Literally every one of our borrowers are in the eye of the hurricane.”
Reza Jahnagiri, NRMLA co-chair and CEO of American Advisors Group, also related the importance of being engaged while reinforcing the service that the reverse mortgage industry can provide to seniors that have been affected by the current crisis.
“We’re critical to the new economy on the other side of this, and the interim crisis dynamic we’re very critical to is not going to change,” Jahngiri said. “People need to access their home equity and to have access to their assets. That’s to be able to weather the storm here, especially when their incomes, their 401Ks and their savings are being hit really hard right now as we speak.”
Additionally, many of the people who need the most help right now are within the primary demographic that the reverse mortgage business serves: seniors, he said.
“So, [our role in this crisis] is even more heightened in terms of specifically reverse mortgages than even the broader lending market,” he said. “And I think the way we’re looking at it, it’s about making it through to the other side.”
Impacts on company operations
Leaders of several major lenders including AAG, FAR, Longbridge Financial and Liberty Reverse Mortgage shared with the audience of hundreds of reverse mortgage professionals that the companies are taking appropriate steps to ensure that borrowers and employees alike will not have their safety negatively impacted by the companies’ efforts to maintain continuity of business. All the major lenders, for instance, have facilitated remote work for the majority of their employees.
“A tenet to keep in mind is to plan for the worst, and know that it’s okay if the outcomes are better,” said Jahnagiri. “That’s in cost reduction, and we need to maintain continuity of business, while moving our workforces remote. State and municipality orders are moving very fast, and the majority of the country has guidance for staying in place. That’s changing how we behave as a business.”
Mike Kent, president of Liberty Reverse Mortgage, also shared that the vast majority of the company’s workforce has transitioned into working remotely, while also heeding guidance from both the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) to develop some key best practices to observe.
“In addition to social distancing, we’ve moved approximately 80% of our workforce to work remotely,” Kent shared. “We continue to work at 100% efficiency, and we take business continuity planning very seriously as part of a public company. In addition, we’ve developed best practices for all vendors. I suggest you reach out to your vendors and determine what their practices are in terms of customer priorities and social distancing.”
FAR has moved between 90-95% of its employees to work from home according to company president Kristen Sieffert. While many of the operational issues that reverse mortgage companies are currently facing can be troublesome, there is at least some assurance that problems will be resolved since many of the issues are also being endured by the traditional mortgage business, she says.
“County recorders, appraisers and notaries are presenting issues on the reverse side,” Sieffert said. “The good news is that most of the operational reverse issues are the same issues being experienced in the traditional mortgage industry, so there is a huge set of people working day and night to make sure that loans will still be flowing through the system.”
Maintaining proactive borrower outreach also needs to remain a priority right now, Sieffert says, since the reverse mortgage industry serves a population particularly vulnerable to the effects of the coronavirus and making sure their needs are met must remain a paramount concern.