Understandably, counseling is an element of the reverse mortgage transaction which has been noticeably affected by the outbreak of the COVID-19 coronavirus.
Reverse mortgage industry players at all levels often relate how senior clients prefer to conduct financial business transactions through face-to-face interactions, but given the recommendations and orders made by local, state and federal authorities up to and including the Centers for Disease Control and Prevention (CDC), those kinds of interpersonal connections are harder to facilitate while social distancing guidelines are in effect.
To that end, reverse mortgage counseling organizations are undergoing some necessary changes in how they do business, according to outreach conducted by RMD.
Business remains steady, with restrictions
The total impact on reverse mortgage counseling from the pandemic is predicated on the duration of guidelines put in place by authorities for social distancing, according to Jackie Boies, senior director of housing and bankruptcy services at Money Management International in Sugar Land, Tex.
“Since counseling is normally down-stream from the client’s research and initial discussion with a lender, our volumes will be directly impacted by the level of adherence to the requests to practice ‘extreme social distancing’ by other parties in the process,” Boies says. “We have been pleasantly surprised that the demand for reverse mortgage counseling has remained strong. Certainly many of these loans were in progress when social distancing requirements were put in place.”
While some reduction in volume is expected, the overall resiliency of the reverse mortgage industry to respond to crises is not in doubt, Boies says.
“Likely there will be reductions in volume, but lenders and other partners in the reverse mortgage business are resilient, and they will find ways to continue to assist our senior population with reverse mortgages,” she adds.
A high level of continued business has also been the reality for Jennifer Cosentini, housing director at Cambridge Credit Counseling Corp. in Agawam, Mass.
“Cambridge does nationwide HECM counseling so we have been busier than usual due to the reduction in interest rates caused by the coronavirus pandemic,” she says. “Cambridge has halted our traveling counselor services and we have limited staff working in the office.”
For counseling services that conduct a majority of their business over the phone, the overall impact on volume has been negligible according to Kathy Conley, stakeholder engagement specialist at GreenPath Financial Wellness in Farmington Hills, Mich.
“The majority of our reverse mortgage counseling is already completed by phone so there will not be much change here,” Conley says. “The [majority of] states that require face-to-face counseling already have an ‘opt out’ option so reverse mortgage borrowers can choose to counsel by phone, for example.”
In Massachusetts, where face-to-face counseling had been previously required without exception, there is continuing momentum on a bill that aims to relieve this requirement for the duration of social distancing guidelines related to the virus.
What originators should keep in mind
In terms of counseling elements that reverse mortgage loan originators should keep in mind during the coronavirus crisis, the importance of the measures put in place by CDC and local, state and federal authorities should always be front of mind, Conley says.
“The importance and effect of social distancing while counseling [is paramount],” Conley advises. “Be prepared to provide other resources that may be needed, beyond counseling, beyond loan origination, such as local services and resources which could be helpful to seniors who are homebound due to COVID-19.”
Limiting direct contact with clients as much as possible is also advised by MMI, according to Boies.
“Extreme social distancing is what will protect the health of our senior clients,” Boies says. “Lenders who need to move forward with loans need to explore all options for limiting direct contact. On the counseling side, we’ll continue to offer the counseling by phone as we do today.”
How counseling has had to change during coronavirus
Not only has the business of conducting counseling had to change to account for different requirements related to the effort of virus mitigation, but the counseling organizations themselves have had to undergo some changes because of the ways in which COVID-19 has affected the country.
“GreenPath has been amazing,” Conley says. “Not only are we taking steps to ensure the health and safety of our workforce, we are taking measures to provide services and resources for our clients, and to anticipate the needs of consumers as the economic toll of this crisis begins to be felt by many.”
It has also led to important realizations for those who are in close contact with the senior population at all levels of a reverse mortgage transaction, Conley says.
“The population [served by reverse mortgages] in particular has historically been financially vulnerable and is now medically vulnerable as well,” she says. “Being able to service them with empathy and care via telephonic counseling is not only a matter of convenience, but safety at this moment.”
In terms of operations at MMI, that organization was uniquely prepared for the occurrence that has taken place, according to Boies.
“As part of our normal business continuity plan, in 2018 we tested the pandemic scenario,” Boies explains about MMI’s preparedness. “We learned where we had gaps in our plan, since responses and capabilities are different in a pandemic than those of a natural disaster and fortunately we made some adjustments [at that time].”
That initial 2018 plan has allowed MMI to react quickly and decisively since the coronavirus has started affecting the daily lives of Americans.
“Today, we are very pleased that we did this test. It’s allowed us to react from day one and have a roadmap for moving forward,” Boies says. “That being said, this real-life situation is fluid and we will be making adjustments day-by-day.”
The company immediately put into place its own business measures to support social distancing, encouraging its counselors to work remotely by proactively ceasing any and all in-person counseling sessions.
“Fortunately, MMI has an experienced team of HECM counselors working remotely and providing counseling by phone, so we expect to be able to continue to provide counseling with few changes in our process,” Boies says.