Sanitized Docs and Curbside Signings: How the Reverse Mortgage Closing is Changing

Because of the federal regulations regarding reverse mortgage closings, this important component of the transaction is one that requires in-person meetings and verifications that may be made more difficult by the active social distancing and virus mitigation guidelines in effect due to the COVID-19 coronavirus pandemic.

While the current situation has created a series of new difficulties for reverse mortgage closings, there are also benefits that have emerged related the additional incoming inquiries and higher level of Home Equity Conversion Mortgage (HECM) business. This is according to Ami Kellogg, president of Premier Reverse Closings (PRC) based in Roseville, Calif.

Managing new working conditions

While shifting to a more broad-based work from home plan, PRC had already taken steps in previous years to make a transition toward remote work even easier, Kellogg tells RMD.

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“Our American Land Title Association (ALTA) best practices we had already put in place years prior to COVID-19 allowed us the ability to work remote efficiently,” Kellogg says. “The use of the ResWare platform has been a huge benefit to our remote work. The staff that work from home chose the decision to work remote mainly due to childcare issues and/or their school age children sent home to distance-learn due to school closures.”

Still, the necessity of having personnel in the office does not go away for closings, but PRC has taken additional steps to ensure the safety of their employees in accomplishing the tasks that still need to happen on-site.

“Half of our staff must work in the office in order to receive loan packages, scan and disburse files,” Kellogg says. “We have a great group of close-knit employees. We miss our co-workers and look forward to the day when we are all back in the office working together.”

Among some of the day-to-day changes that have occurred inside the PRC offices, hand sanitizers are made available and frequent hand washing has been added to an hourly list of required tasks. The company has also invested more in janitorial services and supplies to facilitate extensive cleaning every evening. All loan packages are also individually sanitized when they arrive in the office, and all packages are handled with gloves and allowed time to fully dry before being handled again.

“We’ve also observed an uptick in post-close phone calls from borrowers,” Kellogg says. “Everyone seems to be cleaning out their closets and ‘important paper’ stacks.”

Online meetings have also become the new norm, which has been challenging for some but continues to allow substantive interaction between employees to accomplish what is needed during this time.

New challenges presented by coronavirus

On top of the changes that the PRC offices and employees are undergoing as a result of this crisis, there have also been some other challenges that have been observed in accomplishing the work behind reverse closings, including a noted increase in attempted wire fraud, Kellogg says.

“We were subject to a fraudster attempt to divert loan payoff funds,” she tells RMD. “The best practices we have in place and an experienced PRC Disbursement Lead caught the bad guys! Phishing emails are also higher than ever, so people should be cautious and careful.”

There were also issues in the early days of the national emergency with county recorders being closed, which was a particularly unusual thing to observe for Kellogg.

“I have been in the title and escrow industry for 41 years, and never recalled the recorders closing other than for national holidays,” she says. “Thankfully, ALTA came to our rescue. I applaud ALTA for their quick response in creating and providing their website, which reports on all localities across the nation. There are thousands of recorders across America, and ALTA committed their resources to provide daily updates.”

In terms of notaries, PRC has endured very few declines, Kellogg says, though there were some increases in fees early on.

Curbside signings are being used. Remote Online Notarization (RON) and Remote Ink-Signed Notarization (RIN) are the topics of conversations and webinars. We have not yet had any requests, but PRC is prepared and ready if and when said request is made.”

2020 outlook

When it comes to determining what the outlook is for the remainder of 2020 in terms of reverse mortgage closings, Kellogg relates that she was concerned after learning that some major lenders had announced either changes or suspensions to some of their proprietary reverse mortgage offerings. However, there is now a more immediate and positive reality.

“Our HECM orders have increased, and I anticipate a better-than-projected order count for 2020,” Kellogg says. “The increase in orders will also allow us to hire additional staff.”

She also expresses appreciation for the staff of both the Federal Housing Administration (FHA) and the National Reverse Mortgage Lenders Association (NRMLA) for their continued work during this time.

“Their communication channels are very informative and have helped us adjust our business plan,” she says. “I encourage everyone to attend the NRMLA Town Hall webinars and review the FHA emails and webinars.”

In the end, the current crisis stemming from the pandemic has brought many new challenges, but has not been without opportunity for both PRC and the reverse mortgage industry at-large, Kellogg says.

“I have seen many new opportunities these past six weeks, created by strong communication, staying positive and caring for each other,” she says. “We are essential. Together, we can do this.”

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