This article is sponsored by Notaroo. In this Voices interview, Reverse Mortgage Daily sits down with Notaroo founder and CEO Todd Ausherman to learn why the reverse mortgage closing process can be overwhelming for borrowers, how technology can “calm the chaos” and why a smoother, safer experience for all involved is right around the corner.
Reverse Mortgage Daily: You founded Notaroo in May 2019. What career experiences do you most draw from to guide you as CEO of Notaroo?
Todd Ausherman: The experiences that I draw from really stem from my 15 years in management of loan origination teams in the reverse mortgage space. Specifically, I draw from the size of those teams, everything from a single employee to managing teams of over 200 loan originators. I found that when it came down to our processes and being able to deliver the most value for our borrowers, there was always a missing link.
The missing link always seemed to point to the borrower signing process. There was always an issue after we would hand over the documents and our vision into the process would go dark. We didn’t have control or oversight of what was occurring between the notary and our borrower, and we couldn’t fully understand the borrower’s experience and whether they were getting the service levels that we expected from our loan originators.
This created significant frustration for us, as the lender, as well as for the borrower. That pain is what led me to begin this journey, called Notaroo, to provide the solution.
Tell us about Notaroo. What did you see that led you to start it?
Even before the issues of insight into and engagement with the signing process, it was the overwhelming amount of paper in closing the reverse mortgage. When you have that much paper involved, it creates a lot of opportunity for little mistakes to become big mistakes. Missed signatures, not having forms filled out correctly — all those things compound when you’re at a deadline. Those little mistakes can become major issues for our borrowers not even being able to get the loan that might save their home or, potentially, their financial future.
The other driving motivation was around security. One of the most common and, frankly, disturbing processes is the distribution of private and personal borrower information and documents by email. There’s not nearly enough uniformity or governance in how private information and personal documents are being handled during the signing process. It was my intent to raise the bar in providing borrower — and signing agent — security, to prevent identity fraud.
Let’s get into the specific parties in the reverse mortgage process, starting with the borrower. Tell us about the senior’s experience as it stands now.
I think that the best word to describe the borrower’s experience is disjointed. I’m not inferring that every borrower’s experience is disjointed, but it’s a process that certainly depends on a lot of factors. What is the mood of the signing agent who is going out to the borrower’s home? How well coordinated is that visit? Does everybody understand what’s happening and what’s being signed and what paperwork is involved and what all those terms mean?
The next critical party in the process — the loan originator. It’s equally disjointed and inconsistent from their perspective as well.
To counter that, they will attempt to maintain consistency throughout so much of the process and build a relationship with the borrower. That’s the thing about the reverse mortgage space: When you’re originating reverse loans versus most other types of loans or mortgages, there’s an incredible bond that forms between the person working with that borrower to resolve whatever financial difficulty they have and the borrower themselves. Given the skepticism and misinformation that is circulated around reverse mortgages, the LO has to work extremely hard to protect the relationship.
So even though as an originator, you can maintain a high level of touchpoints and service for that borrower, when it comes to the end, you’re now on the sidelines. Sometimes you don’t even know who this person is that you sent out to your borrower’s home and you’ve never spoken with that person. You have no idea how that’s going to go.
Sadly, there are a lot of issues that pop up as a result of that. That disjointed and fractured nature of the process is what we’re laser-focused on solving.
How about the experience of the notary, the lender, and the title escrow company? What is the experience and where can it be smoothed out?
The experience is pretty chaotic because you have several different parties, all with a common goal, but communicating quite inefficiently. It becomes a game of telephone at times, with issues on the borrower level — the borrower will tell their notary that there’s an issue with the signing, the notary will tell the notary management company, the notary management company will tell escrow, escrow will tell the processor and the processor will tell the loan originator. You have all these different touchpoints that get extremely chaotic.
At the end of the day, there’s a face-to-face experience happening between the borrower and that signing agent. Trust, especially with the particular demographic that we serve on average, lies in face-to-face. When you combine disjointed and fractured processes with the potential of chaotic communications, trust begins to wane. This experience occurs, not just on the borrower side, but that mistrust and that feeling of chaos becomes the experience of all parties.
The loan officer is mistrustful of the process because things aren’t happening the way they’re supposed to happen. The escrow company becomes mistrustful of the process because something went awry. The notary is frustrated because something that was supposed to be communicated wasn’t communicated. The borrower is frustrated, obviously, because they’re the ones who have their livelihood on the line.
Where is there opportunity to smooth out this process? I think it’s pretty clear that it’s in the communications. If Notaroo can stand in that gap of communication — expressing expectations to each party in the process — the level of trust and confidence can be restored.
What does Notaroo do to calm this chaos?
The idea behind Notaroo is to bring as much calm to the chaos as we possibly can. That’s our overarching core value, and really, the fundamental driver behind every decision we make as a company. The way that we do that is through training and education with our notaries as well as with our lender and escrow partner clients. That’s become especially important as we talk about the nuances of the reverse mortgage loan. Then, certainly, when you add in the COVID-19 pandemic, it again becomes an area of mistrust and chaos.
Practically speaking, we spend a lot of time on an individual level, speaking with our notaries about what they can do to maintain that expertise in the reverse mortgage process. We provide training to educate them on the common areas that get missed in this often intensive process. We also make sure that our notaries understand the clients or the borrowers who they are meeting, and how important this decision is in their lives.
For the lenders, we work to customize how they would like their document signed, as each lender has a bit of a nuanced process. We go so far as to making sure that the person signing those lender documents with the borrower has been trained on those requirements. And of course, we work to keep the lender informed of status changes throughout the entire process, to ensure that they have the visibility that I was lacking when this need became so apparent.
What are the key areas in which technology, from your view, can be improved upon in the reverse space?
Communication, visibility and security — in documentation and then in the way that this pandemic has caused us to rethink processes which affect health when attempting to perform things like document signings when physical limitations are presented.
Communication technologies allow us to loop everybody into these events so everybody can be very readily available when problems arise. We think that’s a big piece that our technology is offering to our clients.
The other big piece is security and timeliness of documentation. It is an important synergy of technology and customer success to ensure vital closing documents are ready to go — executed by the borrower and delivered to the lender in a timely manner. We also ensure that the distribution method is safe and that we’re not exposing any of our borrowers to undue risk of what could easily occur for unprotected file transfers of extremely important documents.
You’ve mentioned COVID-19 — what are the benefits that your process brings to challenges related to the pandemic? And how will those benefits extend when we’re out of this?
COVID-19 has been absolutely terrible for the country as a whole, and impacts the reverse space directly, because we’re creating contact potentials by sending agents to the homes of borrowers over the age of 62. So it’s created challenges, but it’s also created a recognition that there are technologies that can be utilized to help solve this problem. A lot of that has to do with more of a reliance on e-documents, as well as audio-video communication.
Even though the reverse industry hasn’t yet embraced all of those technological pieces, we’re excited to help solve these challenges. We think that within the context of COVID-19, there will be chances for us to learn from the different technological advances that are affecting us all. We want this technology to be more readily adapted and usable in the reverse mortgage space, and to continue to build on that over and over as time goes on.
We don’t believe — even after we’ve returned some level of normalcy — that we will go back to the way things were. I truly believe that our industry needs to improve these processes with or without the presence of a pandemic. And since we aren’t eliminating the human engagement and oversight to the process, we believe that this will garner the trust from our partners needed to make these changes a part of the norm for the days to come.
2020 was a year of unprecedented challenges, what makes you hopeful about the reverse mortgage industry for 2021?
I think the vibe that is absolutely present in the industry right now is understanding that technology is our friend. As the industry starts to understand that there’s a lot of good technology out there, it will help resolve these frustrations and problems faced by borrowers.
We’re here to layer in those pieces of technology in a way that’s not scary for the borrowers or the industry participants. That’s where a big consultative approach has been hugely beneficial, to help everyone involved identify what pieces of technology can be used, and how they can be used without being overly burdensome and creating extra work or security risks. This helps remove some of the mistrust for the reverse mortgage borrowers as a whole. In short, 2021 is about the embracing of hope.
Editor’s note: This interview has been edited for length and clarity.
Notaroo is an on-demand notary service that helps the key stakeholders in a reverse mortgage transaction communicate more effectively and removes friction from title companies by relieving them of a significant burden. To learn more about how Notaroo can help your process, visit getnotaroo.com.
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more — shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected].