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Reverse mortgage industry adjusts to COVID-19’s Omicron variant

In light of the more virulent “Omicron” variant of COVID-19 – which appears to spread more easily while generally leading to a more mild illness, particularly for the vaccinated – RMD reached out to several reverse mortgage industry companies including lenders, brokers and the trade association to develop a picture of how the business is grappling with rising case numbers in recent weeks.

Considering the impact that the COVID-19 coronavirus pandemic has had on business globally, the reverse mortgage industry is more fortunate than most. Since the product serves the senior demographic and helped to offer additional options for both aging in place and the potential for establishing greater financial security, 2020 was generally seen as a productive year for the business ahead of 2021’s boom largely catalyzed by record home price appreciation, low interest rates and reverse mortgage refinances.

That does not mean, however, that the industry and its operations are unscathed by the health crisis that the world has been coming to terms with for nearly two years now. While the pandemic may have caused more seniors to consider reverse mortgage options in order to tap into their home equity or to avoid congregate care settings, the pandemic’s impact on seniors is pronounced and naturally extends to an industry that is solely dedicated to serving it.

According to data compiled by the New York Times, the surge may be slowing. The national average of new cases hit a recent high of over 800,000 on January 14, but sits at 589,225 as of January 27.

Staffing issues stemming from Omicron

One company that has experienced issues in staffing directly related to the Omicron-fueled COVID-19 surge across the country is Orange, Calif.-based Ennkar. Unfortunately, company employees have not been spared from the greater ability of the Omicron variant to spread according to Omar Ennabe, co-founder and branch manager at Ennkar.

“Yes, we have experienced staffing issues as a result of the surge,” Ennabe told RMD. “Many of our associates have contracted the latest variant of the virus or come in contact with people that have tested positive. As a result, the office is rather empty.”

Omar Ennabe

These staffing issues have led to a delay in the processing, closing and funding of certain reverse mortgage loans, Ennabe said. However, preparation for pandemic disruptions made early in the ordeal allowed the company to weather some of these issues more effectively.

“The positions impacted are mostly positions related to mail or document receipt that require someone in the office to scan and upload onto our cloud servers,” he explained. “Some good news is that at the beginning of the pandemic in March 2020, Ennkar invested quickly and heavily in mobilizing our workforce and allowing many of them to work remotely. We moved to softphones, laptops, cloud-based servers, etc. This allowed us to operate most positions without the need for the office.”

At industry-leading lender American Advisors Group (AAG) – which now operates on a hybrid workforce model – staffing issues have managed to be entirely mitigated according to a company spokesperson. This has led to a more generally cautious posture on the number of employees present in on-site offices.

“For our on-site employees, we’ve continued with the same safety protocols that were put in place at the start of the pandemic,” the AAG representative said. “However, after moving nearly all of our employees to a remote setting in 2020, we have since adopted a hybrid workforce model and a large percentage of our employees have continued to work from home.”

Omicron’s surge has led to the allowance of employees on-site deemed “essential” only, the representative said.

“Essential employees have daily wellness check-ins to ensure the safety of our staff,” the spokesperson explained. “We’ve made updates to our policies for positive and close contact employees to align with the CDC, and we’re closely following the guidance from the California Department of Public Health for our headquarters. All essential employees are required to wear a mask when in the building and we’ve added additional disinfecting wipes provided for shared spaces.”

Impacts on reverse mortgage client relations

Reverse mortgage client relations also been impacted by the spread of the Omicron variant. Considering that seniors have been disproportionately impacted by the development of serious illness stemming from any variation of COVID-19, more general caution has been more of the norm as opposed to the exception according to Ennabe.

“There most certainly has been a change to the way these interactions take place since the start of the pandemic,” he said. “Associates are encouraged to use the conference room or break rooms as opposed to their offices when meeting with clients. This allows them to be better spaced out as the rooms and tables are much larger in these areas.”

For AAG, the company has instead focused on the implementation of different forms of technology to take the place of in-person meetings for any senior who may be unable or unwilling to sit for a face-to-face meeting, and generally speaking seniors have only grown more comfortable using technology for this purpose since well before the Omicron spike.

“We’ve seen a growing trend of seniors being more comfortable using contactless technology, especially the younger Baby Boomers,” the company spokesperson said. “Older Americans are more confident with innovations like video conferencing, E-documents and programs such as our My AAG Loan portal. Some have even expressed that they prefer it over traditional communications.”

Several other leading reverse mortgage lenders elected not to comment on their efforts when reached by RMD.

NRMLA response to the Omicron surge

NRMLA President Steve Irwin

When reached for perspective on how the National Reverse Mortgage Lenders Association (NRMLA) has been responding to recent pandemic issues, the industry is encouraged to follow any and all necessary health safety guidelines.

“The overwhelming surge in COVID cases is alarming, and I would urge NRMLA members, and the seniors they serve, to continue to operate with all prudent safety precautions,” said Steve Irwin, the association’s president.

In terms of NRMLA’s own operations, the impact has not been pronounced since the organization can still connect with important contacts through largely digital means, Irwin explains.

“We continue to arrange meetings with persons on the Hill, as well as with HUD and other state agencies and legislators through virtual/video channels, as well as teleconferencing,” he says. “This will be an operating reality for the foreseeable future, and has not impeded our ability to continually advocate on our members’ behalf.”

For NRMLA staff, in-office capacity remains limited and the schedule rotates between people who will work from home, or from the association’s offices. Ensuring the health and safety of its employees is a top priority, but Irwin remains optimistic, he says.

“Naturally, we continue to monitor the local safety guidance and amount of community spread,” Irwin tells RMD. “It’s a tough time, but I remain optimistic that we will turn the corner on this pandemic sooner rather than later.”

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