Reverse Mortgage Services: OL Adapted to Educate Borrowers on COVID Relief

The $10 billion Homeowners Assistance Fund (HAF) is designed to provide mortgage borrowers affected by the COVID-19 coronavirus pandemic with financial assistance to keep their loans in good standing, with few conditions and departments implemented in each state. However, publicizing the availability of funds has been difficult for administrators, a truth that is also very apparent on the reverse mortgage side.

So say reverse mortgage service experts employed by Celink and Reverse Mortgage Solutions (RMS), respectively, in a presentation and interview at the recent National Reverse Mortgage Western Regional Meeting. Lenders Association (NRMLA) in Irvine, California late last month. .

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The HAF fund was created by the American Rescue Plan Act of 2021 and was a central pillar of President Joe Biden’s agenda when he took office. It was aimed at combating the economic turmoil caused by the COVID-19 pandemic and is offering $1.9 trillion in assistance to Americans in the form of direct cash payments, the expansion of unemployment programs and additional funds for a national vaccination program to fight the virus.

As part of the law — passed by Congress and signed by the president in March 2021 — $10 billion was earmarked for the HAF to provide direct relief to homeowners who had been financially impacted by the pandemic. Reverse mortgage borrowers are eligible for HAF funds, which can be applied to delinquent taxes or home insurance payments: two sums needed to keep a reverse mortgage in good standing.

Gail Balettie

Unfortunately, a slow rollout and lack of education on the subject has reduced the potential reach of HAF funds for reverse mortgage borrowers. When asked to raise their hands at the NRMLA event, service professionals Gail Balettie of Celink and Leslie Flynne of RMS/Ocwen Financial were disappointed by how few industry professionals gathered who described the knowledge of the availability of HAF for reverse mortgage borrowers.

“That’s why we’re going to talk about it,” Balettie said in response to the show of hands.

Flynne pointed to the generally easy path to at least beginning the process of getting monetary relief for reverse mortgage borrowers.

“I just want to tell you that [the HAF] is an absolute boon for people who have run out of money and can’t pay their taxes and insurance,” she said. “It’s a gift from the US government. All they have to do is apply, but unfortunately we can’t get borrowers to apply. It’s amazing, but what we need you to do [is get your affected borrowers to apply].”

Slow pace for putting programs online

One of the things that could affect the ability to serve the most impacted borrowers is the speed at which these HAF programs come online in different states. As RMD reported earlier this year based on a Texas Tribune investigation, Texas’ HAF program only went live after 25 other states had already implemented their programs.

Like Texas, other states took several months to implement their assistance programs after President Joe Biden signed the American Rescue Plan Act in March 2021. Other states with large populations, including New York and California, implemented their own programs in mid-December. Vermont launched its program in late January.

“All they have to do is attest to the fact that they had a COVID impact,” Balettie said of reverse mortgage borrowers. “They could have had a drop in income if they had a part-time job or had expenses. Maybe they were in the hospital or had family members who had a COVID impact. I mean, almost all of us have had some sort of COVID impact in our lives.

If an originator knows of a borrower in default on their reverse mortgage for taxes, insurance or other real estate charges, they should locate their state’s HAF program and apply for funds, Balettie added. The services have eased registration and the formalities needed to enroll in the 50 state programs, she added, but the results are very real for the borrowers involved.

“We did everything [the necessary registration], largely,” she said. “And I’m happy to say that while I attended this conference, we secured our first $150,000 and healed between seven and eight borrowers from foreclosure.”

Program details, how initiators can help

Flynne described how, in the state of California, the amount available to an affected borrower is $80,000. In New York, the total is $50,000.

“Every state is different,” Balettie added. “If you look at all the program guidelines [in each state], some of them even pay for wifi and utilities. But seniors don’t answer the phone when we call.

This is where reverse mortgage originators can come in. Since LOs often remain the primary point of contact for a borrower for sometimes years after a loan closes, they can be uniquely positioned to contact their past customers and advise them of HAF’s availability if they have fallen behind on their applicable taxes or other charges. .

“We did everything we could imagine,” Balettie says of getting the word out to reverse mortgage borrowers. “I’ve had HAF messages on my statements since January, we do outbound phone campaigns, we have it on our website, we do email campaigns, everything other than hiring carrier pigeons .”

Seniors can simply refuse to respond to these communications if they feel there is a chance that they are not legitimate. Loan officers, or other stakeholders who have an established relationship with borrowers, have the potential to make all the difference in terms of establishing a connection, the two men said.

Find more information about the fund at the CFPB.

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