CONGRATULATIONS! YOU’VE MADE IT THROUGH rounds of family member and financial advisor meetings; you’ve met with loan officers, processors, underwriters, counselors, closing/title agents, and your reverse mortgage has now closed. These first points of industry contact have formed and framed your reverse mortgage experience and you should take comfort and have confidence that you are being served by an ethics-driven industry with a real passion for its product and borrowers. You’ve worked a lifetime for your home, and now your home is going to work for you. Welcome to servicing!
No doubt you’ve discovered that forward mortgages differ in many ways from reverse mortgages and our servicing responsibilities reinforce those differences. As a rule, “forward” mortgage borrowers rarely interface with their servicer unless there is something wrong, and it’s likely you’ve held several forward mortgages throughout your lifetime. Servicing functions, for the majority of reverse mortgage borrowers, will proceed without incident for the life of the loan. For others, telephone calls to a service center may initiate shortly after the loan is closed and may continue for the life of the loan. Reverse mortgages will typically be held through retirement and the remainder of a borrower’s life – both of which are being re-defined and extended every day.
Let’s move forward in the typical life cycle of your reverse mortgage. Your loan gestated in origination, was born at closing, and will live its lifetime within the servicing function. When servicing receives a loan after closing, we know we are being entrusted with a valuable asset that will be in our possession and care for a number of years. Within the life of your loan, you will have several touch points with your servicer.
These touch points begin with servicing’s initial contact with every new borrower. Some servicers find it useful to provide information to new borrowers with answers to frequently asked questions and an overview of their responsibilities once the loan has closed. In addition to welcoming borrower(s) to the reverse mortgage experience, servicers will answer all of the common questions that arise post-closing (as well as those raised by well-meaning relatives and friends!). The importance of trust and sensitivity on the part of your servicer as the loan moves forward from closing cannot be underestimated, and should never be undervalued.
Shortly after monthly statements are mailed, your reverse mortgage customer service center may be inundated with borrower inquiries. Servicers make it a goal to treat every caller with respect and give each inquiry the full attention it deserves. Our experience demonstrates that reverse mortgage borrowers are attentive to detail, will ask about anything they do not understand, and demand full explanation(s). Professional servicing representatives stand ready, willing, and able to assist your servicing needs.
If your property requires repairs after closing, time will be spent in education on the process and your obligations under the Repair Rider. Frequent phone calls and letters may be generated back and forth between you, your contractor, and HUD-certified inspectors. These efforts assist each of our borrowers in completing repairs. It is not uncommon to find remodeling companies attempting to talk borrowers into additional (and possibly unneeded) repairs, and it is not uncommon for repair invoices to come in higher than the original quoted bid. In either of these situations, reverse servicers are responsible for working with you, and your contractor, to resolve these issues amicably.
As a borrower, you are required to certify occupancy after the first year of the loan and every year thereafter. This should be a straightforward and simple process: your servicer will mail a letter and you will return a signed certification confirming the home is still your primary residence. Please don’t view this contact as an intrusion! It is a critical step to confirm that you continue to meet the requirements of your mortgage that you agreed to at closing.
You are responsible for maintaining regular and timely payment of the taxes and insurance on your property. When, and if, a borrower has no resources for taxes or insurance, servicers are faced with a very complex and delicate situation. Some borrowers have family members who can help them and some have financial reserves outside of their reverse mortgage. Unfortunately, there will be a percentage of reverse mortgages that represent borrowers with limited resources. Servicers will work diligently with these borrowers to resolve the default and respect each borrower’s dignity. Life happens – and servicers are here to assist you when things don’t go according to plan.
The death of a borrower is, without a doubt, the most difficult and traumatic situation a servicer has to deal with. Servicers work with grieving family members who run the gamut from needing gentle hand-holding and advice about their responsibilities regarding the loan, all the way to working alongside heirs for up to a year to properly dispose of the property (in the event that the last surviving borrower has passed away). The servicing personnel that manage this process have the patience of a saint and the sensitivity and compassion of a funeral director. Your family members will not be alone when this time comes.
Please be assured that when your servicer takes on your loan, we are charged with being the calm, reassuring voice of the industry; your monthly point of contact for all things relating to your loan, and the helpful hand you or your family will hold during times of challenge, grief, and transition. Our goal is always to make your reverse mortgage experience one that you’re willing and excited to share with others. Our name is our promise: we are at your service. What can you expect after your reverse mortgage closes? Expect the best.