Recently I wrote a post about the difficulties our industry is experiencing with borrowers who have trouble paying their taxes and insurance after closing on a reverse mortgage. It's anticipated that this challenge may increase in the coming years as many seniors have recently opted for the fixed rate reverse mortgage product, and all the available funds are taken at once. In addition, many seniors are paying off sizable existing mortgages, which increases cash flow, but they may be accustomed to having those taxes and insurance payments made through the escrow account in the mortgage. We always talk about educating our clients throughout the process of obtaining a reverse. Shouldn't we continue that education after closing and beyond?
What is our responsibility as originators over the long term with these borrowers? Are you just closing the loan, taking the commission and running? Or are you positioning yourself as a true reverse mortgage expert and keeping in touch with these clients to be sure they are still satisfied with their decision? Be sure the current plan selected (LOC, monthly check) is still meeting the borrower's needs. Remember, the average life of a reverse mortgage is currently only about 7 years, but how long does it take you to forget the borrower? Don't discount the potential referral business that these satisfied clients can provide if you keep in touch with them and continue to ask who among their friends and neighbors may benefit from your help. Just as the senior borrower acts when something has changed in their life and the reverse mortgage becomes front and center, the referral opportunity comes to mind when a friend or neighbor of the senior mentions a financial challenge. That happens on their time, not ours.
If you are sending newsletters, you are always looking for content, right? Why not include a short piece on a quarterly basis that reminds your clients about the importance of keeping taxes and insurance current? Encourage them to call you with questions about their statement (I'm sure you are performing an annual reverse mortgage review) and even suggest they look into a reduction in their real estate tax bill if it is available in your area. Some states offer some level of reduction based on income. Call the servicing department of one of your lenders and speak to a manager in the customer service department. Find out what questions they are hearing on a regular basis (I have done this before in an effort to be pro-active with my senior clients).
Don't let your reverse mortgage clients run into trouble because they can't pay their property taxes and/or insurance. It can become a serious issue but as long as we continue to educate our seniors, we can help many avoid this problem.
Sue Haviland is a reverse mortgage consultant in Baltimore and the founder of Reverse Mortgage Success, a leader in the training and education for originators around the country in the rapidly growing reverse mortgage arena. Sue has worked in the lending industry since 1981. She has been originating reverse mortgages for the last six years and still originates loans every day. She has helped hundreds of families all over the country in the last several years. Sue also shares her knowledge of this market in presentations before the Women's Council of Realtors, Mortgage Bankers Association, National Association of Professional Mortgage Women, and SRES - Senior Real Estate Specialists, Brian Sacks' Insider Seminars, as well as the public. Sue is a Certified Senior Advisor and is active in many professional organizations. Sign up for her free seven-part mini-course at
