Getting a loan closed is not as easy as it appears. In order to close loans quickly and efficiently it is important for loan officers to surround themselves with elite business partners. It is imperative that loan officers have a team which fits their mold and provides the same level of service. This team should consist of a DILIGENT PROCESSOR, an EDUCATED SETTLEMENT AND TITLE PROVIDER, a TRAINED REVERSE MORTGAGE NOTARY/ATTORNEY, a WELL-VERSED TRUST ATTORNEY, and a CREATIVE FINANCIAL PLANNER. Loan officers often refer to these individuals as the “band of five.”
By having a “band of five” in their network, loan officers will be able to get their loans closed without stress. No two loans or borrowers are alike and it is the loan officer’s responsibility to assist the senior homeowners in making the loan work.
For example, a loan officer was not able to get the loan to closing because their senor borrowers had not fully executed their trust and it was a lender requirement that the trust be signed prior to the loan documents. The senior borrower’s attorney had drawn up the trust but the attorney forgot to have them sign and notarize it. An easy solution would have been to have the senior borrowers contact the attorney or a notary to get the trust signed and notarized.
Unfortunately, the senior borrowers had been in and out of the hospital and were unable to find time to get the trust signed. The loan officer solved the problem by contacting a member of the “band of five,” their title company. One of the title company’s account managers had a notary license and offered to drive to the senior borrower’s home to obtain their signature at no additional charge. This is just one of the many instances where a valued business partner can assist a loan officer in finding solutions to their client’s needs.
When choosing a processor to handle reverse mortgage closings, the loan officer should be selective. Many senior homeowners haven’t obtained a mortgage in 30 years, so the processor must have the patience to communicate with the older, wiser homeowner who doesn’t understand the reverse mortgage process or industry jargon.
A reverse mortgage processor will have to be kind, caring, and understanding of the senior borrower who cannot locate a copy of their bank statements, trust, or death certificate. Many times, the reverse mortgage processor will have to guide the senior borrowers on what the documents look like so they can assist in locating what is needed to close the loan.
A reverse mortgage processor will get to know the family members of the elder homeowner and will have to learn to remain calm when they receive a call from a disgruntled heir asking why they are taking their inheritance. They will have to adjust to clearing all conditions prior to receiving the loan documents and assist in the coordination of scheduling the closing.
Typically, the reverse mortgage processor is the main point of contact throughout the transaction due to the fact that the senior homeowners get confused when they receive calls from vendors who have their private information. To prevent from upsetting a senior borrower, the reverse mortgage processor will work closely with title to help cure old liens, obtain the proper documentation to clear conditions, and scheduling the reverse mortgage closing. An efficient reverse mortgage processor will help loan officers close their loans quickly and allow them to do what they do best, bring in more reverse mortgage applications.
Choosing a reverse mortgage processor to be a part of the “band of five” is equally as important as electing a settlement and title company. First, loan officers would want to check to make sure they chose a settlement and title company that is on their reverse mortgage lender’s preferred vendor list. Next, loan officers should find out how many reverse mortgage transactions the settlement and title company has closed and they would also want to verify that the settlement and title has the ability to review trusts based on HUD, lender, and state guidelines. Also, a settlement and title company should be able to offer resources and suggestions to assist loan officers in getting their loan closed such as: counseling agencies, reverse mortgage experienced notaries/attorneys, and industry referrals.
In comparison to the conventional mortgage industry, the title and settlement company takes on a different role in the reverse mortgage industry. Their interaction is done behind the scenes and they have very little interaction with the senior borrowers due to the confusion it provides to the senior homeowners. However, that doesn’t mean they don’t have their work cut out for them. The settlement and title officer acts as a liaison between the loan officer, processor, lender, and notary/attorney.
The biggest obstacle the title company faces is old liens where a reconveyance hasn’t been recorded or the lending institution has gone out of business. Trying to locate a zero demand letter, paid in full statement, or copy of the recon can be difficult and can delay the closing. This is why it is so important that the reverse mortgage processor and settlement and title company have a strong relationship and can work together in a timely manner to get the loan closed. If the reverse mortgage processor can provide a complete copy of the trust and all of the amendments, bank statements, death certificates, homeowner’s insurance information, statement of information, borrower’s authorization, power of attorney, and final vesting (if it needs to be altered) then the settlement and title company can efficiently do their job and the loan officer can continue to do their job of bringing in more loans.
After all the conditions have been met and the clear to close has been issued, it is time to call upon another member of the “band of five,” the notary/attorney. A notary/attorney is an extension of the loan officer. They are the last person to contact the client before the loan disburses. A title company will do their best to elect a notary/attorney who has been trained on reverse mortgages but sometimes at the end of the month, it’s harder to schedule the most experienced notaries/attorneys.
However, if a loan officer has an established relationship with a notary/attorney and that person is a part of their “band of five,” the loan officer wouldn’t have to worry about whether or not their senior borrower had a question on their loan documents. The notary/attorney would be able to answer the senior borrower’s questions, or they would get the loan officer on the phone to address their client’s concerns. After all, the senior borrowers chose that loan officer to assist them in getting a reverse mortgage and they trust them with their biggest asset.
Other things to consider are the mishaps that happen on loans such as: the signer misses a signature or the senior homeowners are late for the signing, or the documents don’t arrive on time and the notary/attorney has to reschedule after they drove an hour for an appointment or the loan documents were incorrect and we have to redraw. The notary/attorney may want to charge additional fees for the extra work, mileage, or time. If the loan officer had a relationship with a notary/attorney who understood that people make mistakes and that it is not the senior borrower’s fault, the notary/attorney might be more willing to work with the loan officer on adjusting their fees.
It is important to stress the fact that if a loan officer can attend their closings, they have a 99.9 percent chance that the borrower won’t rescind. Realistically, a loan officer can’t always attend the signing because they are either writing another application or spending time with their family. Business is based on referrals so a loan officer better make certain that if they can’t attend the reverse mortgage closing, the notary/attorney who is representing them knows and understands reverse mortgages.
Now it’s time to focus on the professional partners; trust attorneys and financial planners. A trust attorney who is well-versed in reverse mortgages is essential to the success of a loan officer. The trust attorney will be able to offer assistance by drawing up a trust for senior borrowers, providing an attorney opinion letter when required by the lender, amending the trust to reflect only one beneficiary, providing a letter to state that the property lies in the revocable portion of the trust, an instruction and a deed to remove the borrower from the irrevocable trust, and assist in addressing senior borrower’s concerns about how a reverse mortgage will affect their trust. A lot of senior homeowners don’t have a trust but they are interested in creating one for the purpose of avoiding probate for their heirs should they pass away.
By including a trust attorney in the “band of five,” loan officers can refer their clients to a trusted attorney who they know will treat them with care. Also, since the trust attorney is well-versed in HECM/HUD guidelines, the loan officer won’t have to worry about the attorney including verbiage in the trust that would prevent the senior borrowers from obtaining a reverse mortgage loan.
Another scenario that might occur would be if the senior borrower can’t locate a copy of the trust and the vesting clearly reflects that they hold title in an irrevocable trust. At the trust attorney’s discretion, they can provide an attorney opinion letter to have the senior borrower removed from the irrevocable trust. A trust attorney can be a saving grace when a loan officer is faced with a deceased borrower and the property is in an “A and B” trust. A trust attorney can come to the rescue by providing the senior borrowers with an attorney opinion letter stating that the property lies in the revocable portion. A trust attorney is a great ally because not only are they helping the senior borrowers, they are a great referral source for the loan officer.
An additional referral source and trusted advisor is a financial planner. We have all heard about the nightmare loans where a broker was sued because they sold a senior borrower an annuity along with a reverse mortgage. They may have thought they were doing the senior borrower a favor or they may have just been greedy. If the loan officer had only suggested that their senior borrowers seek the advice of a financial planner, they wouldn’t have been put in that predicament. A financial planner can offer solutions to a senior homeowner that a loan officer cannot. For instance, if a senior borrower has a spouse who is not 62 years of age, that spouse cannot be on title to the loan. This may prevent the senior homeowner from going through with the reverse mortgage because they are concerned about what will happen to their spouse once they pass away.
One situation that may occur is the non-borrowing spouse could lose the home if they are not able to refinance the reverse mortgage with either another reverse mortgage or a conventional loan. Also, depending upon the state and how the senior homeowners are holding title, the non-borrowing spouse may have to go to court to claim their inheritance due to probate.
In order to put the senior homeowner’s mind at ease, the financial planner may offer some suggestions to protect the interest of the non-borrowing spouse, such as a life insurance policy. A financial planner can also be a resource when senior homeowners have concerns about how a reverse mortgage can affect their taxes or Medicare benefits. For instance, a loan officer advised a senior borrower to remove the property from the trust. Changing the vesting on the property affected the look back period on the senior borrowers Medicaid benefits and the senior borrower was not happy. There are many different scenarios and each borrower is different but choosing a financial planner that has the proper accreditation to work with seniors and making them a part of the “band of five” can only help loan officers achieve their goals of being the best.
It is well known that the most successful loan officers have strong relationships within the reverse mortgage industry. Loan officers can’t close these loans on their own; they need help. It’s a necessity for loan officers to work with business professionals that can assist in growing their business. The “band of five” must share the same morals as the loan officer and want to achieve the same goals; closing loans quickly, efficiently and professionally.
 Alissa Scott has been an employee of Premier Reverse Closings since August of 2004. Ms. Scott started her career at PRC in Southern California and now resides in Long Island City, NY developing and managing the entire East Coast.
|
|
Subscribe
Click on the icon below to subscribe to our RSS feed
Articles from Our Latest Issue
|
