Lenders that offer reverse mortgages can cut costs, gain efficiencies and help ensure compliance by migrating originations to the Internet. That’s because the popularity of reverse mortgages is growing among senior homeowners and their use of the Internet has been steadily increasing for years.
Today, 59 percent of seniors go online, an increase of 6 percentage points in just a year, and 68 percent of Americans in their early 70s go online. More than 50 percent of adults who are older than 65 were Internet users and 35 percent of them go online daily, according to an April 2012 study from the Pew Research Center.
Because there is a sizable and growing segment of reverse borrowers who regularly go online, this is an ideal time to offer them the choice of using the Internet to submit the documents required to originate a reverse mortgage. With a few minutes of explanation to senior borrowers, it is likely that many, if not a majority of them, will opt for supplying at least some of their loan documentation through the Internet.
One technology that provides the secure environment that more and more senior borrowers desire, as well as the efficiency gains that savvy, margin-squeezed lenders seek, is a Web-based borrower portal. Web portals present borrowers with a list of documents that their lender requires to complete a reverse mortgage transaction. Borrowers can securely upload the requested documents, download documents sent to them by their lender, monitor loan status, and exchange secure messages with their lender and other loan participants.
As a result, lenders save time and money obtaining documents and communicating with their borrowers, resulting in a higher level of customer service, which strengthens their relationships with borrowers and increases borrower satisfaction. After a document is uploaded to a lender through a borrower portal, one or more members of the processing staff receives a notification that the documents have been added to the borrower’s file. Lenders can also use borrower portals to request additional documents and borrowers are able to go online to track their loan status and stay up-to-date with document requests, statuses and messages without requiring a lender employee to take phone calls or respond to emails.
From the lender perspective, a borrower portal reduces the time that borrowers and lenders need to devote during origination, loan processing and underwriting. Borrower portals also increase the efficiency of document delivery and communication, especially when the borrower portal is supported with an advanced-document management and delivery system.
Regardless of the Internet adoption rate among reverse mortgage borrowers, some borrowers will prefer to do business with paper documents, overnight mail and wet signatures. That option remains available to them, though the reliance on paper is more expensive, slows origination processes, and leaves lenders vulnerable to regulatory scrutiny and hefty penalties if documents are misplaced or lost. For these reasons, lenders will do well to encourage reverse borrowers to use borrower portals. As time marches on and tech-savvy baby boomers become reverse borrowers, reverse lenders that don’t offer borrower portals will find that they will lose business to competitors that do.
Smart reverse lenders should offer borrower portals sooner than later so they have the opportunity to tweak their portals and related business processes before it becomes essential to provide such portals to capture tech-savvy baby boomers when they begin to flock to reverse mortgages in droves.
