When borrowers obtain a reverse mortgage to access home equity, their lenders take a substantial interest in their homes. More often than not, and unbeknownst to many homeowners, zoning requirements and standards of safety and operation have changed in the years their home has been occupied. Small repairs that may have been put off for years now become requirements for closing. For the majority of borrowers, doing these repairs and bringing their homes into HUD compliance comes as a relief. For some, this closing requirement feels intrusive and unwarranted.
Repair administration is a critical aspect of the reverse mortgage process. When a borrower applies for a reverse mortgage, an appraisal provides the lender and borrower with a full assessment of the property’s liabilities and assets. The structure must be brought up to code and put in good and proper repair prior to closing. Repair administration professionals oversee the process of a borrower bringing his home up to code and in full and safe working order. Servicing professionals in the repair administration department walk a tightrope between vigorously protecting the lender and HUD’s interests in the property while respecting and protecting the borrowers. In the best of circumstances, the process moves smoothly and without incident, and repair administration professionals will appear to glide across this wire.
After closing, the only time a borrower will encounter the repair administration department is if and when an insurance claim is made on the property for damages (commonly referred to as “loss drafts”). Servicing departments protect their clients’ interests and serve as the liaison between the lender, the borrower and the insurance company. What happens when natural disaster strikes, HECM properties are impacted and countless insurance claims are made at once?
Celink’s repair administration department revisited this experience when Hurricane Matthew and the recent flooding in Louisiana wreaked havoc throughout the South. Natural disasters throw the best people, places, systems and processes into disarray. Celink borrowers were impacted in great numbers by these instances. Phone calls were nonstop and borrowers were in a state of shock; they simply could not fully grasp what had just happened. They didn’t want to hear about procedures—they wanted their homes restored and their sense of safety returned. Repair administration professionals were charged with balancing borrower interest (“Get me back in my home!”) and protecting client interest.
Meetings were held to remind staff that while the workload was obviously overwhelming at times, and phone calls seemed to lead to upset borrowers rather than resolution, it was clear that making everyone happy might not happen right away. It was critical that the team be reminded that what it was going through could not possibly compare to what borrowers were going through.
In the aftermath of any natural disaster, repair administration professionals provide critical assistance to borrowers at a time when they are most vulnerable. Everything they know about “normal life” feels lost, and servicers are charged with helping piece borrowers’ lives back together. Repair situations are never black and white; there are huge gray areas, and sometimes procedures need to adjust slightly in order to create the best outcome for all.
This touch point with borrowers, while they are hurting and vulnerable, must be handled gently and firmly at the same time. This is no small feat and requires care, professionalism and great finesse. Repair administration professionals work with clients and borrowers to innovate procedures that work for all and make rocky roads smooth, always remembering that their primary goals are to get borrowers back to their lives as soon as possible and protect client interest in the property.
