Servicing

Servicing - Servicing: The Unnatural Stress of Natural Disasters

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 change 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, bringing their homes into HUD compliance with these repairs 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/her/their 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 the recent flooding in Louisiana and Hurricane Matthew 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 Hurricane Matthew and any other 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 in the storm, and servicers are charged with helping piece their 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.

Sydney Godbehere serves as the Vice President of Loan Operations and oversees the efforts of the Loan Administration, Repair Administration, Loss Draft and Record Retention departments at Celink. 

- December 2016

Servicing - A Recipe for Successful Repair Administration, Part II

The Reverse Review

- May 2016

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Servicing - A Recipe for Successful Repair Administration

The Reverse Review

- March 2016

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Servicing - HUD Issues a Game-Changer for T&I Defaults

The Reverse Review

- December 2015

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Servicing - When the Last Surviving Borrower Dies

The Reverse Review

- September 2015

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Servicing - Compliance: Moving Beyond the Rules to Real Opportunity

The Reverse Review

- May 2015

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Servicing - Compliance: Moving Beyond the Rules to Real Opportunity, Part II

The Reverse Review

- May 2015

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Servicing - Assignments to HUD, Part II

The Reverse Review

- August 2014

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Servicing - Assignments to HUD, Part I

The Reverse Review

- July 2014

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Servicing - Integrated Information Technology: A Foundation for Quality Servicing

The Reverse Review

- May 2014

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