The first step to getting a good reverse mortgage is choosing a reverse mortgage originator that suits your needs. Unfortunately, this is easier said than done.
Choosing a reverse mortgage originator can be a complicated process if you do not know what to look out for. In general, you will want a company:
- That you feel comfortable working with;
- That has an excellent workforce;
- That displays a genuine willingness to help you with your needs; and
- That has the right amount of knowledge and experience to help you through the entire reverse mortgage process.
What is a reverse mortgage originator and why do you need to be careful in choosing a reverse mortgage originator?
A reverse mortgage originator is sometimes referred to as a
- loan officer,
- originating lender (as opposed to a servicing lender),
- reverse mortgage specialist,
- reverse mortgage consultant,
- reverse mortgage broker, or
- reverse mortgage advisor.
Whatever it is called, however, you can consider your originator as your guide to the reverse mortgage process. Its role is to help you understand the benefits of getting a reverse mortgage and to help you navigate the process from application to approval.
Unfortunately, while many reverse mortgage originators market themselves as experts, not all of them actually are. To avoid wasting time, money, and effort during the application process, you need to pick the right originator from the very start.
The following are the things that you must consider when choosing a reverse mortgage originator:
How long does it take to process the reverse mortgage loan?
Ideally, you, with the assistance of your reverse mortgage originator, should be able to complete the reverse mortgage process within 30 to 45 days. But, of course, you will also need to do your part. The faster that you can submit the documentary requirements for the loan, the faster the reverse mortgage originator will be able to process it.
Do you need to personally appear before the reverse mortgage originator to process your application?
Many reverse mortgage originators allow the initial stage of the application process to be done via telephone call. This telephone session is designed to give you a chance to cancel your application in case you change your mind later on.
However, do note that the reverse mortgage application cannot be finalized without your personal appearance, so you will eventually need to personally appear before the originator.
Does the reverse mortgage originator have a competent workforce?
As already mentioned, your reverse mortgage originator is your guide to the reverse mortgage process. Applications go through a long and arduous process before the loan can be closed successfully. For this exact reason, you need to pick a company that has an excellent staff, who is not only knowledgeable about the entire process, but also helpful and patient enough to answer all your questions and make you feel comfortable in dealing with the company.
How much experience does the reverse mortgage originator need to have with reverse mortgages?
Knowledge comes with experience. If you need a knowledgeable originator, then you should look for one with the right amount of experience. So, before choosing a reverse mortgage originator, try finding out how many years they have been in the business and what kind of training they have went through. Ideally, you will want a Certified Reverse Mortgage Professional (CRMP). The Nation Reverse Mortgage Lenders Association (NRMLA), the voice of the US reverse mortgage industry, created the CRMP designation to distinguish the most knowledgeable, competent, and ethical professionals on the market.
Mortgage originators are considered “experienced” if they have a minimum experience of three (3) years in the reverse mortgage business or have been personally closed fifty (50) or more loans.
Does the reverse mortgage originator have experience with the common loan processing issues?
If you transacted with a CRMP, then this issue should not be too much of a problem. However, if your reverse mortgage originator is not a CRMP, then you need to ask them about their relevant experience and training. There are plenty of issues that can crop up during the reverse mortgage process, which can prove difficult for less experienced originators, especially those without the necessary technical training. So, once again, we stress that it is important to have a trained and experienced reverse mortgage originator, preferably
When you have several problems that surpass the estimated time for processing, should the reverse mortgage originator just move on or must it continue processing your application?
Your reverse mortgage originator should not only be skilled enough to deal with the problems that might crop up during the reverse mortgage process but should also be patient enough to help you through these problems. He must continue processing your application and help you through the entire process. It is only when the difficulties become truly insurmountable that the reverse mortgage originator has reason enough to give up on your application.
What if the reverse mortgage originator starts treating you badly?
Very few reverse mortgage originators treat their clients poorly. However, in the unlikely event that it does happen, you should try your best to resolve the situation amicably at first. Try to speak with the manager or supervisor of the originator. If they do not resolve the situation, then you can try to raise your concerns with upper-level management. But if all else fails, consult your lawyer to discuss what legal actions you can possibly take.
What type of reverse mortgage loans does the originator offer?
Another good sign of experience is the number of reverse mortgage products that the originator offers. Having a variety of reverse mortgage programs exposes the originator to more aspects of the industry. Aside from that, it increases the chances of you getting the type of reverse mortgage that best fits your needs.
For example, the Home Equity Conversion Mortgage (HECM), which is the most popular type of reverse mortgage, is good option for most senior homeowners. However, in some instances, another type of reverse mortgage can be more suitable. A jumbo reverse mortgage may be better for borrowers who need more cash and own in a high-value home; or an HECM for Purchase may be better for homeowners who want to downsize. The bottom line is that there is no one-size-fits-all option and your reverse mortgage originator needs to understand this.
Does the reverse mortgage originator help you determine which reverse mortgage loan is best for you?
Your reverse mortgage originator should help you determine which reverse mortgage program best fits your needs and help you understand why it does so. Ideally, they should even go into some detail regarding each program so that you can better understand all available options. If your reverse mortgage originator does not do this, then you might want to reconsider your options.
Does the reverse mortgage originator force or rush you to get a particular reverse mortgage loan, or does it just help you determine which type of loan is appropriate for your situation?
Deciding on what type of reverse mortgage loan you would like to get is a big decision. Your reverse mortgage originator should not force you to get a particular reverse mortgage loan and should not rush you as you think about your choices. Instead, it should give you enough time to decide what program you think is best for your situation. As already mentioned, the reverse mortgage originator is there to merely guide you through the process. It does not make your decision for you and it should not try to force you into one decision or the other.
Does the reverse mortgage originator protect the privacy and confidentiality of your personal information?
Giving your personal information to the reverse mortgage originator during is a mandatory part of the application process.
Understandably, some people are still hesitant to give out their personal information because of the risk of identity theft or the breach of confidentiality. However, there is no way to avoid these disclosures if you want to apply for a reverse mortgage.
If you are still hesitant, however, you may want to ask your reverse mortgage originator about their data privacy systems before you start sharing your personal information.
Does the reverse mortgage originator encourage you to discuss the loan transaction with family and trusted advisors?
Your reverse mortgage originator should always encourage you to seek advice from your family and trusted advisors They should give you time to think and decide. Family members may even be invited to sit in during calls between you and your originator. However, if you choose not to involve your family in the decision-making process, then that is entirely up to you. The point here is that you should be given the fullest opportunity to think about your decision before you officially bind yourself to a reverse mortgage loan.
If your reverse mortgage originator starts discouraging you or prohibiting you from seeking outside advice, then its probably time to look for another originator.
Does the reverse mortgage originator have the required federal and state licensing?
Reverse mortgage originators need to complete federal and state education, testing, and licensing requirements. Each originator must register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry (NMLS).
Make sure to ask your originator if it is licensed to operate in your state. Only work with legal entities that are license and registered in your state.
If necessary, you can even ask them to show you the necessary documentation to prove their license.
Does the reverse mortgage originator follow the federal advertising rules?
When advertising or promoting HUD-insured reverse mortgages, lenders must comply with federal requirements relating to the proper use of Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) official logo, seal, name, and acronym. Make sure that you are working with an originator who does not falsely represent its products or services.
Does the reverse mortgage originator provide trustworthy product descriptions to homeowners?
Federal regulations require reverse mortgage originators to inform their borrowers of all available features of a reverse mortgage product and explain these features in plain language. They are prohibited from misleading or otherwise causing a mortgagor to believe that a reverse mortgage product contains features or limitations that are inconsistent with federal requirements.
Does the reverse mortgage originator disclose the costs associated with the reverse mortgage?
Of course! Reverse mortgage originators are legally required to disclose all costs associated with your reverse mortgage loan. Moreover, the HUD carefully regulates the allowable fees that originators can charge against homeowners. The originators should be able to tell you straight up whether a fee is allowable by the HUD or not.
In the event that an originator charges a homeowner non-allowable costs, then these costs need to be shouldered by the originator itself. Instances of an originator charging non-allowable costs, however, are extremely rare.
Should you find yourself with a reverse mortgage originator seeking to recover non-allowable costs, please consult your lawyer to determine what legal actions you can take.
Does the reverse mortgage originator need to know the law of the state that it operates in?
Not all state laws are the same. If the originators are processing reverse mortgage loans in multiple states, then they should ideally know the law of all those states. This is an extremely important step for reverse mortgage originators if they want to avoid potential legal consequences down the line. As the saying goes, “Ignorance of the law excuses no one.” Reverse mortgage originators cannot deny liability simply because they were not aware of the applicable laws in the state they operate in.
Will the reverse mortgage originator still answer questions and continue to provide customer service once the loan is closed?
Your reverse mortgage originator should still make itself available even after the transaction is closed. Once again, it is extremely unlikely that you will end up with a reverse mortgage originator who will refuse you service after taking your business. However, if you do find yourself in this unfortunate situation, you should contact your lawyer to determine what legal actions you can take.