NRMLA webinar to cover reverse servicing and maturity events

An upcoming industry webinar hosted by the National Reverse Mortgage Lenders Association (NRMLA) aims to demystify what happens to a reverse mortgage long after closing, serving as an educational component for loan officers and the seniors they serve.

The April 9 webinar, “From Boarding to Maturity: Understanding Reverse Mortgage Servicing Requirements,” will walk loan officers through the life of a reverse mortgage from the moment it boards into servicing until the loan becomes due and payable, said Gail Balettie, senior vice president of client satisfaction for Celink and one of the webinar’s featured speakers.

Topics were crowdsourced from loan officers and focus on real‑world scenarios that arise over the seven or more years a reverse mortgage typically remains in servicing, Balettie said in an interview with HousingWire‘s Reverse Mortgage Daily.

“There have been a lot of good changes in the program over time,” she said. “Anytime there are changes, we will incorporate those into our webinars.”

Ryan McIntire, director of reverse servicing controls for Onity Group, said the industry’s aging borrower base makes it critical for originators to understand what happens after a loan closes.

“You’re dealing with a protected class, for the most part. You’re dealing with elderly individuals,” he said. “The more we can educate originators on what happens on the servicing side, the better they can reinforce that with borrowers at origination.”

Key topics include first-year line-of-credit restrictions on Federal Housing Administration (FHA)-insured Home Equity Conversion Mortgages (HECMs), the line-of-credit growth feature and how borrowers can change payment plans over time.

The webinar will also cover life expectancy set-asides (LESAs), which are reserved from a borrower’s principal limit to pay property taxes and insurance, as well as first-year repair set-asides for properties that must be brought up to FHA standards.

“One of the big pain points … is repair set-asides,” McIntire said. “It’s important for originators to reinforce to the borrower that this is an important aspect of their mortgage, and if they don’t end up getting it done, then the ability to draw funds on their account — assuming that’s how they set up their loan — would be shut off.”

McIntire said borrowers without a LESA remain responsible for these obligations, and missed payments can trigger loan maturity. “You don’t want to potentially risk losing the home over a few thousand dollars’ worth of taxes or insurance,” he said.

Additional topics include trusts, nonborrowing spouse protections, prepayments, payoffs, wire transfers, servicing transfers, maturity events and probate requirements, Balettie said.

She added that the session will highlight how the HECM program has evolved, including stronger protections for nonborrowing spouses and additional safeguards for borrowers struggling with property charges.

A key focus will be on what happens when a loan becomes due and payable — typically when the last borrower dies or permanently leaves the home. Borrowers or their heirs may repay the loan and retain the property, sell the home, pursue a deed in lieu of foreclosure or complete a short sale at 95% of the home’s market value, Balettie said.

Because these loans are nonrecourse, FHA insurance covers any remaining balance.

Balettie said Celink’s reverse mortgage servicing website plays a central role in borrower education, offering FAQs, videos, forms and loan-specific information, as well as resources to help heirs prepare. About 125,000 seniors use the portal, she said, and a screen-sharing support tool has reduced call times.

“We never underestimate the intelligence and power of a senior,” Balettie said. “What I try to teach loan officers is not to memorize everything, but to know how to find the answers when questions arise.”

McIntire said that he hopes the webinar will address any confusion among reverse mortgage professionals in a nonjudgmental way.

“We need to share our pain points, share areas where we’re struggling, so that if someone else is also struggling in that area, then there is collaboration on how we can address that.”