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The life of a reverse after closing


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[vimeo id=”51764990″ width=”625″ height=”352″]

Often out of sight and mind after a reverse mortgage closes, servicing is the backbone of the ongoing relationship with the borrower. From monthly draws, tenure payments and loan questions reverse mortgage servicers are on the front lines of long-term customer support and care. The average loan officer is with the borrower for 3-9 months while the servicer….


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  1. Great growth by the LaRose family team.

    At 175,000 HECMs, Celink services over 29% of all active HECMs. That is amazing considering how small it was just a few years ago.

    With adjustable rate HECMs, Celink could be servicing some HECMs for much longer than 15 years especially IF the “Standby Reverse Mortgage” catches on over time. Hybrids could also mean HECMs will be serviced by someone like Celink much longer than the typical fixed rate HECM.

    To hear that it is very difficult for those in default to come out means that the vast majority of those over 55,000 HECMs now in default will not come out. Fortunately for the related originators (lenders) Fannie Mae holds a significant percentage of them. BUT those which are GNMA HMBS related, many lenders will be on the hook for the amounts servicers like Celink have had to advance. If the losses on such defaults (in many cases multiple defaults per borrower) and the lenders are accountable for 30,000 of those HECMs at an average of $3,000 per HECM (both numbers are guessed for illustration purposes only), lenders could be on the hook for $90 million. Much of that would be owed by Wells, B of A, and MetLife on their retail production and guarantees for lenders no longer in existence.

    So the question at hand is how many of those HECMs in default are the responsibility of lenders and what is the average amount in default. If HUD does not rapidly approve foreclosure on those HECMs, the average amounts in default will only go up.

  2. Less than two years ago, an industry official described a meeting where several lenders gave money to produce a pilot program for T & I default counseling. (Please see article and comments at:

    What the remarks in this video subtly declare is how vain those efforts were. For several months counseling made it sound like they could make it work but for lenders it gave them time to reorganize and get ready for the losses they were now waking up to. Lenders were just then realizing the massive size of the problem they would incur due to their GNMA HMBS guarantees and the massive onslaught of negative press their foreclosure efforts would engender. Unfortunately the number of defaults being kicked around at that time were guessed to be only about 25% (13,000) of what we hear them to be today. (Please see the following article:

    So what counseling gained was more revenues (some of which violated ML 2008-28 and HERA mandate but was excused as coming forth from good intentions) and what lenders gained was time, perhaps as much as two years to respond.

    If the video represented how deep the failure of counseling was in assessing their ability to help HECM borrowers in default then that also indicates the depth of the problem with counseling assessing the financial capability of seniors during the lifespan of a HECM. Counseling leaders oversold the ability of their industry to help correct the default problem but what is new about counseling leadership overselling the capabilities of counseling???

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