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The Art of Fact Finding with Potential Reverse Mortgage Borrowers
The federally insured reverse mortgage has gone through several permutations as regulatory scrutiny increases. In fact just recently it was announced the CFPB or Consumer Financial Protection Bureau will be focusing more on reverse mortgage lending practices. In the interest of best serving the needs of the borrower and protecting ourselves against future legal claims, each of us should reexamine the questions should be asking each potential borrower.
Here are seven questions each of us should be asking every potential borrower.
1- Financial fact finding. Despite the fact a formal Financial Assessment has not been released, every loan officer should know the particulars of their client’s finances. Sources of income, expenses, pension survivor benefits, life insurance and any needs-based assistance received. While no one can forecast the future knowing your client’s current financial situation will reveal potential pitfalls and problems that the HECM could address in the future.
2- Long term goals. How long do they plan to remain in their home? Would they ever relocate to move near their children or grandchildren? What financial goals do they have and how would the reverse mortgage help meet them? Only by first uncovering their goals can we propose an intelligent plan that incorporates the HECM loan. .
3- Non-borrowers in the home. Do they have a younger spouse? If so be certain to…
Download a transcript of this episode here.
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