Today’s underwriters are challenged by the need to create a pleasing “customer experience.” On
top of this, HUD guideline interpretation, the ever-changing landscape of risk management and increased regulatory compliance are also nagging issues that we encounter every day.
And now we face a new concern. With the recent exit of some major banks from the reverse mortgage space, where will the needed training, support and opportunities for increasing HECM skills and knowledge come from? Traditionally, these institutions spent considerable dollars and time investing in training large numbers of originators and support staff as a part of their customer-building efforts.
As new originators and lenders continue to enter the reverse mortgage space, will the lack of available training lead to poorly originated and processed files? Will underwriters then have to be trained in how to deal with substandard files? A growing concern among underwriters is the possibility that we will have to undergo even more basic training to learn to handle flailing support for file submission and delivery. This could very well happen if the remaining industry participants don’t make education and training efforts a priority.
Consider the classic scenario-inquiry format. Seeking advice and direction for a borrower scenario is a very common origination activity. The ability to weigh the facts with a lender at an early stage of pre-qualification is sometimes key to successfully meeting the needs of the borrower.
The scenario proposed often requires the originator or processor to be familiar with many different aspects of the borrower’s eligibility and property. There is a certain skill involved in learning how to acquire these facts, and that is learned through basic and ongoing training, education and experience. Should this knowledge be lacking, a processor or originator would not be able to properly handle an unusual or difficult question from the underwriter. What would the underwriter do if their
FOR EXAMPLE, CONSIDER THE FOLLOWING QUESTION RECENTLY PULLED FROM MY INBOX:
Q: “I have a borrower who owned 39 acres of land and gave 10 acres of that land to his daughter as a wedding gift. However, the legal description of the land includes the 10 acres because the parents also pay the taxes as part of the gift. Should we have the borrower tell the appraiser to just include 29 in the appraisal? Based upon the size of the parcel, is this a loan you will purchase?”
The scenario is frightening, to say the least. Would an underwriter be better off just saying no? That response would hardly lend itself to a quality customer experience. Unfortunately, the appropriate answer to this question will probably require a number of back-and-forth communications in order to formulate an informed opinion.
Scenario resolution begs the question: Does the role of the underwriter include building the skills and knowledge of the inquirer and doing the research?
In addition to the FHA Resource Center, HECM guidelines and Mortgagee Letters, some lenders have customer support and service desks, published manuals and matrices, and various FAQ documents to address scenario issues. Despite all of these resources, a quick phone call or email to the underwriter appears to be the most convenient mode utilized by many to instantly access knowledge and support.
As an industry, we have come to realize that flexibility and change are constant. To further
illustrate the fact that training and education need to be a focus for the industry, I am inviting you to take the time to put yourself in the role of the underwriter. Take a second look at the above scenario and send us your feedback as to what questions or additional information would be required to address the situation. Be brutal, be thorough, be honest and most of all, be mindful you could have five or six of these same or similar scenarios pop up every day in addition to an underwriter’s regular work. How would you handle this question without support?
Email your response to firstname.lastname@example.org and let’s see where this scenario leads us. We look forward to reading your input!