In 2013, reverse mortgage lenders can expect to see greater attention paid to responsibility and accountability than ever before. The anticipated increase in new regulations and standards set by the FHA, the CFPB and even Ginnie Mae will naturally require a more proactive response from lenders, who may be asked to demonstrate complete transparency in every aspect of their operations. We may also see a greater focus on training and education as industry auditors and examiners look more closely at lender practices.
Individually, questions that might arise during the examination process may seem quite simple and straightforward, but collectively the answers reflect a deeper implication for lenders. Furthermore, providing proof to verify the accuracy of your responses can be quite challenging, if not impossible, without the establishment of a strategic system designed to respond to such inquiries.
Auditors and examiners need to know that reverse lenders are seriously committed to the borrowers they serve and are actively engaging these borrowers by educating them throughout all phases of their decision-making process—from origination to servicing. There are many borrower touch points involved in this process, each requiring the highest degree of attention possible. Continuing staff training and education is vital to ensure that these touch points are being handled carefully and competently, and as a result, training procedures are bound to show up on the radar screen.
We suggest lenders prepare to respond to the following questions in order to validate the work of their originators (and even fulfillment and servicing professionals, too):
1. Are they properly credentialed to sell reverse mortgages? 2. What training have they received? 3. What were the specific topics covered in their training? What was not covered? 4. When were they trained? 5. Who conducted the training and what qualified this person to teach? 6. Was their performance in training actually evaluated? 7. Is there an established system used to report and track training progress? 8. What are your overall training objectives and learning strategies, and do you adhere to them? 9. Do you use one of the four levels of training assessment? 10. Do you take steps to ensure the quality of your training? 11. Do you use a single- or double-loop learning methodology? 12. Do you ensure the continual education of your staff?
This is what it comes down to: An individual’s successful completion of a training program is a tactical issue. It can be planned and measured; there is a start and a finish. But ensuring the long-term development of that individual’s education and understanding of the evolving procedures of reverse mortgage lending is equally important and represents a much more strategic issue. Future audits will likely assess both the tactical and strategic aspects of lender training, and for this, lenders must be prepared.
Here are two contemporary illustrations of how a balance can be struck between the tactical and strategic aspects of training:
1. NRMLA’s Certified Reverse Mortgage Professional (CRMP) program 2. Reverse Focus’ Reverse Basics (RB) program
The CRMP Program NRMLA’s CRMP designation is the highest credential one can receive in the reverse mortgage industry. To achieve this designation, individuals must study and pass a written examination, a process that is tactical in nature. The program also places significant importance on the long-term, ongoing development of industry education, which constitutes the strategic aspect of this program. That is why, each year, CRMPs must also earn the right to maintain their credentials. NRMLA mandates that CRMPs must stay current on reverse principles and regulations, and it records and tracks this data over time as evidence of this continued education. Both the tactical and strategic elements of this program are vital, and participation in CRMP classes is likely to be reviewed positively by auditors and examiners.
The Reverse Basics Program Reverse Focus has developed a learning system (self-paced, online) that helps new reverse professionals acquire and veteran reverse professionals strengthen their knowledge of industry fundamentals. The RB program trains individuals in such basics as loan characteristics, financial concepts, product attributes, etc., and then requires participants to pass a rigorous examination to prove a mastery of these concepts. Like the CRMP program, this tactical procedure is complemented by a long-term reporting and tracking system that enables individuals to show that they have retained the information and kept abreast of changes to industry practices. While the quality of the original training is critical, without the strategic, long-term tracking and refresher elements, it would be less effective in properly teaching professionals how to sustain fundamental knowledge of reverse basics. With its focus on continuing education, RB is a valuable, education-focused initiative.
In summary, reverse entities must take steps to ensure that their teams are adequately trained—that’s an indisputable necessity. But in 2013, a hyper-regulatory environment may require lenders to take it a step further and provide their staff with a strategic method of continued education, one that won’t fall short when regulators ask you to please prove it.