New Appraisal Rule For Reverse Mortgage Borrowers Brings A New Challenge
The new collateral risk assessment for reverse mortgage properties has raised a new challenge for originators. According to a new report, originators are finding it difficult to explain the process and implications of a second appraisal.
With as the new rule has been set in place, experts are urging originators to get ahead of a second appraisal.
"Don’t wait until you need another appraisal until you open that door,” said John Luddy, SVP of reverse mortgage lending for Norcom Mortgage, in addressing a National Reverse Mortgage Lenders Association annual conference panel in San Diego in late October, according to Reverse Mortgage Daily.
"The impact to borrowers in need of a second appraisal is twofold: the first being a second visit from an appraiser to the home, and the second being the cost of the appraisal, which can be several hundred dollars more than initially anticipated."
In short, there are three simple steps to making sure your borrowers are comfortable, should a second appraisal be necessary. The report urges originators to "give borrowers the heads up," "explain what happens if a second appraisal is needed" and "be proactive by using estimates and managing expectations."
For a more in-depth look at how originators can improve the conversation about second appraisals with borrowers, click on the image above.