HECM Reverse Mortgage Counseling
Attention! California Reverse Mortgage Borrowers Have 7 Day Cooling Off Period From Counseling Session to HECM Application (Effective Jan. 1, 2015)
Be Prepaired for Counseling prior to scheduling appointment, YOU WILL NEED:
>IMPORTANT NOTICE TO REVERSE MORTGAGE LOAN APPLICANT
>REVERSE MORTGAGE COUNSELING CHECKLIST
>HECM COMPARISON, AMORTIZATION & TALC PAGES
>NCOA, USE YOUR HOME TO STAY AT HOME (BOOKLET)
I'll be happy to send that to you! Request Counseling Documents
Call (800) 489-0986 and LETS TALK! It's important to start the Reverse Mortgage Process correctly!
National Reverse Mortgage Counseling Agencies
National Foundation for Credit Counseling, Inc 866-698-6322
National Council on Aging (NCOA) 800-510-0301
ClearPoint Financial Solutions 877-877-1995
Neighborhood Reinvestment Corporation 888-990-4326
Money Management International (MMI) 877-908-2227
CCCS dba CredAbility 866-616-3716
Note: Most counselors charge a fee, typically $125 although call various counselors and ask if they are currently under a grant as you may be able to receive reverse mortgage counseling at no charge.
Counseling is required prior to starting the loan process for Reverse Mortgages in all States. It is designed to be performed by non-biased third party agencies, unrelated to the lender. You may take your counseling certificate to any lender you choose.
Why is Reverse Mortgage Counseling Required?
Because reverse mortgages are designed for an older audience who are often on fixed incomes and involves what is usually a senior's most valuable asset—their home—government and the reverse mortgage industry want to make sure you have all the information you need to make the right decision for you. A counseling session can take place either face-to-face or by telephone. Counselors have been trained to deliver the required information either way. The session should generally last one hour but can take longer as needed. A new law in California beginning on Jan. 1, 2013 requires the homeowner opt out of face to face counseling if they wish to do the counseling over the telephone. The counselor and borrower must submit an opt out form with the counseling certificate to the lender.
Loan originators are not permitted to direct you to a specific counselor or counseling agency. Instead, they are required by HUD to provide a list of counselors, including local agencies and national intermediaries who are selected by HUD to provide counseling by telephone across the country.
As stated previously, the selection of the counselor is up to the prospective reverse mortgage applicant and a reverse mortgage lender is prohibited from steering the prospective applicant to a specific counselor or counseling agency. Best case scenarios indicate that scheduling a counseling session will take three to ten business days from the time you place the call to the counseling agency.
Reverse mortgage “counseling” is not therapeutic or psychological counseling. It is most comparable to tutoring, extra help in understanding something that can seem complicated due to all the details. The counselor will go over much of the same information provided to you by a lender.
What is typically involved in the Reverse Mortgage Counseling Session?
- Explain a reverse mortgage to you;
- Explain the various reverse mortgage product options;
- Explain the costs;
- Utilize a Financial Interview Tool (FIT) to help you determine if you can afford a reverse mortgage and meet your financial obligations, such as paying your taxes and insurance;
- Draw your attention to alternative options that might be available to you, such as property tax deferral programs;
- See if you might be eligible for grant money or other financial assistance by utilizing BenefitsCheckup, a tool for identifying services such as housing assistance, tax deferral programs, home repair grants or loans, food stamps, fuel assistance, social services or healthcare;
- Explain the consequences affecting the prospective borrower’s eligibility under state or federal programs and the impact on the estate or your heirs;
- Review the loan comparisons provided to you by the lender as well as the Total Annual Loan Cost disclosure;
- A counselor will not recommend that you obtain a specific product from any particular lender. Their role is to provide information and clarity but not advise;
- Counseling generally costs $125 tp $150 per session. Some counseling agencies are awarded various grants that sometimes enable them to offer the service free of charge.
- When you complete the session, both the counselor and you will sign a counseling certificate verifying you have fulfilled this requirement.