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Posts Tagged ‘HECM counseling’
Friday, October 9th, 2009
 Today marks the one week anniversary of the shift to the new HECM roster. The new roster means that the new requirements for reverse mortgage counselors have gone into effect. Only counselors that have met these requirements will be permitted to provide HECM counseling. As a result, the number of agencies providing HECM counseling have, for the time being at least, decreased dramatically. Some states, such as Delaware and Hawaii, do not have any local counseling agencies that have met the new requirements and are on the HECM roster. However, since many counseling agencies provide counseling on a national level by phone, borrowers in these states are unlikely to feel any ill effects.
The list of new counselors can be found at: https://entp.hud.gov/idapp/html/hecm_agency_look.cfm
Tags: hecm, HECM counseling, HECM roster, reverse mortgage, reverse mortgage counseling, reverse mortgages
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Wednesday, September 2nd, 2009
 The FHA released a final rule today that made the new HECM counseling standards official. The rule goes into effect on October 2, 2009.
Among the new standards, the rule establishes standards for certification testing for HECM counselors and a national Roster of HECM counselors. The final rule establishes that:
1. HECM counselors who have passed the exam by October 2, 2009 will be automatically included in the HECM counselors Roster.
2. HECM counselors who have been removed for the Roster may apply for reinstatement by explaining in writing how the deficiencies that were the cause of their removal have been addressed and how their program has been improved so as to warrant reinstatement of the counselor.
3. To be eligible for the HECM counselor Roster, counselors must not be listed on any of the following lists: General Services Administration’s Suspension and Debarment List, HUD’s Limited Denial of Participation List, or HUD’s Credit Alert Interactive Response System.
4. Counselors have a 30 day period to submit a written appeal of their proposed removal from the Roster.
5. A counselor may be removed for a maximum period of one year.
Counselors will be tested every 3 years to remain on the Roster and must complete continuing education requirements.
The final ruling can be read in its entirety as it appears in the Federal Register. Hopefully the ruling will help improve the HECM counseling process.
UPDATE: The FHA HECM counseling protocols have yet to be released. An update will go out when it is published. The Final Rule published today only covers the HECM counseling Roster and the standards that accompany it.
Tags: counseling standards, exam, FHA, final rule, hecm, HECM counseling, HECM counselor, HECM counselors, HUD, reverse mortgage, reverse mortgages, Roster
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Friday, May 8th, 2009
 The Hyatt Regency Grand Cypress, where the conference was held. I got back last night from the NRMLA Reverse Mortgage conference in Orlando, and I am already in withdrawal. The conference was wonderful and far more exciting than Chicago. In addition, the weather was about 20-30 degrees warmer, and the hotel had a pool, a fake “beach,” and a talking macaw. While the setting was hard to beat, the information at the conference once again proved to be quite informative.
Some highlights:
- The session on “Making Counseling More Effective,” which pulled from a large variety of people. While the Q&A portion got pretty heated, the clarification of the new protocol (whenever it is finally released) was quite useful. More to come next week.
- The addition of Peter Fatizzi, of Realty XPerts, to the panel on HECM For Purchase led to wonderful insights on how realtors, builders, and lenders can work together. Peter’s relationship with Jourdan Hoover (of Wells Fargo Home Mortgage) I think put forth a good model for the way lenders can potentially build a client base through interacting with others in the real estate industry–and just how much the product can help their clients. However, the panel also inadvertantly pointed out the importance of clearly explaining the product, leading to questions about the ethical obligations of the industry to make sure a senior is financially stable after a reverse mortgage. This theme was echoed throughout the conference and especially in the counseling session.
- Amanda Norvell, of TRUE Marketing, and Tara Hornsby, of the Orlando Magic, shared some very creative ways their companies are using technology. While many of the comments did not directly relate to the reverse mortgage industry, it was a good catalyst to begin thinking creatively about the opportunities presented by facebook and twitter.
- It was quite enjoyable to tweet the conference (see @hecmgirl for tweets), leading NRMLA to start a twitter account at the end (@NRMLA). Look for twitter to play an increasingly large role in the industry.
- And finally, in the free stuff category, hats off to The Reverse Review for the fantastic cupcakes, as well as Customized Lenders Services, INC. for paddleball.
Looking forward to seeing everyone at the next event!
Tags: conference, hecm, HECM counseling, HECM for purchase, marketing, NRMLA, Orlando, reverse mortgage, Reverse mortgage conference, reverse mortgage counseling, twitter
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Wednesday, May 6th, 2009
 The last time we talked about power of attorney was during the fraud series and how to safeguard seniors from friends and family that may take out a reverse mortgage without the borrower’s knowledge. But here are some facts that will be helpful for you to know when using a Power of Attorney.
Power of Attorney can only be used for 2 reasons. First, when the customer cannot sign the loans due to physical or mental inability. In this situation, a doctor’s note must be obtained stating that the borrower cannot sign due to either mental or physical inability. The note must also state the date that the borrower came into their care and their debilitating condition. In this case the borrower does not need to complete HECM counseling and the POA must attend on the borrower’s hehalf.
The second reason a power of attorney can be used if it is more convenient for the power of attorney to sign because the borrower chooses not to deal with the process. In this case, the borrower must complete the HECM counseling themselves and sign both the HECM counseling certificate and loan application. It is only a total of 5 signatures, and the POA may sign the rest of the documents. It is also reccommended that the POA attend the HECM counseling as well.
And if you have not noticed, we launched our new site this afternoon. Like the new look?
Tags: family, fraud, friends, HECM counseling, inability, power of attorney, reverse mortgage
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Tuesday, May 5th, 2009
 While reverse mortgage fraud is less common than some would have one believe, it still occurs. Below are some warning signs and what you can do to stop them:
1. If You Don’t Receive An Estimate or a Good Faith: Lenders should be able to tell a borrower how much money they can expect to receive up front. There are many reverse mortgage calculators available online (reverse mortgage calculator) that can also tell borrowers this information. As a result, be suspicious if a lender doesn’t tell the borrower how much money they can receive or can’t provide an explanation of how the amount was determined.
In addition, at closing, lenders are required to provide the borrower with a “Good Faith,” which lists all of the costs and fees of the reverse mortgage. The borrower should make sure a good faith is presented and that they are familiar with its contents.
2. Never Heard of the Lender
If you have never heard of the lender before, it makes sense to check the HUD website or another lender list and make sure that they are listed and accredited.
3. Don’t Talk About Counseling
Reverse mortgage counseling by a third party is a mandatory part of the reverse mortgage process. Be wary of anyone who does not talk about counseling or dismisses it as unnecessary. It is required to get a federally insured reverse mortgage and, depending on the state, most proprietary ones.
4. No One Answers the Phone
If your calls go unanswered, especially for long periods of time, it might be best to proceed with caution. Everyone is busy and many loan originators travel to meet with clients and for closings. However, there should be an answering machine if this is the case.
5. Try to Cross-Sell
Cross-seling, the practice of selling more a product along with a reverse mortgage, is prohibited. One of the most common reverse mortgage scams involves the lender convincing the borrower to take out a reverse mortgage and use the proceeds to buy insurance or make investments. A lender cannot, by law, speak to the borrower about anything other than a reverse mortgage. Therefore, if a lender tries to sell a borrower a product– especially an investment product– be wary. It is not permitted.
Tags: borrowers, Cross Selling, good faith, HECM counseling, lenders, reverse mortgage, reverse mortgage fraud, reverse mortgage scam, reverse mortgage scams, reverse mortgage warning signs, reverse mortgages
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Tuesday, April 14th, 2009
 NRMLA (National Reverse Mortgage Lenders Association) is expected to announce that in order to receive their HECM counseling certificate, seniors must pass a test given by the HECM counselor. The counselor will have a list of 20 questions to choose from and must ask 10. The borrower must not get more than 5 wrong in order to get the certificate.
Requiring borrowers to pass a test is not a good way to assess their understanding of reverse mortgages. Many seniors have not taken tests in years. Taking a test, especially if the test is given orally, requires a level of concentration that is difficult for most individuals and is a stressful experience.
While mandating counseling for borrowers has more upsides than downsides, requiring those borrowers to then pass a test is an undue burden on borrowers. Although counseling can be a helpful safeguard to ensure that the borrower understands what a reverse mortgage is, some elderly borrowers, such as those with Alzheimers or dementia, likely do not have the ability to pass a test, regardless of whether they have an understanding of the situation. Even those who do fully comprehend the situation may get flustered and fail. Often, understanding of a topic is not well summed up on paper or in an oral question and response. The better gauge of understanding should be the counselor’s conversation with the borrower. As long as the borrower undergoes counseling, a test is not needed.
Reverse mortgages are often applied for in times of hardship. Requiring a borrower to pass a test, especially an oral one, is an unnecessary requirement that will cause more harm than good within the reverse mortgage process.
Tags: counseling, hecm, HECM certificate, HECM counseling, HECM counselor, mortgage counseling, National Reverse Mortgage Lenders Association, NRMLA, reverse mortgage, reverse mortgage counseling, reverse mortgages, test, test taking
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