HUD counseling is required for all potential borrowers prior to applying for a Reverse Loan and I think that many professionals are unaware of this requirement. The Huffington Post recently published an article discussing what takes place during the session and how informative it is in helping a senior to have a better understanding of the loan program and whether or not it’s appropriate for their personal circumstances.
Overall, the article was quite good, with the exception that the writer stated that the counseling must be done “face to face” and that is not true. If that was necessary, it would require that the applicant meet at the counselor’s office for the process, as the counselors will not go to the individual’s home. And they may not be a reasonable option for a senior, especially if they don’t drive or have a medical condition.
In California, all the counseling is completed over the telephone and usually takes about 1 hour. I always prepare my potential client for it, so that they know what to expect and what kinds of questions the counselor will be asking them. It is an excellent way to research Reverse loans with a 3rd. party who would not be part of the transaction and help them to decide if it is something that they want to pursue.
There is a charge of $125 by most of the agencies and I always provide a list of the counseling agencies that are approved with HUD.
Upon completion of the counseling, the senior will receive a HUD Counseling Certificate verifying they have done the counseling that will be viable for 6 months. If they decide to apply for the loan, I would be collecting it along with other necessary documents to begin processing their loan.
If you would like the list of the agencies, please contact me and I will send it over to you. And if you have any questions about the Financial Assessment and other recent changes to the federal program.