hud counseling

April 9, 2016 Counseling No Comments

HUD Approved Counseling for Reverse Loans

As mentioned in my previous 2 posts, counseling by an HUD approved agency is required by the federal government prior to applying for a Reverse mortgage.

Now, that does not mean or obligate anyone who completes the counseling to apply for this loan, it’s simply an excellent option for anyone that is seeking accurate information about the HECM program and not be influenced by some of the myths that continue to circulate about it.

I can provide a list of some of these approved agencies and they do typically charge an $125 fee for their service. But it’s worth it, plus once completed the “applicant” will receive a HUD Counseling Certificate that verifies they have completed the counseling and if they decide to move forward on a loan application, they will need to give this to the Loan Officer.

Here is the remainder of the article about counseling that I have been sharing on my blog.

“Clarifying what makes the reverse mortgage become due and payable creates some surprise among prospective borrowers, Tetreault said, but it also opens the door to other questions that seniors might not have thought about previously, such as what happens if they do not pay property taxes and insurance payments on time.

“We talk about what their responsibilities are as reverse mortgage borrowers to make sure they do not put themselves at risk of foreclosure,” she said.

The million-dollar question

HECM counseling is a necessary stepping stone in the older homeowner’s journey to get a reverse mortgage. This decision is typically prompted by a significant need, whether that is the result of an unexpected personal issue or even the intrigue of using home equity to supplement retirement wealth.

In many cases, the million-dollar question is: how much money can I get from a reverse mortgage?

One of the things ClearPoint does off-the-bat is ask counselees how they plan to use the money they receive from a reverse mortgage; whether that means using these funds for daily or future expenses, paying off debt, etc.

In understanding what the loan proceeds will be used for, Tetreault said counselors can help prospective borrowers determine if a reverse mortgage is really the right product for them, or if there are other alternatives that might fit best with their financial plans.

At the end of the day, the decision to get a reverse mortgage hinges upon education and the awareness of what other resources are available to seniors that can help them accomplish their personal needs.

“Education empowers consumers,” Tetreault said. “Whether seniors take that information and decide to get the reverse mortgage or not, at least they are educated and have an understanding of all the choices and options available to them.”

Written by Jason Oliva/Reverse Mortgage Daily

April 6, 2016 Counseling No Comments

HUD Counseling for Reverse Loans

One of the best resources for accurate information about Reverse mortgages is through a HUD approved counseling agency.

As a matter of fact, no one can apply for the loan without completing a counseling session which is typically done over the telephone in about one hour.

Once it’s completed the counselor will send a HUD Counseling Certificate to the individual(s) for them to keep and use if they decide to apply for the loan.

Here is a copy of an article that was published a couple of months ago with more details about this important resource.

“From an educational standpoint, Home Equity Conversion Mortgage (HECM) counselors are the first line of defense in the ongoing struggle to dispel the most common reverse mortgage myths and misconceptions.

Mandatory HECM counseling provides seniors with the necessary exposure to make an informed decision about getting a reverse mortgage. Like originators, the job of a HECM counselor is also rooted in education as they help prospective borrowers more clearly understand the inner workings of reverse mortgages.

Despite this dual effort on the educational front, and the wide variety of positive press from the mainstream media lately, several reverse mortgage illusions have yet to evaporate into the ether.

Borrowers, in fact, still own their homes

One of the most common misconceptions of reverse mortgages is that borrowers automatically relinquish ownership of their homes once they obtain a HECM.

Perhaps the result of negative media representation in the past, the lingering effect of this myth has obscured the truth about reverse mortgages among the general public. The reality is often a pleasant revelation for seniors once they undergo HECM counseling.

“Seniors are under this misconception that they don’t own the home anymore—the lender does,” said Sherry Tetreault, a Tenn.-based certified credit counselor with ClearPoint Credit Counseling.”

Jason Oliva/Reverse Mortgage Daily

Due to the fact that this article is quite long, I plan on sharing it in two additional posts here on my blog.

If anyone would like a list of some HUD approved counseling agencies, please contact me as there are several different ones to chose from, but the counseling process is uniform.