All reverse mortgage counselors approved by the Department of Housing and Urban Development must now provide their clients with the National Council on Aging's 28-page consumer booklet. In addition, NCOA said, counselors must complete an extra level of financial assessment to help seniors gain a greater understanding of financial risk and other factors that may impact their loan.
This assessment, NCOA's Financial Interview Tool, helps consumers consider both immediate financial needs and potential long-term challenges that could make it hard to stay at home and benefit from a reverse mortgage.
Back in July, HUD released its Housing Counseling Handbook, which includes its new Home Equity Conversion Mortgage counseling protocol; this protocol (which includes the new NCOA consumer handbook) goes into effect on Sept. 11, 2010.
The NCOA booklet, "Use Your Home to Stay at Home," can be downloaded for free at
The booklet helps consumers decide if staying in their home is the right decision. It compares the trade-offs of using a reverse mortgage with other types of home loans and provides them information on government programs that can help them stay at home.
In addition, seniors whose income is below 200% of the federal poverty level must complete the BenefitsCheckUp.org assessment during counseling.
"Through this holistic approach we hope to facilitate discussions and decisions that are based on life of the borrower, and not just the cost of the loan," said NCOA vice president of home equity initiatives Barbara Stucki. "FIT helps older homeowners consider all of their financial obligations and how they will meet them on an ongoing basis. Through BenefitsCheckUp, they can learn of services and benefits that can be an alternative or supplement to a reverse mortgage."
