We all knew it was coming; it’s been a topic of conversation at industry meetings for some time. There were questions and there was speculation, but now we know the details. While there don’t seem to be any big surprises, there are some changes and being on top of this will keep your reverse mortgage originations running smoothly.
First of all, no need to panic. There are some additional steps to be taken and some additional information that will be provided to the senior, but keep in mind that the more informed the senior borrower is, the better for all of us.
The new protocol requires that the senior be provided with certain pieces of information prior to the counseling session. In anticipation of these changes, some reverse mortgage originators have been gearing up. Instead of burying your head in the sand and ignoring the changes, be proactive, get a copy of the protocol from the HUD counseling handbook if you like, or speak with your lenders, they should have this information as well. If you’d like a copy, send a message via this article.
Let your borrowers know that additional information will be asked of them. I have heard comments like, “oh, this will bring the counseling process to a standstill." Nonsense. Do your homework, be prepared and prepare your senior clients and all will be just fine. There are some new tools at the counselor’s disposal and we will discuss these in future articles and as the new protocol is rolled out.
Steering by both the counselor and the lender is addressed in the new protocol. Be reminded that as lenders we must provide a list of available counselors and agencies (local and nationwide) to our seniors. No steering on our part is permitted. The same rule applies to the counselor. No steering to a particular lender.
The protocol requires that the counselor cover topic such as the non-recourse provision of the loan, borrower obligations once a reverse mortgage is taken, and costs associated with a reverse mortgage. And yes, there will be 10 questions asked of the senior, five of which must be answered correctly. The questions are supposed to be interspersed throughout the session, as opposed to the “quiz at the end” we kept hearing about. There are many more topics covered in the 100-plus page document.
Once again, this is just one more development as our reverse mortgage industry continues to evolve. We have been hearing about it in bits and pieces and now we have the full picture. As the protocol is put into practice, other questions will arise as with any new procedure. Reassure your senior that the counseling session is a valuable part of the reverse mortgage process and view it the same way yourself.
Sue Haviland is a reverse mortgage consultant in Baltimore and the founder of Reverse Mortgage Success, a leader in the training and education for originators around the country in the rapidly growing reverse mortgage arena. Sue has worked in the lending industry since 1981. She has been originating reverse mortgages for the last six years and still originates loans every day. She has helped hundreds of families all over the country in the last several years. Sue also shares her knowledge of this market in presentations before the Women's Council of Realtors, Mortgage Bankers Association, National Association of Professional Mortgage Women, and SRES – Senior Real Estate Specialists, Brian Sacks' Insider Seminars, as well as the public. Sue is a Certified Senior Advisor and is active in many professional organizations. Sign up for her free seven-part mini-course at
