A counseling session can take place either facetoface or by telephone. Nonprofit housing counseling agencies are not permitted to receive money or direct referrals from reverse. In the other 41 states, reverse mortgage statutes specify. Reverse mortgage counseling can help you make the best decision for you.
The department is aware that there may be some confusion about how much a counseling agency may charge for hecm. The average time needed to complete the session is 40 to 60 minutes. Lenders are required to document such direct payments in fha loan paperwork including the hud1 settlement statement. If a client decides to finance the counseling fee through loan proceeds, how will the counseling agency receive this payment from the lender. Roles and responsibilities of a reverse mortgage counselor.
Reverse mortgage counselors do not receive any payment from reverse mortgage lenders. This is the only counseling center authorized to provide hecm counseling in the city of denver but you. Counselors have been trained to deliver the required information either way. Once you become a counselor hud requires continuing education and passing the hecm exam every two years. Hecm origination counselors must be certified, registered within fha connection. Information about the home equity conversion mortgage hecm certification is available on the hecm counseling resources page of the hud exchange. You can choose from any of the available local counselors or even schedule a phone appointment with a national counselor out. Options other than a home equity conversion mortgage that are available to the borrowers, including other housing, social service, health and.
The following is a summary of these issues, as they affect the content of this book as of october. Lenders must provide a list of at least 10 to 12 agencies that provide hecm counseling. Counseling is a central feature of the home equity conversion mortgage hecm program. Before applying for a hecm, you must meet with a counselor from an. Jan 12, 2008 the reverse mortgage book does just that, explaining everything you need to know in easy to understand terms. Cambridge has a large staff of highly experienced and dedicated home equity conversion mortgage hecm counselors available to help you understand all aspects of the reverse mortgage loan process, so you can make an informed decision. The primary reason we continue to update and publish the book is that we continue. Hecm origination counselors must be certified, registered within fha connection, and are required to maintain education on a biannual basis. The reverse mortgage book does just that, explaining everything you need to know in easy to understand terms. The department of housing and urban development hud and the federal housing administration fha want to ensure you are able to make an.
Loan originators are not permitted to direct you to a specific counselor or counseling agency. To make sure you have a clear understanding of the loan, you must go to counseling before we can order an appraisal and proceed. To begin the registration process, click the hud hecm certification exam portal link. You can search to find hecm counselors in various parts of the country. Cambridge has a large staff of highly experienced and dedicated home equity conversion mortgage hecm counselors available to help. To find a reverse mortgage counselor near you, search the hecm counselor roster or call 800 5694287. An 80 year old homeowner is considering a hecm loan, but has a 45year old developmentally disabled son to whom she wants to leave the home upon her death. The national council on aging ncoa booklet use your home to stay at home a. You will pay an origination fee to compensate the lender for processing your hecm loan. There is a concept called community standard that affects not only fees but also standards of practice. Housing counseling frequently asked questions hecm.
The hecm counselors must cover the following items. There are no restrictions on which counselor someone needs to work with based on location. The national council on aging ncoa booklet, use your home to stay at home a guide for homeowners. The book, understanding reverse, is updated each year to reflect regulatory changes and to simplify the reverse mortgage. Click on click here text in the middle right hand side of the screen. Call a reverse mortgage counselor now at 800 7571788.
Borrowing against your home reverse mortgage loans. Counselors are not to steer to any lender or provide any information on which lenders are offering specific hecm variations or proprietary products. A reverse mortgage is a special type of mortgage that differs from a traditional mortgage or home equity loan in that it does not require regular monthly. The fhainsured home equity conversion mortgage, or hecm, was signed into law on february 5, 1988, by president ronald reagan as part of the housing and community development act of 1987. Some of the mortgagee letters that contain hecm program related updates are listed here.
The first hecm was given to marjorie mason of fairway, kansas, in 1989 by james b. A counseling session can take place facetoface or by telephone. Department of housing and urban development hud requires that homeowners interested in pursuing a home equity conversion mortgage hecm receive mandatory reverse mortgage counseling regarding the implications of and alternatives to a reverse mortgage from a hudapproved hecm counseling agency. Search our free list of reverse mortgage counseling agencies. Does your agency need to demonstrate efforts to affirmatively further. You can search to find counseling agencies in various parts of the country. For example, if your search is for a list of all active. Fha rules state the hecm counseling fees can be paid by the client andor related parties according to the fha official site directly to the counseling agency. For purposes of talc calculations, a hecm is considered less expensive if the appreciation rate of the home is low to moderate, because the loan balance will be limited by the home value sooner in a. The process by which hecm counselors must conduct a counseling session often referred to as the hecm counseling protocol is covered in housing counseling handbook 7610. Servicing fee lenders or their agents provide servicing throughout the life of the hecm. Preparing for your counseling session all reverse mortgage. Counselors are allowed to provide the required reverse mortgage counseling to a group of related.
Applicants who are on any of the following lists are not eligible to be hecm counselors. Fair housing and fair lending webinar wednesday, january 22, 1 pm 2. Reverse mortgage lenders generally charge an origination fee and other closing costs. Counseling can be completed over the phone or facetoface with a local agency. Effective august 4, 2014, counselors must also discuss the implications of a mortgagors marital status. Participating agencies may charge fees for reverse mortgage. All borrowers and any nonborrowing spouse must complete a counseling session. A reverse mortgage, otherwise known as a home equity conversion mortgage, hecm is a loan, using your home as collateral, and where payments on the loan are not required monthly or at. Hud certifies housing counselors around the country to provide homeowners with impartial education about reverse mortgages.
This is to protect your best interests by making sure you have a reliable, neutral 3rd party who can help educate you on the process of a reverse mortgage. Remember, these counselors are not affiliated with lenders. Counseling agencies welcome to fhas search for counseling agencies by location or name. Training hud housing counselors training and testing for. In this new book, you will learn about the details of new legislation. Jan 17, 2011 counseling is a central feature of the home equity conversion mortgage hecm program. Hecm reverse mortgages new counseling disclosure requirements. This list is periodically updated but may not be comprehensive. It is intended to give users a general idea of approximate costs, fees and available loan proceeds under the fha home equity conversion mortgage hecm program. They must also conduct a budget analysis to determine the unique financial situation of the client and tailor the options presented in the counseling session to that situation. Counselors cover a number of required topics including eligibility, loan amounts and loan limits, and future repayments. Department of housing and urban development hud requires that homeowners interested in pursuing a home equity conversion mortgage hecm receive mandatory reverse mortgage.
Hecm and jumbo counseling consumer credit and budget. Reverse mortgage counseling find hud approved counselors. This is to protect your best interests by making sure. Ml 201109 superseded the provisions of ml 200812 regarding appropriate charges. There are currently 11 hud approved reverse mortgage counselors in colorado. For example, if your search is for a list of all active hecm counselors in washington, d. Options other than a home equity conversion mortgage that are available to the borrowers, including other housing, social service, health and financial options. Reverse mortgage counseling is required what you should. Reverse mortgage counseling is a mandatory part of the reverse mortgage. General services administrations excluded parties list system epls, huds limited denial of participation list lpd, or huds credit alert interactive voice response system caivrs.
Specifically, the housing counseling handbook outlines requirements for program eligibility and approval, the delivery of comprehensive and home equity conversion mortgage hecm counseling services, program record keeping and reporting, performance monitoring, and the competitive funding and grant application process. The hecm certificate will serve as an invoice that the lender will provide to the settlement agent. Home equity conversion mortgage hecm reversemortgages. Using the community standard to set fees counseling today. This is the only counseling center authorized to provide hecm counseling in the city of denver but you can also find many other counselors in the denver metro area. Reverse mortgage hud counseling is not only required but is an important part of securing a reverse mortgage. The national council on aging ncoa booklet use your home to. To find a reverse mortgage lender, use the hud lender list search. Hud sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, and credit issues. The hecm protocol is also provided as an appendix to this handbook to offer additional guidance on reverse mortgage counseling. After you have successfully completed the exam, you are required to retake the exam every three years in order to retain your active status on the hud hecm counselor roster.
For example, if your search is for a list of all active counseling agencies in washington, d. Nonprofit housing counseling agencies are not permitted to receive money or direct referrals from reverse mortgage lenders. To make sure you have a clear understanding of the loan, you must go to counseling before we can order an appraisal and proceed with the loan. You can choose from any of the available local counselors or even schedule a phone appointment with a national counselor outofstate. As part of the reverse mortgage process, you will need to work with an approved counselor.
Hecm default counseling assists seniors who are at risk of defaulting on hecm loans. Training other resources for housing counselors in addition to the training materials on, the hud office of housing counseling offers many resources on the hud exchange. The session should generally last 90 minutes but can take longer as needed. There is an upfront fee for this service, which is typically paid at the time of counseling. Below is a list of hecm reverse mortgage counselors in colorado.
To find a reverse mortgage counselor that provides telephone and facetoface counseling. Origination fee you will pay an origination fee to compensate the lender for processing your hecm loan. Hecm counselors welcome to fhas search for hecm counselors by location or name. Connecticut is one of nine states that do not specify reverse mortgage. You can take the hud hecm exam as many times as necessary to achieve the required 80% score. Hecm counselors may not simply present information about reverse mortgages to a client. Welcome to fhas search for counseling agencies by location or name.
The session should generally last 90 minutes but can take. Preparing for your counseling session the decision to get a reverse mortgage is an important one. Borrowing against your home october 2010 update since the publication of this booklet in 2008, there have been a. Connecticut is one of nine states that do not specify reverse mortgage counseling requirements in statutes. Are you a hecm counselor and need to meet your biannual training requirement. To find a reverse mortgage counselor that provides telephone and facetoface counseling nationwide, use the hud intermediaries providing hecm counseling nationwide list.
Waiver of hecm counseling fees and activities included in the time recorded portion of the hecm counseling certificate. The hecm program is fhas reverse mortgage program that enables seniors who have equity in their homes to withdraw a portion of the accumulated equity. A home equity conversion mortgage hecm or reverse mortgage is a special type of mortgage for people over the age of 62 who own their own home outright or have substantial equity. Borrowing against your home october 2010 update since the publication of this booklet in 2008, there have been a number of important changes in the reverse mortgage world. Specifically, the housing counseling handbook outlines requirements for program eligibility and approval, the delivery of comprehensive and home equity conversion mortgage hecm counseling services. Reverse mortgages new counseling disclosure requirements. About cambridges reverse mortgage counseling division. Your guide to reverse mortgage counseling newretirement.
Counselors are allowed to provide the required reverse mortgage counseling to a group of related family members if they are documented on the deed together. Upon completion of the counseling session, the counselor will mail a hecm counseling certificate to the homeowner for. Fees for counseling vary from community to community. The department of housing and urban development hud and the federal housing administration fha.
To arrange a counseling appointment, call 856 4561121 extension 145. It is intended to give users a general idea of approximate costs, fees and available loan proceeds under the fha home equity conversion. For purposes of talc calculations, a hecm is considered less expensive if the appreciation rate of the home is low to moderate, because the loan balance will be limited by the home value sooner in a situation involving lower appreciation, thus enabling the homeowner to withdraw more money without adding to the loan balance. Understanding reverse mortgages simplifying the new reverse.
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