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Requesting Reverse Mortgage Counseling
Homeowners aged 62 and over can get reverse mortgage counseling for federally-insured Home Equity Conversion Mortgages (HECMs) through a national network of HECM counselors approved by the U. S. Department of Housing and Urban Development (HUD). Counseling Required
The counseling is required by HUD before a homeowner can obtain a federally-insured reverse mortgage. It generally takes at least one hour and - when provided by telephone - requires two or more calls. If you are seriously considering applying for a reverse mortgage and think you might be ready for a formal counseling session, please use the checklist below to help you decide. Counseling agencies may charge a fee for HECM counseling, but they must tell you about it before the counseling occurs, and the fee amount must be based on your ability to pay. Agencies cannot turn you away because of your inability to pay, and they cannot refuse to counsel you if you fail to pay. The maximum allowable fee in 2009 is $125 or the actual cost of providing the counseling. If your counseling agency charges a fee, they may allow you to pay it out of your loan proceeds just like other HECM fees, or you can pay it directly to the counseling agency. Lenders are NOT permitted to pay for counseling. HUD Network Counseling
The counselors in HUD's National HECM Counseling Network are employed by local HUD-approved counseling agencies. These counselors achieved a required score on a national HECM counselor exam approved by HUD, and have been authorized by HUD to provide HECM counseling by telephone on a nationwide basis. They use loan software that meets model specifications for analyzing and comparing reverse mortgages. Most counselors provide in-person counseling in their local areas, and many also provide counseling by telephone in other areas nationwide.
All counseling sessions are confidential. HUD-approved HECM counseling agencies are required by HUD to "hold in strict confidence all client information regardless of the source" (HUD Handbook 7610.1). Counseling can be requested by a homeowner or an owner's authorized legal representative. Authorized legal representatives can be a guardian, conservator, or a person holding a durable power of attorney who has been authorized to act in this matter by the owner.
Are You Ready to Request Reverse Mortgage Counseling? | Considered All Your Options? | | Yes | No | | | | | Have you looked into ALL your options?
| | Are You Eligible? | | Yes | No | | | | a) Are you and all other owners of your home at least 62 years old? | | | | b) Does each owner live in the home at least six months out of the year? | | | | c) Is the home a single family residence, duplex, triplex, 4-unit residence, a condominium, or a planned unit development (PUD)? | | | If you answered "Yes" to questions a, b, and c, then most likely you are eligible. But only a HECM lender can determine for certain if you are eligible for a HECM.
If you answered "No" to question c, you may still be eligible if you live in certain types of manufactured housing, but not if you live in a mobile home. To see if your home is "manufactured" or "mobile," contact a HECM lender from the HUD list at www.hud.gov/offices/hsg/sfh/hecm/hecmhome.cfm/ | | Could You Get Enough Money? | | Yes | No | | | | Could a reverse mortgage give you the amount of money you would need to get from it? Use the calculator at http://www.rmaarp.com/ to estimate how much you could get from a HECM. Here are some things to keep in mind: If you now owe any money on a debt against your home, you would have to pay off the full amount you now owe in order to get a reverse mortgage. But you could use money from the reverse mortgage to do that. For example, if you now owe $20,000 on a home equity loan and could get $100,000 from a reverse mortgage, you could use $20,000 from the reverse mortgage to pay off the home equity loan - which would then leave you with $80,000 from the reverse mortgage.
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If you answered "Yes" to the questions above, then you can request a counseling referral via the HUD's National HECM Counseling Network.
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