Reverse Mortgage: New Counseling Requirements

The Federal Housing Authority, FHA, has updated the counseling requirements for the HECM program. As a mature American, age 62 and older, you may be eligible to participate in the HECM program if you currently reside in your home as your primary residence and need additional income. Now you can also have the peace of mind knowing the FHA has required additional requirements for counseling mature Americans such as yourself regarding HECM programs.

Your HECM Housing and Urban Development, HUD, counselor must take and successfully pass an exam which ensures their advanced knowledge of the HECM program and its product offerings for mature borrowers. You are now able to speak with a HECM counselor who is knowledgeable and able to assist you without leaving you with unanswered questions and concerns.

Your HECM lender is no longer allowed to contact a HUD approved counselor for you. This new approach allows you to locate a HECM counselor you are comfortable with, rather than being placed with someone who may not possess detailed knowledge that you are in need of to render an informed decision.

Your selected lender is required to give you a list of at least 10 HUD approved HECM counselor. At least five of those HECM counselors must be local, either state or local to your residence and at least one of those HECM counselors must be within a reasonable driving distance in order for you to have a face-to-face interview with the HECM counselor. No more missed calls or length phone calls, you are now able to speak with a HECM counselor in your area.

Your HECM counselor must now thoroughly assess your financial capabilities by performing a financial analysis which is specific to your current and future situation. You will be able to make an informed decision based on your ability to repay the loan once the maturity date is reached. No more guessing or worrying about the loan maturity date. With a full assessment of your finances you have the ease in knowing if the HECM program is a right fit for you.

In order to ensure you are fully aware and understand the requirements of the HECM program you must now take a quiz, which includes 10 questions selected by your counselor, to determine your understanding of the program requirements. You only have to successfully answer five of those ten questions. Upon successful completion you will be issued the Certificate of HECM Counseling. If you do not successfully answer the five questions you will be allowed to retest after seven days of the initial test and you will participate in a limited counseling session as a measure to ensure understanding.

Your HECM counselor is required to discuss the HECM eligibility requirements, financial implications and the alternatives to obtaining a HECM loan. The counselor will also discuss your provisions for the loan maturity date and your expectancy on loan repayment. Your HECM counselor will give you a loan comparison sheet, an amortization sheet and a booklet issued by the National Council on Aging. This information and booklet will give you additional information about the HECM program and will serve as a reference for making a more informed decision.

You can contact a Griffin Financial Mortgage, LLC lending representative for a list of HUD approved HECM counselors or visit Reverse Mortgages.