The Counselor’s Role

Last Updated on Thursday, 18 February 2010 17:20 Written by Debbie German Friday, 18 September 2009 16:36

The major objective of HUD- approved counseling agencies is to counsel seniors, their families and other advisors on the reverse mortgage program. Their goal is to make them feel comfortable by personalizing the information about the reverse mortgage program to fit the seniors’ needs, as well as educating them about the program. Seniors are made to feel like they are active participants in the counseling session.

The most important role of a counselor is to educate the senior in order to meet their financial needs and long-term goals.

Testimonial:

This is a letter that I feel should be written. I have been dealing with several counselors in your offices for the past several weeks. I am trying to obtain a Reverse Mortgage for my mother, and unfortunately, there have been many obstacles. I have made several phone calls and I wish to commend everyone that I spoke to for their courtesy and help. At no time did I feel that I was bothering them. The counselors went out of their way to help me in this trying process and I wanted you to know how grateful I am for their kindness. Thank you and the counselors that I spoke with for their help and courtesy. It is appreciated very much.

- Client in Monmouth County, New Jersey

I just wanted to express my gratitude towards your counselors for taking the time to help me with my mom and my loan problems. The counselor spent so much time on it, even though there were other things to do and we really appreciated it. Thank you so much!

- Client in Riverside Country, CA

I would like to say Thanks for taking time out to help me in my extreme situation. There should be more people out in this world like your counselors.

- Client in Riverside Country, CA

The HECM counseling session is comprised of many components per HUD protocol and HUD guidelines. Topics covered during the educational counseling session include, eligibility requirements, loan features, options, loan costs, tax implications, alternatives to Reverse Mortgages, and after closing the loan (This is still an incomplete thought. Please clarify), such as keeping the property taxes and homeowners insurance current at all times unless they have decided to have funds from the loan withheld to ensure these payments are made, making sure the home is well maintained and repaired, advising the senior to make sure all the loan documents are carefully read to make certain the information was understood. However, the most important component is to ensure the senior is educated in order to make a well-rounded and informed decision.

Agencies must maintain high standards in meeting senior’s goals and expectations without endorsing, promoting, or representing any specific product or lender. A trained HECM counselor’s major responsibility is to ensure the delivery of quality and educational counseling. The counselor should remain objective as well as sensitive when educating the senior on the reverse mortgage products.

The need for a reverse mortgage is typically based on personal and financial goals as well as alternatives and implications of a reverse mortgage.

A series of topics surrounding the counseling session must be covered, including costs to obtain the loan, alternatives to a reverse mortgage, such as senior resources, community- based programs, public benefits, and selling and moving options. It is also important for seniors to understand their needs as well as the steps in the lending process.

Testimonial:

I would like to express my thanks and admiration for a fine job the counselors are doing and the reverse mortgage counseling provided. Counseling those of us who need financial help regarding the pros and cons of a Reverse Mortgage was one of the most helpful things offered. The counselor enabled me to see the pluses and minuses of the various scenarios available. The counselor was very professional and competent and yet expressed empathy for my particular circumstances.

- Client in San Diego, CA

Testimonial :

I wanted to thank you for your counselor’s kindness and attention in the past several weeks, and particularly my appreciation and gratitude to your counselors. They were more than helpful in ferreting-out some of my concerns and the cordiality extended to their availability to answer any of my subsequent questions I might have at a later time. For individuals in my particular situation, I find it comforting that your company recognizes the unique concerns of your clients and that your organization is empathetic to each individual. Thank you again for the services that you provide.

- Client in Riverside Country, CA

The main objective and primary importance is that the senior is able to understand the concepts being presented to them throughout the educational counseling session.
As the market expands within the reverse mortgage sector, increased publicity is playing a larger role in the educational phase of reverse mortgage counseling. Therefore, more seniors are educating themselves about the product prior to their counseling session.

Common questions asked by seniors pertain to costs, specifically the mortgage insurance premium and the benefits involved. Once the counselor explains the
feature of the MIP, the senior understands the protection benefit being provided in the program.
 

• Additionally, what happens if I run out of money and/ or equity? Seniors want to be reassured they will not be required to leave their home if they deplete funds or the balance of the loan is higher than the value. Seniors are advised of the default conditions.
• Is my line of credit safe given the current economic situation? Seniors are very insecure about this feature. Again, they are looking for reassurance that the credit line will not diminish due to market values declining.

Many seniors are refinancing their HECM loans from an adjustable rate HECM to a fixed rate HECM and at this point, many seniors understand the program and its benefits and seek security through the fixed rate option.

HECM for purchase

Seniors are beginning to understand the benefit of the HECM for purchase as a way to invest in real estate either by purchasing a second home or moving from their children’s home back into their own home, once again regaining their independence. Seniors are utilizing the HECM for purchase to downsize from a large home. Or have decided the maintenance is too much to take care of, the senior chooses a senior friendly home and community.

Seniors are advised the HUD approved counseling agency is an independent third- party having no connection to the lenders or the process of the loan. Furthermore, the counselors are available to assist the senior and family members or advisor as they progress toward their housing goals.

The reverse mortgage industry continues to prepare for the expanding educational needs of the upcoming “Baby Boomer” generation as they prepare to enter their retirement years.

“Our people improve the lives and financial well-being of individuals and families by providing quality financial education and counseling”.

“Those who teach must never stop learning”