In response to rapid growth in the number of seniors applying for reverse mortgages, the U.S. Department of Housing and Urban Development has issued a notice expanding the network of counselors authorized to provide mandatory, face-to-face and/or telephone counseling nationally.
Before a reverse mortgage application can be processed, a prospective borrower must first meet with an independent counselor. Both HUD and the American Association of Retired Persons oversee a network of counselors who review reverse mortgage transactions with every prospective borrower, answer any questions the borrower may have about reverse mortgages and provide information on alternative options.
"Put simply, there weren't enough trained individuals to handle the high volume of counseling requests," said Peter Bell, president of the National Reverse Mortgage Lenders Association (NRMLA). In some parts of the country, eligible borrowers are waiting four-six weeks or longer to schedule counseling sessions.
To help reduce the backlog, HUD is allowing counselors from the National Foundation of Credit Counselors (NFCC) and Money Management International (MMI) to provide face-to-face and telephone counseling. NFCC and MMI hope to add up to 250 trained counselors to the network over the next several months.
For a fifth consecutive year, lenders originated a record number of federally insured reverse mortgages, and the volume of borrower applications being processed is even higher, according to NRMLA. During the most recent federal fiscal year, ending Sept. 30, the Federal Housing Administration insured 43,131 Home Equity Conversion Mortgages (HECMs) compared to 37,829 the prior year. HECMs account for over 80 percent of all reverse mortgages made in the United States.
HUD has published the following toll-free phone numbers for consumers to access a reverse mortgage counselor: NFCC at (800) 209-8085, MMI at (866) 698-6322 and AARP at (877) 908-2227.
For more information, visit www.hud.gov.