Comments on: HECM Counseling Receives Additional Funding http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/ Reverse Mortgage News and Information Fri, 21 Nov 2008 19:18:05 +0000 http://wordpress.org/?v=2.3.1 By: FHA Guidance Needed On Borrower and Lender Paid Counseling at Reverse Mortgage Daily http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2315 FHA Guidance Needed On Borrower and Lender Paid Counseling at Reverse Mortgage Daily Wed, 31 Oct 2007 22:18:54 +0000 http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2315 [...] HUD issued the original guidelines in early October the wording was very general and left much open for interpretation.  Specifically for procedures [...] […] HUD issued the original guidelines in early October the wording was very general and left much open for interpretation.  Specifically for procedures […]

]]> By: Jim Frannea http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2277 Jim Frannea Thu, 25 Oct 2007 20:54:19 +0000 http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2277 Let me see if I have this right. The lender refers the client for counseling and the counseling agency spends 1.5 to 2 hours counseling the client. The client then gets the loan and has a pocketful of money. The lender makes a bunch of money and if the counseling was done after January 2008 they get stiffed. How about the loan agent, the escrow company or the title insurance companies involved in the loan, do they get stiffed too! How many loans do you think would be made if these people were not guaranteed payment for services provided. The good ole non-profit credit counseling agencies will soon be a thing of the past. Ask the Bankruptcy trustees, they want to allow only payment of 50 cents on the dollar to the credit counseling agency for counseling. I guess that they think that cca's have a sugar daddy somewhere that will cover the other 50%. JF Let me see if I have this right. The lender refers the client for counseling and the counseling agency spends 1.5 to 2 hours counseling the client. The client then gets the loan and has a pocketful of money. The lender makes a bunch of money and if the counseling was done after January 2008 they get stiffed. How about the loan agent, the escrow company or the title insurance companies involved in the loan, do they get stiffed too!
How many loans do you think would be made if these people were not guaranteed payment for services provided.

The good ole non-profit credit counseling agencies will soon be a thing of the past. Ask the Bankruptcy trustees, they want to allow only payment of 50 cents on the dollar to the credit counseling agency for counseling. I guess that they think that cca’s have a sugar daddy somewhere that will cover the other 50%.

JF

]]> By: Reverse Mortgage Counselor http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2192 Reverse Mortgage Counselor Thu, 11 Oct 2007 22:57:24 +0000 http://reversemortgagedaily.com/2007/10/07/hecm-counseling-receives-additional-funding/#comment-2192 If counseling agency counsel clients at the same rate as last year, we can expect the $3mill to money to run out by January 08. The rule will allow agencies to charge clients at any stage, I think it would be nice if we could use HUD funds to pay for counseling where no loan is closed, but that would take coordination of all the HUD counseling agencies and lenders. In my experience lenders will send their clients to whatever agency is providing free counseling, and counselors will provide lots of sessions until the money runs out. Last year lenders/borrowers got a break as several big counseling organizations did free or almost free counseling even after the HUD money was exhausted. That won't happen again this year, the agencies cannot afford it. So borrowers/lenders can expect plenty of free counseling to be available for a few months, then either the agencies get paid or there will be a real problem getting counseling in a timely manner. At least the HUD rule provides an option which will allow costs to be passed on to borrowers, hopefully in years to come we can find a way to use the HUD is a more strategic way. If counseling agency counsel clients at the same rate as last year, we can expect the $3mill to money to run out by January 08.

The rule will allow agencies to charge clients at any stage, I think it would be nice if we could use HUD funds to pay for counseling where no loan is closed, but that would take coordination of all the HUD counseling agencies and lenders.

In my experience lenders will send their clients to whatever agency is providing free counseling, and counselors will provide lots of sessions until the money runs out.

Last year lenders/borrowers got a break as several big counseling organizations did free or almost free counseling even after the HUD money was exhausted. That won’t happen again this year, the agencies cannot afford it.

So borrowers/lenders can expect plenty of free counseling to be available for a few months, then either the agencies get paid or there will be a real problem getting counseling in a timely manner. At least the HUD rule provides an option which will allow costs to be passed on to borrowers, hopefully in years to come we can find a way to use the HUD is a more strategic way.

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