HUD Offers $8 Million For Reverse Mortgage Counseling

June 19th, 2009 | by John Yedinak Published in Counseling, FHA, News, Reverse Mortgage | 7 Comments

The US Department of Housing and Urban Development announced that more than $58 million is available for a broad range of housing counseling programs to help families and preserve housing. The funding is an increase of $11 million, up 23% from last year according to a statement from HUD.

“Now, more than ever, it is crucial that American families make informed decisions about their housing choices,” said HUD Secretary Shaun Donovan. “These counseling agencies are also vital to the success of the President’s Making Home Affordable Plan which is helping families avoid foreclosure and remain in their homes.”

Of the $52 million, HUD’s Housing Counseling Grant program will provide approximately $8 million for Reverse Mortgage Counseling. The grants will be awarded competitively to hundreds of HUD approved counseling agencies and State Housing Finance Agencies. HUD will award grants to approximately 400 applicants. Applications may be downloaded from HUD’s website.

Applications must be postmarked on or before July 17th and received by the designated reviewing office within five days.

HUD Offers $58 Million For Housing Counseling

Technorati Tags: Reverse Mortgage,News,HECM,FHA,HUD,Counseling

Email This Post

Print This Post

Related Posts

http://www.moneymanagement.org Daniel Fenton

This is great news for seniors. The $8 million represents a 100% increase over the 10/2007-9/2008 allocation of $4 million for HECM Counseling.

It’s not enough to find all HECM Counseling we expect to be needed next year, but doubling the counseling industry’s ability to offer free or reduced cost service is a very significant move in the right direction.
Joe DeMarkey

While this grant will certainly fall short of the total funding needed (estimated to be at least $18MM), this is good news for senior homeowners across the country.

Congress just saved senior homeoqners who receive HECM counseling next fiscal year an additional $4MM compared to the current year.
http://www.topdot.com Stuart N. Laufe

The addition of funds is an excellent show of faith, and support to our senior communities accross the country.

Will HUD be extending the maximum limit of $625,500.00 beyond the December 31,2009 target ending date.As this too is much needed in supporting our senior homeowners,in supporting their continued needs.
http://www.thereversemortgageschool.com Kevin Reichard http://thereversemortgageschool.blogspot.com/

Did I miss something? Did we not just have a rule change that required the clients to pay for counseling? Who exactly gets to use the 8 mil?
http://www.moneymanagement.org Daniel Fenton

Hi Kevin, the $8 million are grant funds granted Housing Counseling Agencies. They in turn use these to cover their cost of counseling and provide free or subsidized counseling sessions.

Clients are not required by law to pay for counseling, but without grant dollars it’s sometimes difficult to find Counseling Agencies prepared to do it for free.
James E. Veale, CPA, MBT

Mr. Fenton and Mr. Reichard,

The late September 2008 rule change implemented HERA requirements. It prohibits mortgagees from directly or indirectly advancing funds for counseling fees. Such payments had the appearance of a potential conflict in interest for the counseling agencies. Congress believed it was imperative to insure counseling agencies are independent in fact and in appearance; mortgagee payments compromised that standard.

Mortgagee Letter 2008-28 states in part:

Section 2122 of the “Housing and Economic Recovery Act of 2008″ (HERA) (Pub. L. No. 110-289), enacted July 30, 2008, requires that the HECM mortgage must be executed by a mortgagor who received adequate counseling from an independent third party that is not either directly or indirectly associated or compensated by a party involved in 1) originating or servicing the mortgage; 2) funding the loan underlying the mortgage; or 3) the sale of annuities, investments, long-term care insurance, or any other type of financial or insurance product.

No Permissible Method for Payments

Lenders can no longer pay HUD-approved counseling agencies, directly or indirectly, for counseling services through either a lump-sum payment or on a case-by-case basis. An example of prohibited indirect funding is Lenders funneling payment for HECM counseling through a nonprofit, foundation, association or any other entity or organization that is a branch of, affiliated with or associated with a lending institution
James E. Veale, CPA, MBT

Like Mr. DeMarkey and Mr. Fenton, I believe that this funding is a positive move by HUD. It is hoped that the increased funding will offset new costs incurred in counseling and even provide for more free counseling.

Not that many years ago, almost all counseling was funded by HUD. Many of us are hopeful those days may yet return. Removing this financial barrier is a very positive step forward for seniors.

HUD Offers $8 Million For Reverse Mortgage Counseling

Wholesale Lender Sponsors

Sponsors

Exclusive Training Provider

Reverse Mortgage Jobs

Recent Articles

Popular Posts

Our Sites