Comments on: FHA Developing Method to Mathematically Determine Reverse Mortgage Eligibility

By: jamesanelson

jamesanelson — Fri, 11 Dec 2009 16:12:05 +0000

Very interesting, Mr. Hamilton. I, too, believe in face to face, except where distance makes it impossible and the borrower insists on working with me.
I guess I place more emphasis upon the importance of the competion of the Counseling session by the Client than you do. I strongly feel if the Senior will not go through the Counseling process, one is just wasting his time.
No use creating “files” for the “drawer” unless they will get used, in my opinion.

By: peterhamilton

peterhamilton — Fri, 11 Dec 2009 15:54:02 +0000

In context, the term referral means to the counseling agencies.

As far as "lender may complete the borrowers application" goes, it is just that. We have applicant sign and date all loan application documents and disclosures (and leave copies of all of these for them) , and collect from applicant the tax, insurance, current mortgage bills, and proper id.

As an originator who only works face to face, this gives the applicant all the items they would want to have handy for reference when they do the counseling and, in most circumstances, it saves me a second home visit.

Signing all the disclosures also serves as further program education.

We stress that this file will "just go in a drawer" and nothing will happen until we receive the counseling cert from the borrower.

By: jamesanelson

jamesanelson — Thu, 10 Dec 2009 16:09:39 +0000

Talk about dummies: Please substitute “are” for “or”.

By: jamesanelson

jamesanelson — Thu, 10 Dec 2009 16:07:57 +0000

Thank you, Mr. Hamilton: This is indeed definitive; however, to whom does the term “referral” apply? I assume the Counseling Agency but, than again, I've learned not to trust assumptions (especially when this dummy is doing the assuming!) Also, what “service” or they describing–the taking of the application by the Loan Originator?. It would seem to me the simplest step is to not do anything other than talk with the potential client until after the FHA HECM Counseling session is completed and a Certificate is issued.
What is your position, please?

By: peterhamilton

peterhamilton — Thu, 10 Dec 2009 14:20:33 +0000

Mr Nelson-

Here's the link from HUD:
http://www.hud.gov/offices/adm/hudclips/handboo…

C.The lender may complete the borrower's application before referral, however, the lender can not charge the borrower for this service if the borrower does not choose to attend a counseling session or apply for a HECM after counseling. The lender can not begin the process of ordering a property appraisal or any other action that would result in a charge to the potential
borrower until the borrower has received counseling, and the lender has received the counseling certificate from the borrower.

By: jamesanelson

jamesanelson — Thu, 10 Dec 2009 02:01:20 +0000

Thank you, Mr. Hamilton: My only question would be about the date of the document. A lot can change in a year and a half. Are those statments still
effective today? And this is a Guide from a private Company; is there something similar from HUD/FHA?

By: peterhamilton

peterhamilton — Wed, 09 Dec 2009 22:29:20 +0000

For Mr Nelson-

From Financial Freedom Underwriting Guide.

8.10.c. Activities Allowed Prior to Counseling
Updated 02/21/08
For all products, the following activities are allowed prior
counseling:
􀂾 Educate the borrowers about reverse mortgages and discuss
whether the potential borrower is eligible.
􀂾 Discuss fees and the potential implications of a reverse
mortgage.
􀂾 Provide the borrower with the appropriate lists and counseling
options.
􀂾 Ensure that potential borrowers have not incurred any financial
obligation until after receipt of the counseling certificate signed
by the counselor and all borrowers, and the borrower reaffirms
intention to continue with the application.
Additional guidelines for HECM and Cash Account products
(Note: The last day to fund Wholesale Cash Account loans is
7/31/08.)
Prior to counseling, Sellers may take an application and provide the
borrower with copies of the mortgage, note, and loan agreement.

By: markjudge

markjudge — Wed, 09 Dec 2009 17:09:48 +0000

Jamesanelson

No worries, I have been known from time to time, especially in a debate or intense conversation, to use an incorrect word. I just thought you might have wanted to know. I hear people say things like " they were like two peas in a pot" and I think, "why hasn't someone told them it is pod, not pot". I know I would want someone to let me know if I was using thre wrong word.

In regards to needing the counseling certificate before the client signs the hecm application, I have not been doing it that way and it has not been an issue. My understanding is that the only things you cannot do before counsel is pull their credit and order appraisal and title.