RIP HECM Advisor Program

Headston Wholesale reverse mortgage lenders continue to eliminate their HECM Advisor program due to HUD officially killing it with their recent mortgagee letter.  There are plenty of people who used the program responsibly but many feel the HECM advisor program was to blame for some of the problems our industry has faced with unscrupulous lenders.  Overall I think the elimination of the program in a good sign because it shows that HUD is starting to implement provisions from the housing Bill that was signed into law in July.

I’ve seen announcements about discontinuing the program from Countrywide, Senior Lending Network, Bank of America, and Liberty.  According to the alert from Liberty:


We will not allow any Advisory Fee to be paid out of escrow for a non-FHA approved Partner under the HECM Advisor Program unless the loan has an FHA case number before October 1, 2008.

Other lenders are taking the same stance. Effective October 1, 2008, ML 2008-24 restricts the origination of HECMs to

  1. FHA-approved loan correspondents/sponsors
  2. FHA-approved mortgagees through their retail channels
  3. FHA approved lender working with another FHA approved lender

RIP HECM Advisor.

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  • ood day,

    It appears HUD is saying as long as the broker/lender is an FHA approved lender they can participate in the HECM Advisory program/ Can we all assume the FHA Approved lender can operate under the old guidelines of the HECM Advisory program? In short, what I am asking and saying is can the FHA Approved lender just act in an advisory capacity and do ONLY the things required under the old HECM Advisory program. In other words, am I to assume they do not have to take the application if they choose not to. This is a very important question. I wish some one can give me that answer ASAP and be positive of their answer when giving it to me. My appreciations extended.

    The Great American Philosopher


  • What a joke this program has been. Here in California any real estate person can do mortgages. No further license is required. With originators restricted from doing real estate transactions requiring a real estate license how could real estate people be compensated for providing information on reverse mortgages. What irony!

    I know some believe they are being punished for the irresponsible actions of others, but are even the majority of these individuals willing to be subjected to the errors committed by their “advisors”? When even felons can be originators or their managers, how is it that anyone really believes that even a majority of these “advisor” programs were being properly monitored. I heard of fees of 50% for mere introductions and other spurious levels of compensation for little or no services rendered.

    While I sympathize with those who are losing revenues, I do not sympathize with the continuation of this program. Good riddance.

  • Jim,

    I don’t agree with you, this program was not a joke! Also sir, the ending of your statement (Good Riddance) definitely was not called for and shows your lack of professionalism. Your situation in California is to bad but it is your problem, many other states have licensing and educational requirements. AS far as the HECM Advisory program, I am not going to waste my good advise or time explaining the facts to some one with your lack of knowledge and arrogant manner!

    Good day,

    The Great American Philosopher


  • To the Great American Philosopher:

    The facts are the so-called HECM Advisor Program was terminated by Congress and HUD acted quickly to rescind the mortgagee letter allowing it. It seems that not only does a lowly California originator not have the benefit of your insights as to the values of this program, neither did Congress when they terminated it.

    If you want it back, you should seek redress through Congress. Perhaps NRMLA or even HUD itself will champion your legislation. I know you are not the only person who supports it.

    Apparently more than just this lowly California originator wanted it terminated. Even a few people who live outside of California helped end it.

    I apologize if my celebration offends you. But, sir, please spend less time on your philosophy and more on spelling, writing, grammar, and typing.

    An less than average American Jim

  • Jim,

    I Don’t need to carry on a conversation like this, it does not help any one, especially in these times. You need to read the entire regulations governing the HECM Advisory program. The same goes for the many people that need and should read the entire Housing Recovery before making comments, for or against.

    Good day,

    The Great American Philosopher.


    SPONSORED BY: John A. Smaldone

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