The US Department of Housing and Urban Development will publish a new reverse mortgage counseling protocol next month according to the National Reverse Mortgage Lenders latest Monday Report. After the protocol is published, HUD said it will take effect 30 days later.
Included in the new protocol is a new financial interview tool (FIT) that counselors must utilize to help a prospective borrower asses the financial viability of remaining in their home said NRMLA.
The goal is to help counselors determine whether a reverse mortgage is the most appropriate option and whether after getting a reverse mortgage, the borrower(s) is still able to meet their contractual obligations, such as payment of taxes and insurance and maintaining the structural soundness of the home.
“My initial take is that handled correctly, it will be good for counseling,” said Daniel Fenton, Housing Director at Money Management International in an email to RMD. “It’s probably going to increase counseling time, but I think it gets at a series of issues around financial sustainability which clients really should be thinking about.”
We wrote about how HUD should develop a tool like this that provides objective information about a borrowers situation, maybe they were listening.