Counseling not the problem, reverse mortgage misconceptions are

NewImage.jpgAfter the Massachusetts Senate approved legislation requiring a certain group of seniors receive face to face counseling sessions before they enter into a reverse mortgage, the local press is picking up on how it could impact reverse mortgages in the state.

Sponsored by Sen. Susan Tucker (D-Andover), the changes were included as part of a bill meant to crack down on foreclosure procedures.  The bill which passed the senate earlier this month requires that reverse mortgage borrowers who make less than half of their area’s median income and have assets worth less than $120,000 outside of their home get face-to-face financial counseling.

Despite the numerous protections and guidelines at the federal level for reverse mortgage counseling, Tucker feels more are needed.  “One thing everybody agrees on is that these instruments are extremely complicated,” Tucker told WB Journal. “It sounds so easy, and they’re sold as lifestyle enhancers rather than instruments of last resort.”

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The publication reports that lenders in the state say the new requirement would have little value for borrowers.  Some even say the real problem is not that the loans are too easy to fall into, but that potential borrowers are scared away from them by misconceptions.

Dick Williams, senior vice president of mortgage lending at Rollstone Bank & Trust in Fitchburg, said the bank has been doing reverse mortgages for about five years and has done about 100 of them.  Almost all of the borrowers the bank has helped have done counseling over the phone says Williams.

“That tells me that it’s more convenient for these seniors to do phone counseling, as opposed to getting in their car to do something face-to-face,” Williams said.

Bruce E. Spitzer, director of communications for the Massachusetts Bankers Association, said the proposed change would be logistically difficult. Especially for people in rural areas, and for those with limited mobility, he said in-person counseling could be a challenge. And he said the organizations that do the counseling would have to ramp up their staffing to handle more in-person contact.

The Senate bill provides an 18-month delay before the change would go into effect, but Spitzer said that might not be long enough to get everything in place.

In Massachusetts, there is a lack of physical counseling locations.  The state requires counseling agencies be approved by the US Department of Housing and Urban Development and the Department of Elder Affairs.

When we wrote about this earlier, RMD asked Tucker what she would do to help ensure seniors would be able to find face to face counseling we received no answer.  They were happy to discuss other aspects of the bill with us but when the tough questions were asked they were ignored.

WB Journal does a great job covering how the bill could impact the bill, definitely worth the read.

Banks Bristle At Reverse Mortgage Rules

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  • HECM Vet,rnrnStating u201cu2026just as a student gets more from classroom instruction than some of the remote alternativesu201d reflected u201can interesting biasu201d about the classroom experience. To equate that concept to face-to-face counseling indicated u201ca general misunderstandingu201d of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.rn

  • Cynic,nnJust exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?nnYou failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.nnYour belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

  • HECM Vet,rnrnYour comment reflects an interesting bias and a general misunderstanding of the purpose of counseling. As to education, how each person learns best — in which subjects and in what kind of environment — varies greatly. u201cOne size (the classroom) fits all bestu201d is simply not true and is generally considered to be the propaganda of the NEA.rnrnIf the chief purpose of counseling is merely to teach and to measure the level of learning achieved, then face-to-face testing should be instituted immediately. But counseling is generally expected to be much more than that.rnrnSince it seems reasonable to assume that most legislators do not have a solid understanding of the HECM process, it is important to determine their expectations from counseling and then sit back to muse over the situation. Counseling is not teaching as much as it is tutoring and true counseling. While I expect counselors do their best, the question is do they have the training and skill set needed not just to assess the understanding of the senior as to the HECM but also meet the other expectations HUD, state legislators, and others including Dr. Barbara Stucki have in mind.rnrnSeniors are and should be treated as a protected class. Yes, Warren Buffett, Hillary Clinton, Karl Rove, Fred Thompson, Dan Wallace (and his son, Chris), and many Americans who are over 62 and currently have a mastery of their mental faculties the majority of Americans have rarely experienced. But it is also true that as seniors age, their reliance on quick determinations increases and their skill in performing careful initial detailed analysis diminishes. I have never read or heard about a single credible study which promotes the idea that Parkinsonu2019s disease, muscular dystrophy, brain injury from stroke, and Alzheimeru2019s disease are limited to the poor and do not impact the rich or brillant. It is also true that after middle age (and some much earlier) the older we grow, the more dependent we become.rnrnIn a face-to-face meeting, many things become somewhat more detectable and certainly more observable than over the phone, such as signs of duress and undue influence, a younger person pretending to be the senior, the level of response, and indications of mental haze caused by prescriptions and other substances. Also it becomes easier to direct seniors to the community and government services and agencies that might be most helpful to them.rnrnSo until we understand the expectations legislators have from counseling, it is difficult to comment on their intent and why their legislation might be better served through telephone or even online counseling. I am afraid legislators and society in general may expect counseling to provide much more than we as originators believe it should or was originally designed to do. rn

  • Mr. Fenton,rnrnYour practical insights are extremely helpful. It is easy for anyone to overlay their local experiences into a different region of the country and reach the wrong conclusion. It is important that HECMs are equally accessible for all qualifying seniors in the country.rnrnCan you describe the concerns of the legislators? Would having a face-to-face required originator meeting if the senior does not choose face-to-face counseling help? Or are the regulators looking for counseling to be held in what they perceive as a more conducive environment?rnrnOnce this procedure is implemented, no doubt other states which provide strong senior consumer protections will follow. Are there other states such as California where you would have similar concerns?rn

  • I think many good points were made here, however I have to disagree with Brian White from Chicago in doubting that a shortage of face to face counseling will discourage seniors in moving on with the reverse mortgage application process.

    It is worth remembering that the counseling agencies in MA usually have only one eligible counselor per office and that housing counselors are generally not dedicated to HECM counseling full time, often struggling to help record numbers homeowners avoid foreclosure.

    Our experience may be instructive. A couple of years ago MMI voluntarily restricted access to HECM counseling by phone for MA residents, for several weeks while we worked out exactly what the Exec. Office of Elder Affairs required of us. The result was counseling wait times stretched out to more than 6 weeks. Since then, the counseling capacity in MA has actually decreased (with the introduction of the HECM Counseling Roster), so I predict that a universal face to face requirement will create significant access problems.

    Hopefully a reasonable compromise can be developed protecting access to face counseling for those who want it, but allowing telephone counseling for those who choose this option.

  • There is no doubt seniors would get more out of face-to-face counseling than from a telephone session, just as a student gets more from classroom instruction than some of the remote alternatives.

    When I originated my first HECM loan some 20 years ago, anything but in-person counseling was unheard of, and a face-to-face application interview was mandatory (usually, these happened on the same day). And the financed origination fee was limited to $1,800.

    In the early years of reverse mortgages, there was a marked contrast between the HECM and some of the proprietary products of the time that involved shared-appreciation or shared-equity features, among others. Many, if not most, consumers had never heard of a reverse mortgage, and prospective borrowers needed to be educated about the very existence of the program.

    Today, it is nearly impossible to find a senior homeowner who has not heard of a reverse mortgage. They’ve received our direct-mail solicitations and seen the familiar TV pitchmen. Articles, both friendly and otherwise, have appeared in local papers as well as national publications. Most seniors and their families have access to the Internet and can obtain a wealth of information that was unavailable in 1990.

    If seniors feels comfortable obtaining counseling and applying for their reverse mortgages over the telephone, by mail or even on-line, they should be allowed to do so, provided reasonable precautions are taken to assure they possess the capacity to understand and enter into the transaction.

  • The author did a great job in trying to provide a balanced view. The internal bank procedure Joseph Festa presented was interesting even if he showed his ignorance about reverse mortgages currently when he seemed to voluntarily opine.rnrnThe author who appears to be a good writer, messed up when she described reverse mortgages. I really wish NRMLA had a media packet and a team of people to contact reporters (especially newpaper, radio, and TV) and increase their understanding of HECMs and other reverse mortgages. Maybe, just maybe, these reporters would come to NRMLA for balanced information when they wanted to do another piece on our products.

  • There should be a provision that allows seniors who don’t have access to face-to-face counseling to have over-the-phone counseling if certain criteria are met. A lot of our homeowners are handicapped or are not able to drive or find transportation easily. There should be exceptions. Brian notes that there are fourteen agencies in Massachusetts offering counseling, but that does not mean that they are spread out evenly, so that ALL seniors are living with reasonable distance to one.rnrnI also find this bill to be a bit discriminatory. It should apply to all seniors or none. Just because predators profile, doesn’t mean the government should. Seniors are still adults and still Americans. My father is a low-income senior and, although he does not need a RM, would be very angry to know that he is subject to unneccessary inconveniences just because he fits said profile.

  • According to HUD’s website, there are 14 agencies providing reverse mortgage counseling for Massachusetts. Neighboring states, such as Rhode Island, New York, Vermont, and Connecticut also have agencies that may be in reach of Massachusetts seniors. It seems doubtful that a lack of counseling will dampen the demand for reverse mortgages.nnOn the other hand, seniors may be turned off by costs associated with reverse mortgages or the net return on a reverse mortgage compared to other financial options. In our practice doing reverse mortgages, we found seniors with limited equity and limited incomes were unlikely to get a reverse mortgage because the amount of money left over after fees and required set-asides was simply not enough to meet their needs, especially when declining home values are taken into account. nnWe find that face-to-face counseling was very helpful for working with seniors to identify alternatives for meeting their housing or financial needs, especially if they decide against a reverse mortgage. It is important to note that HUD requires that counselors discuss alternative options for seniors. Counselors located in national call-centers are far less likely to be familiar with the range of local services available to seniors in a given community or to have relationships to make direct referrals. This makes them less able to support the counseling needs of the senior, which for HUD agencies, goes beyond simply counseling on the mortgage.nnA final thought is if reverse mortgage lenders feel lack of counseling is an issue, make a contribution to a local agency to pay for one or more of their counselors to get certified in reverse mortgages. There are trainings offered around the country, often with scholarships for lodging and registrations. Agencies may not have funds to pay for travel, however. A broker or consortium of brokers could donate the cost of airfare to send counselors for training and easily expand the number of qualified counselors across the state.nnBrian WhitenChicago

  • HECM Vet,rnrnStating u201cu2026just as a student gets more from classroom instruction than some of the remote alternativesu201d reflected u201can interesting biasu201d about the classroom experience. To equate that concept to face-to-face counseling indicated u201ca general misunderstandingu201d of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.rn

  • Cynic,nnJust exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?nnYou failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.nnYour belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

  • HECM Vet,rnrnYour comment reflects an interesting bias and a general misunderstanding of the purpose of counseling. As to education, how each person learns best — in which subjects and in what kind of environment — varies greatly. u201cOne size (the classroom) fits all bestu201d is simply not true and is generally considered to be the propaganda of the NEA.rnrnIf the chief purpose of counseling is merely to teach and to measure the level of learning achieved, then face-to-face testing should be instituted immediately. But counseling is generally expected to be much more than that.rnrnSince it seems reasonable to assume that most legislators do not have a solid understanding of the HECM process, it is important to determine their expectations from counseling and then sit back to muse over the situation. Counseling is not teaching as much as it is tutoring and true counseling. While I expect counselors do their best, the question is do they have the training and skill set needed not just to assess the understanding of the senior as to the HECM but also meet the other expectations HUD, state legislators, and others including Dr. Barbara Stucki have in mind.rnrnSeniors are and should be treated as a protected class. Yes, Warren Buffett, Hillary Clinton, Karl Rove, Fred Thompson, Dan Wallace (and his son, Chris), and many Americans who are over 62 and currently have a mastery of their mental faculties the majority of Americans have rarely experienced. But it is also true that as seniors age, their reliance on quick determinations increases and their skill in performing careful initial detailed analysis diminishes. I have never read or heard about a single credible study which promotes the idea that Parkinsonu2019s disease, muscular dystrophy, brain injury from stroke, and Alzheimeru2019s disease are limited to the poor and do not impact the rich or brillant. It is also true that after middle age (and some much earlier) the older we grow, the more dependent we become.rnrnIn a face-to-face meeting, many things become somewhat more detectable and certainly more observable than over the phone, such as signs of duress and undue influence, a younger person pretending to be the senior, the level of response, and indications of mental haze caused by prescriptions and other substances. Also it becomes easier to direct seniors to the community and government services and agencies that might be most helpful to them.rnrnSo until we understand the expectations legislators have from counseling, it is difficult to comment on their intent and why their legislation might be better served through telephone or even online counseling. I am afraid legislators and society in general may expect counseling to provide much more than we as originators believe it should or was originally designed to do. rn

  • Mr. Fenton,rnrnYour practical insights are extremely helpful. It is easy for anyone to overlay their local experiences into a different region of the country and reach the wrong conclusion. It is important that HECMs are equally accessible for all qualifying seniors in the country.rnrnCan you describe the concerns of the legislators? Would having a face-to-face required originator meeting if the senior does not choose face-to-face counseling help? Or are the regulators looking for counseling to be held in what they perceive as a more conducive environment?rnrnOnce this procedure is implemented, no doubt other states which provide strong senior consumer protections will follow. Are there other states such as California where you would have similar concerns?rn

  • I think many good points were made here, however I have to disagree with Brian White from Chicago in doubting that a shortage of face to face counseling will discourage seniors in moving on with the reverse mortgage application process.

    It is worth remembering that the counseling agencies in MA usually have only one eligible counselor per office and that housing counselors are generally not dedicated to HECM counseling full time, often struggling to help record numbers homeowners avoid foreclosure.

    Our experience may be instructive. A couple of years ago MMI voluntarily restricted access to HECM counseling by phone for MA residents, for several weeks while we worked out exactly what the Exec. Office of Elder Affairs required of us. The result was counseling wait times stretched out to more than 6 weeks. Since then, the counseling capacity in MA has actually decreased (with the introduction of the HECM Counseling Roster), so I predict that a universal face to face requirement will create significant access problems.

    Hopefully a reasonable compromise can be developed protecting access to face counseling for those who want it, but allowing telephone counseling for those who choose this option.

  • There is no doubt seniors would get more out of face-to-face counseling than from a telephone session, just as a student gets more from classroom instruction than some of the remote alternatives.

    When I originated my first HECM loan some 20 years ago, anything but in-person counseling was unheard of, and a face-to-face application interview was mandatory (usually, these happened on the same day). And the financed origination fee was limited to $1,800.

    In the early years of reverse mortgages, there was a marked contrast between the HECM and some of the proprietary products of the time that involved shared-appreciation or shared-equity features, among others. Many, if not most, consumers had never heard of a reverse mortgage, and prospective borrowers needed to be educated about the very existence of the program.

    Today, it is nearly impossible to find a senior homeowner who has not heard of a reverse mortgage. They’ve received our direct-mail solicitations and seen the familiar TV pitchmen. Articles, both friendly and otherwise, have appeared in local papers as well as national publications. Most seniors and their families have access to the Internet and can obtain a wealth of information that was unavailable in 1990.

    If seniors feels comfortable obtaining counseling and applying for their reverse mortgages over the telephone, by mail or even on-line, they should be allowed to do so, provided reasonable precautions are taken to assure they possess the capacity to understand and enter into the transaction.

  • The author did a great job in trying to provide a balanced view. The internal bank procedure Joseph Festa presented was interesting even if he showed his ignorance about reverse mortgages currently when he seemed to voluntarily opine.rnrnThe author who appears to be a good writer, messed up when she described reverse mortgages. I really wish NRMLA had a media packet and a team of people to contact reporters (especially newpaper, radio, and TV) and increase their understanding of HECMs and other reverse mortgages. Maybe, just maybe, these reporters would come to NRMLA for balanced information when they wanted to do another piece on our products.

  • There should be a provision that allows seniors who don’t have access to face-to-face counseling to have over-the-phone counseling if certain criteria are met. A lot of our homeowners are handicapped or are not able to drive or find transportation easily. There should be exceptions. Brian notes that there are fourteen agencies in Massachusetts offering counseling, but that does not mean that they are spread out evenly, so that ALL seniors are living with reasonable distance to one.rnrnI also find this bill to be a bit discriminatory. It should apply to all seniors or none. Just because predators profile, doesn’t mean the government should. Seniors are still adults and still Americans. My father is a low-income senior and, although he does not need a RM, would be very angry to know that he is subject to unneccessary inconveniences just because he fits said profile.

  • According to HUD’s website, there are 14 agencies providing reverse mortgage counseling for Massachusetts. Neighboring states, such as Rhode Island, New York, Vermont, and Connecticut also have agencies that may be in reach of Massachusetts seniors. It seems doubtful that a lack of counseling will dampen the demand for reverse mortgages.nnOn the other hand, seniors may be turned off by costs associated with reverse mortgages or the net return on a reverse mortgage compared to other financial options. In our practice doing reverse mortgages, we found seniors with limited equity and limited incomes were unlikely to get a reverse mortgage because the amount of money left over after fees and required set-asides was simply not enough to meet their needs, especially when declining home values are taken into account. nnWe find that face-to-face counseling was very helpful for working with seniors to identify alternatives for meeting their housing or financial needs, especially if they decide against a reverse mortgage. It is important to note that HUD requires that counselors discuss alternative options for seniors. Counselors located in national call-centers are far less likely to be familiar with the range of local services available to seniors in a given community or to have relationships to make direct referrals. This makes them less able to support the counseling needs of the senior, which for HUD agencies, goes beyond simply counseling on the mortgage.nnA final thought is if reverse mortgage lenders feel lack of counseling is an issue, make a contribution to a local agency to pay for one or more of their counselors to get certified in reverse mortgages. There are trainings offered around the country, often with scholarships for lodging and registrations. Agencies may not have funds to pay for travel, however. A broker or consortium of brokers could donate the cost of airfare to send counselors for training and easily expand the number of qualified counselors across the state.nnBrian WhitenChicago

  • HECM Vet,rnrnStating u201cu2026just as a student gets more from classroom instruction than some of the remote alternativesu201d reflected u201can interesting biasu201d about the classroom experience. To equate that concept to face-to-face counseling indicated u201ca general misunderstandingu201d of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.rn

  • Cynic,nnJust exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?nnYou failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.nnYour belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

  • HECM Vet,rnrnYour comment reflects an interesting bias and a general misunderstanding of the purpose of counseling. As to education, how each person learns best — in which subjects and in what kind of environment — varies greatly. u201cOne size (the classroom) fits all bestu201d is simply not true and is generally considered to be the propaganda of the NEA.rnrnIf the chief purpose of counseling is merely to teach and to measure the level of learning achieved, then face-to-face testing should be instituted immediately. But counseling is generally expected to be much more than that.rnrnSince it seems reasonable to assume that most legislators do not have a solid understanding of the HECM process, it is important to determine their expectations from counseling and then sit back to muse over the situation. Counseling is not teaching as much as it is tutoring and true counseling. While I expect counselors do their best, the question is do they have the training and skill set needed not just to assess the understanding of the senior as to the HECM but also meet the other expectations HUD, state legislators, and others including Dr. Barbara Stucki have in mind.rnrnSeniors are and should be treated as a protected class. Yes, Warren Buffett, Hillary Clinton, Karl Rove, Fred Thompson, Dan Wallace (and his son, Chris), and many Americans who are over 62 and currently have a mastery of their mental faculties the majority of Americans have rarely experienced. But it is also true that as seniors age, their reliance on quick determinations increases and their skill in performing careful initial detailed analysis diminishes. I have never read or heard about a single credible study which promotes the idea that Parkinsonu2019s disease, muscular dystrophy, brain injury from stroke, and Alzheimeru2019s disease are limited to the poor and do not impact the rich or brillant. It is also true that after middle age (and some much earlier) the older we grow, the more dependent we become.rnrnIn a face-to-face meeting, many things become somewhat more detectable and certainly more observable than over the phone, such as signs of duress and undue influence, a younger person pretending to be the senior, the level of response, and indications of mental haze caused by prescriptions and other substances. Also it becomes easier to direct seniors to the community and government services and agencies that might be most helpful to them.rnrnSo until we understand the expectations legislators have from counseling, it is difficult to comment on their intent and why their legislation might be better served through telephone or even online counseling. I am afraid legislators and society in general may expect counseling to provide much more than we as originators believe it should or was originally designed to do. rn

  • Mr. Fenton,rnrnYour practical insights are extremely helpful. It is easy for anyone to overlay their local experiences into a different region of the country and reach the wrong conclusion. It is important that HECMs are equally accessible for all qualifying seniors in the country.rnrnCan you describe the concerns of the legislators? Would having a face-to-face required originator meeting if the senior does not choose face-to-face counseling help? Or are the regulators looking for counseling to be held in what they perceive as a more conducive environment?rnrnOnce this procedure is implemented, no doubt other states which provide strong senior consumer protections will follow. Are there other states such as California where you would have similar concerns?rn

  • I think many good points were made here, however I have to disagree with Brian White from Chicago in doubting that a shortage of face to face counseling will discourage seniors in moving on with the reverse mortgage application process.

    It is worth remembering that the counseling agencies in MA usually have only one eligible counselor per office and that housing counselors are generally not dedicated to HECM counseling full time, often struggling to help record numbers homeowners avoid foreclosure.

    Our experience may be instructive. A couple of years ago MMI voluntarily restricted access to HECM counseling by phone for MA residents, for several weeks while we worked out exactly what the Exec. Office of Elder Affairs required of us. The result was counseling wait times stretched out to more than 6 weeks. Since then, the counseling capacity in MA has actually decreased (with the introduction of the HECM Counseling Roster), so I predict that a universal face to face requirement will create significant access problems.

    Hopefully a reasonable compromise can be developed protecting access to face counseling for those who want it, but allowing telephone counseling for those who choose this option.

  • There is no doubt seniors would get more out of face-to-face counseling than from a telephone session, just as a student gets more from classroom instruction than some of the remote alternatives.

    When I originated my first HECM loan some 20 years ago, anything but in-person counseling was unheard of, and a face-to-face application interview was mandatory (usually, these happened on the same day). And the financed origination fee was limited to $1,800.

    In the early years of reverse mortgages, there was a marked contrast between the HECM and some of the proprietary products of the time that involved shared-appreciation or shared-equity features, among others. Many, if not most, consumers had never heard of a reverse mortgage, and prospective borrowers needed to be educated about the very existence of the program.

    Today, it is nearly impossible to find a senior homeowner who has not heard of a reverse mortgage. They’ve received our direct-mail solicitations and seen the familiar TV pitchmen. Articles, both friendly and otherwise, have appeared in local papers as well as national publications. Most seniors and their families have access to the Internet and can obtain a wealth of information that was unavailable in 1990.

    If seniors feels comfortable obtaining counseling and applying for their reverse mortgages over the telephone, by mail or even on-line, they should be allowed to do so, provided reasonable precautions are taken to assure they possess the capacity to understand and enter into the transaction.

  • The author did a great job in trying to provide a balanced view. The internal bank procedure Joseph Festa presented was interesting even if he showed his ignorance about reverse mortgages currently when he seemed to voluntarily opine.rnrnThe author who appears to be a good writer, messed up when she described reverse mortgages. I really wish NRMLA had a media packet and a team of people to contact reporters (especially newpaper, radio, and TV) and increase their understanding of HECMs and other reverse mortgages. Maybe, just maybe, these reporters would come to NRMLA for balanced information when they wanted to do another piece on our products.

  • There should be a provision that allows seniors who don’t have access to face-to-face counseling to have over-the-phone counseling if certain criteria are met. A lot of our homeowners are handicapped or are not able to drive or find transportation easily. There should be exceptions. Brian notes that there are fourteen agencies in Massachusetts offering counseling, but that does not mean that they are spread out evenly, so that ALL seniors are living with reasonable distance to one.rnrnI also find this bill to be a bit discriminatory. It should apply to all seniors or none. Just because predators profile, doesn’t mean the government should. Seniors are still adults and still Americans. My father is a low-income senior and, although he does not need a RM, would be very angry to know that he is subject to unneccessary inconveniences just because he fits said profile.

  • According to HUD’s website, there are 14 agencies providing reverse mortgage counseling for Massachusetts. Neighboring states, such as Rhode Island, New York, Vermont, and Connecticut also have agencies that may be in reach of Massachusetts seniors. It seems doubtful that a lack of counseling will dampen the demand for reverse mortgages.nnOn the other hand, seniors may be turned off by costs associated with reverse mortgages or the net return on a reverse mortgage compared to other financial options. In our practice doing reverse mortgages, we found seniors with limited equity and limited incomes were unlikely to get a reverse mortgage because the amount of money left over after fees and required set-asides was simply not enough to meet their needs, especially when declining home values are taken into account. nnWe find that face-to-face counseling was very helpful for working with seniors to identify alternatives for meeting their housing or financial needs, especially if they decide against a reverse mortgage. It is important to note that HUD requires that counselors discuss alternative options for seniors. Counselors located in national call-centers are far less likely to be familiar with the range of local services available to seniors in a given community or to have relationships to make direct referrals. This makes them less able to support the counseling needs of the senior, which for HUD agencies, goes beyond simply counseling on the mortgage.nnA final thought is if reverse mortgage lenders feel lack of counseling is an issue, make a contribution to a local agency to pay for one or more of their counselors to get certified in reverse mortgages. There are trainings offered around the country, often with scholarships for lodging and registrations. Agencies may not have funds to pay for travel, however. A broker or consortium of brokers could donate the cost of airfare to send counselors for training and easily expand the number of qualified counselors across the state.nnBrian WhitenChicago

  • HECM Vet,rnrnStating u201cu2026just as a student gets more from classroom instruction than some of the remote alternativesu201d reflected u201can interesting biasu201d about the classroom experience. To equate that concept to face-to-face counseling indicated u201ca general misunderstandingu201d of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.rn

  • Cynic,nnJust exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?nnYou failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.nnYour belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

  • HECM Vet,rnrnYour comment reflects an interesting bias and a general misunderstanding of the purpose of counseling. As to education, how each person learns best — in which subjects and in what kind of environment — varies greatly. u201cOne size (the classroom) fits all bestu201d is simply not true and is generally considered to be the propaganda of the NEA.rnrnIf the chief purpose of counseling is merely to teach and to measure the level of learning achieved, then face-to-face testing should be instituted immediately. But counseling is generally expected to be much more than that.rnrnSince it seems reasonable to assume that most legislators do not have a solid understanding of the HECM process, it is important to determine their expectations from counseling and then sit back to muse over the situation. Counseling is not teaching as much as it is tutoring and true counseling. While I expect counselors do their best, the question is do they have the training and skill set needed not just to assess the understanding of the senior as to the HECM but also meet the other expectations HUD, state legislators, and others including Dr. Barbara Stucki have in mind.rnrnSeniors are and should be treated as a protected class. Yes, Warren Buffett, Hillary Clinton, Karl Rove, Fred Thompson, Dan Wallace (and his son, Chris), and many Americans who are over 62 and currently have a mastery of their mental faculties the majority of Americans have rarely experienced. But it is also true that as seniors age, their reliance on quick determinations increases and their skill in performing careful initial detailed analysis diminishes. I have never read or heard about a single credible study which promotes the idea that Parkinsonu2019s disease, muscular dystrophy, brain injury from stroke, and Alzheimeru2019s disease are limited to the poor and do not impact the rich or brillant. It is also true that after middle age (and some much earlier) the older we grow, the more dependent we become.rnrnIn a face-to-face meeting, many things become somewhat more detectable and certainly more observable than over the phone, such as signs of duress and undue influence, a younger person pretending to be the senior, the level of response, and indications of mental haze caused by prescriptions and other substances. Also it becomes easier to direct seniors to the community and government services and agencies that might be most helpful to them.rnrnSo until we understand the expectations legislators have from counseling, it is difficult to comment on their intent and why their legislation might be better served through telephone or even online counseling. I am afraid legislators and society in general may expect counseling to provide much more than we as originators believe it should or was originally designed to do. rn

  • Mr. Fenton,rnrnYour practical insights are extremely helpful. It is easy for anyone to overlay their local experiences into a different region of the country and reach the wrong conclusion. It is important that HECMs are equally accessible for all qualifying seniors in the country.rnrnCan you describe the concerns of the legislators? Would having a face-to-face required originator meeting if the senior does not choose face-to-face counseling help? Or are the regulators looking for counseling to be held in what they perceive as a more conducive environment?rnrnOnce this procedure is implemented, no doubt other states which provide strong senior consumer protections will follow. Are there other states such as California where you would have similar concerns?rn

  • I think many good points were made here, however I have to disagree with Brian White from Chicago in doubting that a shortage of face to face counseling will discourage seniors in moving on with the reverse mortgage application process.

    It is worth remembering that the counseling agencies in MA usually have only one eligible counselor per office and that housing counselors are generally not dedicated to HECM counseling full time, often struggling to help record numbers homeowners avoid foreclosure.

    Our experience may be instructive. A couple of years ago MMI voluntarily restricted access to HECM counseling by phone for MA residents, for several weeks while we worked out exactly what the Exec. Office of Elder Affairs required of us. The result was counseling wait times stretched out to more than 6 weeks. Since then, the counseling capacity in MA has actually decreased (with the introduction of the HECM Counseling Roster), so I predict that a universal face to face requirement will create significant access problems.

    Hopefully a reasonable compromise can be developed protecting access to face counseling for those who want it, but allowing telephone counseling for those who choose this option.

  • There is no doubt seniors would get more out of face-to-face counseling than from a telephone session, just as a student gets more from classroom instruction than some of the remote alternatives.

    When I originated my first HECM loan some 20 years ago, anything but in-person counseling was unheard of, and a face-to-face application interview was mandatory (usually, these happened on the same day). And the financed origination fee was limited to $1,800.

    In the early years of reverse mortgages, there was a marked contrast between the HECM and some of the proprietary products of the time that involved shared-appreciation or shared-equity features, among others. Many, if not most, consumers had never heard of a reverse mortgage, and prospective borrowers needed to be educated about the very existence of the program.

    Today, it is nearly impossible to find a senior homeowner who has not heard of a reverse mortgage. They’ve received our direct-mail solicitations and seen the familiar TV pitchmen. Articles, both friendly and otherwise, have appeared in local papers as well as national publications. Most seniors and their families have access to the Internet and can obtain a wealth of information that was unavailable in 1990.

    If seniors feels comfortable obtaining counseling and applying for their reverse mortgages over the telephone, by mail or even on-line, they should be allowed to do so, provided reasonable precautions are taken to assure they possess the capacity to understand and enter into the transaction.

  • The author did a great job in trying to provide a balanced view. The internal bank procedure Joseph Festa presented was interesting even if he showed his ignorance about reverse mortgages currently when he seemed to voluntarily opine.rnrnThe author who appears to be a good writer, messed up when she described reverse mortgages. I really wish NRMLA had a media packet and a team of people to contact reporters (especially newpaper, radio, and TV) and increase their understanding of HECMs and other reverse mortgages. Maybe, just maybe, these reporters would come to NRMLA for balanced information when they wanted to do another piece on our products.

  • There should be a provision that allows seniors who don’t have access to face-to-face counseling to have over-the-phone counseling if certain criteria are met. A lot of our homeowners are handicapped or are not able to drive or find transportation easily. There should be exceptions. Brian notes that there are fourteen agencies in Massachusetts offering counseling, but that does not mean that they are spread out evenly, so that ALL seniors are living with reasonable distance to one.rnrnI also find this bill to be a bit discriminatory. It should apply to all seniors or none. Just because predators profile, doesn’t mean the government should. Seniors are still adults and still Americans. My father is a low-income senior and, although he does not need a RM, would be very angry to know that he is subject to unneccessary inconveniences just because he fits said profile.

  • According to HUD’s website, there are 14 agencies providing reverse mortgage counseling for Massachusetts. Neighboring states, such as Rhode Island, New York, Vermont, and Connecticut also have agencies that may be in reach of Massachusetts seniors. It seems doubtful that a lack of counseling will dampen the demand for reverse mortgages.nnOn the other hand, seniors may be turned off by costs associated with reverse mortgages or the net return on a reverse mortgage compared to other financial options. In our practice doing reverse mortgages, we found seniors with limited equity and limited incomes were unlikely to get a reverse mortgage because the amount of money left over after fees and required set-asides was simply not enough to meet their needs, especially when declining home values are taken into account. nnWe find that face-to-face counseling was very helpful for working with seniors to identify alternatives for meeting their housing or financial needs, especially if they decide against a reverse mortgage. It is important to note that HUD requires that counselors discuss alternative options for seniors. Counselors located in national call-centers are far less likely to be familiar with the range of local services available to seniors in a given community or to have relationships to make direct referrals. This makes them less able to support the counseling needs of the senior, which for HUD agencies, goes beyond simply counseling on the mortgage.nnA final thought is if reverse mortgage lenders feel lack of counseling is an issue, make a contribution to a local agency to pay for one or more of their counselors to get certified in reverse mortgages. There are trainings offered around the country, often with scholarships for lodging and registrations. Agencies may not have funds to pay for travel, however. A broker or consortium of brokers could donate the cost of airfare to send counselors for training and easily expand the number of qualified counselors across the state.nnBrian WhitenChicago

  • According to HUD's website, there are 14 agencies providing reverse mortgage counseling for Massachusetts. Neighboring states, such as Rhode Island, New York, Vermont, and Connecticut also have agencies that may be in reach of Massachusetts seniors. It seems doubtful that a lack of counseling will dampen the demand for reverse mortgages.

    On the other hand, seniors may be turned off by costs associated with reverse mortgages or the net return on a reverse mortgage compared to other financial options. In our practice doing reverse mortgages, we found seniors with limited equity and limited incomes were unlikely to get a reverse mortgage because the amount of money left over after fees and required set-asides was simply not enough to meet their needs, especially when declining home values are taken into account.

    We find that face-to-face counseling was very helpful for working with seniors to identify alternatives for meeting their housing or financial needs, especially if they decide against a reverse mortgage. It is important to note that HUD requires that counselors discuss alternative options for seniors. Counselors located in national call-centers are far less likely to be familiar with the range of local services available to seniors in a given community or to have relationships to make direct referrals. This makes them less able to support the counseling needs of the senior, which for HUD agencies, goes beyond simply counseling on the mortgage.

    A final thought is if reverse mortgage lenders feel lack of counseling is an issue, make a contribution to a local agency to pay for one or more of their counselors to get certified in reverse mortgages. There are trainings offered around the country, often with scholarships for lodging and registrations. Agencies may not have funds to pay for travel, however. A broker or consortium of brokers could donate the cost of airfare to send counselors for training and easily expand the number of qualified counselors across the state.

    Brian White
    Chicago

  • There should be a provision that allows seniors who don't have access to face-to-face counseling to have over-the-phone counseling if certain criteria are met. A lot of our homeowners are handicapped or are not able to drive or find transportation easily. There should be exceptions. Brian notes that there are fourteen agencies in Massachusetts offering counseling, but that does not mean that they are spread out evenly, so that ALL seniors are living with reasonable distance to one.

    I also find this bill to be a bit discriminatory. It should apply to all seniors or none. Just because predators profile, doesn't mean the government should. Seniors are still adults and still Americans. My father is a low-income senior and, although he does not need a RM, would be very angry to know that he is subject to unneccessary inconveniences just because he fits said profile.

  • The author did a great job in trying to provide a balanced view. The internal bank procedure Joseph Festa presented was interesting even if he showed his ignorance about reverse mortgages currently when he seemed to voluntarily opine.

    The author who appears to be a good writer, messed up when she described reverse mortgages. I really wish NRMLA had a media packet and a team of people to contact reporters (especially newpaper, radio, and TV) and increase their understanding of HECMs and other reverse mortgages. Maybe, just maybe, these reporters would come to NRMLA for balanced information when they wanted to do another piece on our products.

  • There is no doubt seniors would get more out of face-to-face counseling than from a telephone session, just as a student gets more from classroom instruction than some of the remote alternatives.

    When I originated my first HECM loan some 20 years ago, anything but in-person counseling was unheard of, and a face-to-face application interview was mandatory (usually, these happened on the same day). And the financed origination fee was limited to $1,800.

    In the early years of reverse mortgages, there was a marked contrast between the HECM and some of the proprietary products of the time that involved shared-appreciation or shared equity features, among others. Many, if not most, consumers had never heard of a revere mortgage, and prospective borrowers needed to be educated about the very existence of the program.

    Today, it is nearly impossible to find a senior homeowner who has not heard of a reverse mortgage. They received our direct-mail solicitations and seen the familiar TV pitchmen. Articles, both friendly and otherwise, have appeared in local papers as well as national publications. Most seniors and their families have access to the Internet and can obtain a wealth of information that was unavailable in 1990.

    If seniors feels comfortable obtaining counseling and applying for their reverse mortgages over the telephone, by mail or even on-line, they should be allowed to do so, provided reasonable precautions are taken to assure they possess the capacity to understand and enter into the transaction.

    • HECM Vet,

      Your comment reflects an interesting bias and a general misunderstanding of the purpose of counseling. As to education, how each person learns best — in which subjects and in what kind of environment — varies greatly. “One size (the classroom) fits all best” is simply not true and is generally considered to be the propaganda of the NEA.

      If the chief purpose of counseling is merely to teach and to measure the level of learning achieved, then face-to-face testing should be instituted immediately. But counseling is generally expected to be much more than that.

      Since it seems reasonable to assume that most legislators do not have a solid understanding of the HECM process, it is important to determine their expectations from counseling and then sit back to muse over the situation. Counseling is not teaching as much as it is tutoring and true counseling. While I expect counselors do their best, the question is do they have the training and skill set needed not just to assess the understanding of the senior as to the HECM but also meet the other expectations HUD, state legislators, and others including Dr. Barbara Stucki have in mind.

      Seniors are and should be treated as a protected class. Yes, Warren Buffett, Hillary Clinton, Karl Rove, Fred Thompson, Dan Wallace (and his son, Chris), and many Americans who are over 62 and currently have a mastery of their mental faculties the majority of Americans have rarely experienced. But it is also true that as seniors age, their reliance on quick determinations increases and their skill in performing careful initial detailed analysis diminishes. I have never read or heard about a single credible study which promotes the idea that Parkinson’s disease, muscular dystrophy, brain injury from stroke, and Alzheimer’s disease are limited to the poor and do not impact the rich or brillant. It is also true that after middle age (and some much earlier) the older we grow, the more dependent we become.

      In a face-to-face meeting, many things become somewhat more detectable and certainly more observable than over the phone, such as signs of duress and undue influence, a younger person pretending to be the senior, the level of response, and indications of mental haze caused by prescriptions and other substances. Also it becomes easier to direct seniors to the community and government services and agencies that might be most helpful to them.

      So until we understand the expectations legislators have from counseling, it is difficult to comment on their intent and why their legislation might be better served through telephone or even online counseling. I am afraid legislators and society in general may expect counseling to provide much more than we as originators believe it should or was originally designed to do.

      • Cynic,

        Just exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?

        You failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.

        Your belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

      • HECM Vet,

        Stating “…just as a student gets more from classroom instruction than some of the remote alternatives” reflected “an interesting bias” about the classroom experience. To equate that concept to face-to-face counseling indicated “a general misunderstanding” of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.

  • I think many good points were made here, however I have to disagree with Brian White from Chicago in doubting that a shortage of face to face counseling will make it discourage seniors in moving on with the reverse mortgage application process.

    It is worth remembering that the counseling agencies in MA usually have only one eligible counselor per office and that housing counselors are generally not dedicated to HECM counseling full time, often struggling to help record numbers homeowners avoid foreclosure.

    Our experience may be instructive. A couple of years ago MMI voluntarily restricted access to HECM counseling by phone for MA residents, for several weeks while we worked out exactly what the Exec. Office of Elder Affairs required of us. The result was counseling wait times stretched out to more than 6 weeks. Since then, the counseling capacity in MA has actually decreased (with the introduction of the HECM Counseling Roster), so I predict that a universal face to face requirement will create significant access problems.

    Hopefully a reasonable compromise can be developed protecting access to face counseling for those who want it, but allowing telephone counseling for those who choose this option.

    • Mr. Fenton,

      Your practical insights are extremely helpful. It is easy for anyone to overlay their local experiences into a different region of the country and reach the wrong conclusion. It is important that HECMs are equally accessible for all qualifying seniors in the country.

      Can you describe the concerns of the legislators? Would having a face-to-face required originator meeting if the senior does not choose face-to-face counseling help? Or are the regulators looking for counseling to be held in what they perceive as a more conducive environment?

      Once this procedure is implemented, no doubt other states which provide strong senior consumer protections will follow. Are there other states such as California where you would have similar concerns?

  • Cynic,nnJust exactly what is the nature of the “interesting bias” that was reflected in my comment? How do I “generally misunderstand” the purpose of counseling?nnYou failed to support your assertion, delving instead into a lengthy, disjointed screed that is about issues that have nothing to do with my comment.nnYour belittling of those with whom you disagree (or misunderstand) is not appreciated; if you wish to pontificate about your alleged superior knowledge of all matters, please do so in the form of a comment on an article, rather than as a reply to another comment.

  • HECM Vet,rnrnStating u201cu2026just as a student gets more from classroom instruction than some of the remote alternativesu201d reflected u201can interesting biasu201d about the classroom experience. To equate that concept to face-to-face counseling indicated u201ca general misunderstandingu201d of what counseling has turned into and even more importantly what many expect from it and into what some want it transformed. As to whether the intent of my reply was to belittle is a matter of conjecture and opinion just like my conclusions about what your original comment reflected. My reply was not for the purpose you indicate but rather to differentiate my view of counseling from yours.rn

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