Longer counseling sessions for reverse mortgages

As the federal government continues to insist on increasingly more diligent counseling protocols for reverse mortgage customers, the counselors charged with compliance are concerned about the “senior fatigue” that could ensue – an inability or unwillingness by older clients to sit through such sessions, now said to approach two hours in length.

On top of already existing rules, recent HUD HECM protocols require counselors to use the National Council of Aging’s Web-based Financial Interview Tool (FIT) to create a budget for the client, based on their income, assets, debt and expenses. In addition, counselors are required to complete a BenefitsCheckUp for clients whose income falls below 200 percent of the Federal Poverty Level (FPL), or who are disabled.

Jackie Boies, director, branch counseling, in the Gulf Coast East office of Money Management International, Lake Charles, La., says the Benefits Check Up and Financial Interview tool means counseling sessions are taking longer, “but these are valuable tools for educating our clients and providing them with additional resources,” Boies says. The new additions to the process, she reports, are taking 15-20 minutes of additional counseling time.


One professional in the field says that as “counselors become more experienced with both the content of the sessions, we expect to be able to improve on the amount of time it takes.” This person also said HUD may relent on some requirements as it receives comments from the field on what their growing regulations require in terms of time to implement.

“These sessions can now go on for two hours and for many seniors that’s just too much,” the counselor says.

One mitigating factor coming down the pike is that reverse mortgage customers are actually getting younger, according to Jerry Tomlin, Atlantic Bay Mortgage Group, who notes that “the 72-year-old widow was our typical reverse mortgage customer [but] now it’s the 60-ish couple and single men – [generally more] active adults.”

Written by Neil Morse

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  • The notion that 60-ish seniors may not need the senior-centric FIT process is short-sighted.

    Younger seniors actually need the FIT process more for they may be blissfully making decisions in their 60s that could hurt them, investors, and HUD in their 70s, 80s, and 90s. The extra15-20 minutes to help them think through the long-run consequences of their decisions should be welcomed if properly framed and explained.

    Thanks to the FIT process, we are just beginning to appreciate some of the life-stage risks associated with reverse mortgage lending for seniors. There should be more to reverse mortgage counseling (and lending) than speed.

  • The counseling sessions could be shortened and more effective if the FIT format/questions were available to loan officers. Not preparing a senior and their trusted advisors for the counseling session is like sending them to be ambushed, can create distrust, alienate and ruin deals. I urge HUD and the lenders to get more information about FIT / BCU to front lines.

  • As an experienced counselor and trainer of counselors, I can tell you that not only do sessions “approach” 2 hours, but they can easily surpass 2 hours if we really do everything that HUD is asking of us.

    I used to do 1.5-2 hour sessions. Now my sessions run 2.5-3 hours and have been known to go to 3.5 for some clients. Are they too long? Yes, I think so. I think 2 hours was OK, but 3 hours is just too much for many older or frail seniors.

    The problem is, counselors are forced to choose among several bad options:
    1) Skip something that HUD has told us we must do;
    2) Go through everything so fast that it’s meaningless because the senior isn’t getting it anyway. (Think about all those so-called “disclosures” that you lenders provide to seniors — how many clients actually read through everything, now that the stack is 1/2 inch thick?);
    3) Spend 3 hours with each client;
    4) Make the client come back for a second session. Note that I do my counseling in person, not by phone, so it’s a major inconvenience for the client to make them come back. I think that if I were doing phone counseling, I might routinely break it up into two segments (one for the FIT/BCU and alternatives piece, and the other for the reverse mortgage info itself). Keeping someone on the phone for even 2 hours is cruel and unusual.

    Regarding younger borrowers, not to over-generalize or stereotype, but I find that they are often really more interested in some of the details like the right to prepay, the impact of interest rate changes in the adjustable rate product, the potential loss of all equity in the home in a relatively short time if they take a lump sum draw, etc. Older seniors, who really do plan to stay in their homes until they die, often are less concerned about those long-term consequences. As a result, sometimes the sessions for the younger folks take even longer.

    I also want to completely support what Atare said in his comment. Those younger seniors really NEED the counseling process to make sure they are thinking at least a little about their future. Even now, in the Information/Referral part of my job, I see too many seniors in their late 70’s and 80’s who have outlived their savings, and are now looking for public assistance for home care, home repair, etc. I am very fearful of what we will be seeing 10 or 15 years from now when all those folks in their 60’s now taking out fixed-rate, lump-sum HECMs have used up all the money and then have long-term care needs. Where will they turn then?

    Regarding having lenders prep clients for the FIT, I don’t really think that is necessary. If the counselor is doing their job, they will be educating the client at the time the appointment is set up, about the types of information that will be needed during the session. Some counselors send out a pre-counseling questionnaire to help the client gather info, although I find that I get less resistance to those kinds of personal financial questions if I wait until I’ve established some kind of relationship with the client and have had a chance to explain why I need to know.

      • Atare,

        Based on your comment, I strongly recommend you review your most recent writing on FIT and BCU and analyze and incorporate what this counselor writes. I know Dr. Stucki is persuasive but one counseling session is not the right place for these items to be included. I disagreed with her and you before the change came and have never waivered.

        Counselors should be preparing seniors about the loan and helping them learn what it is and how it works. Financial types should be working with the seniors on the FIT and BCU issues; however, the lender, particularly underwriting, needs to be involved in the FIT and BCU process, but not in the portion dealing with explaining the HECM and borrower obligations.

        You argue in your latest writing that counseling is NOT too long. I strongly agree with the counselor that it is. It is cruel as told to me by several participants. By the time it is done, many seniors have forgotten much of what the counselor discussed about the HECM. Some are terrified.

        I remind you what Ronni Bennett a huge proponent of HECMs wrote on both her Internet site and on a comment on RMD about having to answer FIT and BCU questions. She took counseling before FIT and BCU were required and would have walked away from the program if she had been subjected to them. Many of her readers agreed.

        The DESPERATE are not like Ronni and have no choice. Why do you support abusing them in this way?

        Making FIT and BCU a part of the counseling session is counterproductive if the primary purpose of counseling is to inform the senior about the loan and their responsibilities. Helping seniors understand their financial situation and their options is a wonderful idea but it should be handled separately.

  • I think the in-depth explanation that RMcounselor gave was great, my hat is off to him or her.

    Once again I can see the federal government having no trust and faith in the loan originator to counsel their client properly. My concern is if the senior is going to get any more helpful information and knowledge out of a 2 hour or more session. Will the senior be more confused because of all the information.

    Even more serious, will the senior be apt be frightened away by the over kill of counseling. Good loan originators build up a trust with their seniors and many loan originators know a lot better than a counselor on the phone what the senior needs. The senior feels they are getting what they need and the loan originator did a good job. Will this undo the good that was done and become a bad thing for the senior?

    The federal government has the tendency of over regulating, creating more expense than is needed and complicates everything they touch. Will this be the case once again where our seniors are involved?

    John A. Smaldone

    • John,

      I respect your position but do not agree this should be handled by loan officers. I strongly believe it needs to be separated from counseling and that underwriting be included either in the discussion or at a minimum receive the results.

      I still believe that if options are to be presented in an unbiased way it must be done by a party independent from the lender.

      • Critic,

        I think you misunderstood my comment. I did not mean the counseling should be done by loan originators, on the contrary, I agree with you. We MUST have independent counseling, if nothing else as a check and balance to make sure the loan originator is giving the senior proper advise. What I meant in a nut shell was that if the loan originator did their job properly, the counseling should be a smooth session for both the senior and the counselor. A 2 hour plus should not be needed.

        What we don’t need is the counseling sessions to be is an over kill. I feel very strongly this is what we will wind up with. Tell me, what is the counselor going to say in 2 plus hours? This is becoming to much and will hurt our industry and do more damage for the senior. I hope I cleared up any misconceptions you may have had. Have a good day.


        John Smaldone

      • John,

        I apologize for taking your comment in a wrong way. Thank you for letting me know.

        I believe that there is a need for financial assessment and help for some seniors in knowing their situation. I do not believe that assessment should be done by originators but I am not satisfied that the present core of HECM counselors is adequate either.

        I find it appalling that older seniors are expected to sit through a three hour counseling session. I will be 62 soon and I can hardly sit through a two hour meeting with no breaks. It is cruel for older seniors to be subjected to this kind of treatment.

        Counseling cannot be all things to all people. It needs to be trimmed down and at the same time broken into separate sessions if all of counseling is really that valuable. Counseling fees should be raised in that case and Congress should fund those fees. Oh, well, enough from me.

      • Critic,

        No need to appologies. I appreciate you understood what my comment meant. By the way, what you just said is 100% on. You and I are on the same page. Thank you for the reply. You have a good weekend.

        John Smaldone

  • I don’t mean to offend anyone, but I have to wonder whether you have really looked at the FIT and BCU tools, and thought about the purpose they serve. They are not about financial planning. They are not about underwriting. What they are about is enhancing counseling, and helping the counselor to do a better job.

    FIT really serves to help the counselor get to know aspects of the client’s financial situation that the client might not mention spontaneously, and the counselor might not think to ask. For instance, it asks whether the married client has a pension that will continue for the benefit of the the surviving spouse. This is not for financial planning purposes, it is so that the counselor, and the client, can understand how a surviving spouse’s financial situation may change if one spouse dies. This may make a huge difference in how the couple plans to use the reverse mortgage, and is immediately and directly relevant to the counseling session. Personally, this is a question that, prior to FIT, I personally did not think to ask all the time, and I probably did my clients a disservice by not asking it. Now that I’m asking it routinely, it’s really interesting to me how many clients who have a pension don’t even know if it will stop when they die, or if their spouse will get some benefit. That’s a vital piece of information that FIT prompts them to go find out after the session.

    FIT also asks whether the client has ever been late making a tax or homeowner’s insurance payment. Great question! This is a cue to the counselor to place even more stress on the client’s responsibility for those payments and the potential consequences of default.

    As for BCU, the main point of this is to identify social service programs such as Medicaid, food stamps, weatherization, and other financial assistance that low-income clients would be eligible for. Why would it make sense for an underwriter to do this? Again, this is directly relevant to counseling, since clients who are eligible for public assistance need to be very careful in how they use a reverse mortgage, so as not to lose eligibility.

    As for Ronni’s concerns, it’s hard to take that seriously since she did not actually complete the FIT and BCU. Most likely she would not have even been required to do the BCU, as it is optional for higher income clients.

    In the hands of a good counselor, FIT and BCU are both valuable tools, and even in the hands of a mediocre counselor, they raise questions that are important for the client to consider. My only beef is that the counseling sessions are getting longer and longer. While I find that my clients usually enjoy the session, tell me they learned a great deal, and say it was extremely worthwhile, they do get stiff and uncomfortable sitting that long. I have started taking breaks in the middle of the session to allow some stretching, bathroom visits, etc., and find this helps — on the other hand, it makes the session even longer!

    • rmcounselor,

      While The_Critic has communicated with Ms. Bennett publicly, I am not sure about private communications. By your comments, it is clear you have not.

      I have exchanged several emails with Ms. Bennett and your seeming assumptions do not agree with her emails other than she did not participate in either FIT or BCU. Per her public comments on her personal situation, if she had participated in counseling after 9/11/2010 she would have been required to participate in both FIT and BCU; I do not know how you concluded otherwise.

    • rmcounselor,

      While The_Critic has communicated with Ms. Bennett publicly, I am not sure about private communications. By your comments, it is clear you have not.

      I have exchanged several emails with Ms. Bennett and your seeming assumptions do not agree with her emails other than she did not participate in either FIT or BCU. Per her public comments on her personal situation, if she had participated in counseling after 9/11/2010 she would have been required to participate in both FIT and BCU; I do not know how you concluded otherwise.

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