CredAbility Offers Around the Clock Counseling for HECM T&I Defaults

NewImage.jpgCredAbility is offering free HECM counseling for borrowers in default from failure to pay their taxes and insurance said the agency on Thursday.

Between late January and early April, lenders will be sending this group of borrowers a letter explaining that they are in default, advising them to call a nonprofit reverse mortgage counseling agency.

CredAbility is one of only five national nonprofit housing counseling organizations – including Neighborworks, NFCC, Money Management International, and National Council of Aging – approved by the Department of Housing and Urban Development to provide free counseling to any homeowner struggling with these tax and default issues.  To fund the initiative, HUD is providing $3 million specifically for this type of counseling.

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“Reverse mortgage counselors at nonprofit housing counseling agencies have special training in these unique products, and can help homeowners understand all of their options when faced with the possibility of foreclosure,” said Michelle Jones, senior vice president of Counseling for CredAbility. “We will review each homeowner’s financial situation in detail, explaining the options that may be available to them to help save their home.”

The agency said it provides education on the process and recommended action steps based on their individual needs.  “In addition, for consumers who need help paying utilities, buying low-cost groceries, or meeting other essential needs, CredAbility counselors can help consumers locate these resources through referrals to other human service agencies,” said Jones.

Homeowners can call CredAbility 24 hours a day, seven days a week to schedule an appointment with a housing counselor.

Update:  The article has been updated to reflect that other counseling agencies are also providing free HECM T&I Default Counseling.

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  • Where is the counseling protocol for this counseling and how is the $3 million being awarded? This counseling is not mandatory and as an Agency of the federal government, HUD has a vested interest in how this counseling is handled. This is especially true since not only does HUD own a significant percentage of HECMs through assignment but indirectly as well since Fannie Mae owns a significant portion of HECMs.

    Why is it that the federal government can pay for this specific type of HECM counseling and lenders cannot pay for any counseling services associated with the HECM program without violating HUD standards? This is a dual standard that must be corrected.

    Yes, there is still the matter of the $130,000 paid by six lenders to NCOA (either directly or indirectly through NRMLA) for counseling services described in Mortgagee Letter 2011-01 (the same counseling as described above). I have now joined the camp which argues that this was an actual violation of Mortgagee Letter 2008-28, not just an ethical one.

    Mortgagee Letter 2008-28 applies to all counseling services associated with the HECM program and since the voluntary counseling described in Mortgagee Letter 2011-01 is exclusively related to the HECM program, it is odd that HUD has not acted aggressively against these lenders for violating Mortgagee Letter 2008-28.

    While there was lots of time to get waivers for the six lenders who did this noble act with only the best intentions, and arranged over lunch between named individuals, the only party to this agreement who publicly wrote about it did not address the waiver issue. Expediency and the alleged dire need of seniors do not seem germane to the issue of violation although they are perhaps a mitigating factor as to any punitive measures contemplated by HUD. The violation is clear, why is HUD silent? And why did these six lenders make such payments to begin with? Surely NCOA knows the rules in Mortgagee Letter 2008-28 as well as NRMLA.
    .

    • The_Cynic,

      While it is not clear that any formal waivers were issued, could the parties have safely assumed that they were not in violation of Mortgagee Letter 2008-28 IF HUD was somehow directly involved?

      • reverse_mortgage_maven,

        If waivers have been obtained, why didn’t the NRMLA spokesperson simply say so and identify when that occurred? But who knows?

        All we know is that he said nothing about it. Instead he tried to excuse their actions with no doubt factual statements that had absolutely nothing to do with whether or not any violation of Mortgagee Letter 2008-28 had occurred. There is no one who has questioned the veracity of his statements that I am aware of; I certainly do not question what he said. It all sounded very plausible.

        What is troubling is that getting waivers should have been a simple matter yet nothing has been said about that. If HUD was officially involved in these decisions, again the NRMLA spokesperson never says so.

        This is not the end of the world or of the program but it is nonetheless troubling because all of the players were the alleged beacons of the highest ethical and business practices. Most of them are involved in the oversight of dealing with the inappropriate actions of lenders through the NRMLA Ethics Committee; they should be held to at least the standards of that committee. Both HUD and NRMLA need to stand up and state that either there were official waivers or this was a violation of the mortgagee letter, condemn the violation itself, declare what punishment, if any, will be dispensed, and move on. At least the violation will have been addressed and the issue settled once and for all.

        If six lenders had paid NCOA $130,000 in counseling fees for initial HECM counseling, would either NRMLA or HUD be silent? Under Mortgagee Letter 2008-28 these payments appear to be no different.

        Is the participation of a few HUD employees the same as a formal waiver? Absolutely not, unless those employees by themselves have the authority to provide waivers on this matter and agreed or agree to do it.

      • reverse_mortgage_maven,

        If waivers have been obtained, why didn’t the NRMLA spokesperson simply say so and identify when that occurred? But who knows?

        All we know is that he said nothing about it. Instead he tried to excuse their actions with no doubt factual statements that had absolutely nothing to do with whether or not any violation of Mortgagee Letter 2008-28 had occurred. There is no one who has questioned the veracity of his statements that I am aware of; I certainly do not question what he said. It all sounded very plausible.

        What is troubling is that getting waivers should have been a simple matter yet nothing has been said about that. If HUD was officially involved in these decisions, again the NRMLA spokesperson never says so.

        This is not the end of the world or of the program but it is nonetheless troubling because all of the players were the alleged beacons of the highest ethical and business practices. Most of them are involved in the oversight of dealing with the inappropriate actions of lenders through the NRMLA Ethics Committee; they should be held to at least the standards of that committee. Both HUD and NRMLA need to stand up and state that either there were official waivers or this was a violation of the mortgagee letter, condemn the violation itself, declare what punishment, if any, will be dispensed, and move on. At least the violation will have been addressed and the issue settled once and for all.

        If six lenders had paid NCOA $130,000 in counseling fees for initial HECM counseling, would either NRMLA or HUD be silent? Under Mortgagee Letter 2008-28 these payments appear to be no different.

        Is the participation of a few HUD employees the same as a formal waiver? Absolutely not, unless those employees by themselves have the authority to provide waivers on this matter and agreed or agree to do it.

    • The_Cynic,

      While it is not clear that any formal waivers were issued, could the parties have safely assumed that they were not in violation of Mortgagee Letter 2008-28 IF HUD was somehow directly involved?

  • Where is the counseling protocol for this counseling and how is the $3 million being awarded? This counseling is not mandatory and as an Agency of the federal government, HUD has a vested interest in how this counseling is handled. This is especially true since not only does HUD own a significant percentage of HECMs through assignment but indirectly as well since Fannie Mae owns a significant portion of HECMs.

    Why is it that the federal government can pay for this specific type of HECM counseling and lenders cannot pay for any counseling services associated with the HECM program without violating HUD standards? This is a dual standard that must be corrected.

    Yes, there is still the matter of the $130,000 paid by six lenders to NCOA (either directly or indirectly through NRMLA) for counseling services described in Mortgagee Letter 2011-01 (the same counseling as described above). I have now joined the camp which argues that this was an actual violation of Mortgagee Letter 2008-28, not just an ethical one.

    Mortgagee Letter 2008-28 applies to all counseling services associated with the HECM program and since the voluntary counseling described in Mortgagee Letter 2011-01 is exclusively related to the HECM program, it is odd that HUD has not acted aggressively against these lenders for violating Mortgagee Letter 2008-28.

    While there was lots of time to get waivers for the six lenders who did this noble act with only the best intentions, and arranged over lunch between named individuals, the only party to this agreement who publicly wrote about it did not address the waiver issue. Expediency and the alleged dire need of seniors do not seem germane to the issue of violation although they are perhaps a mitigating factor as to any punitive measures contemplated by HUD. The violation is clear, why is HUD silent? And why did these six lenders make such payments to begin with? Surely NCOA knows the rules in Mortgagee Letter 2008-28 as well as NRMLA.
    .

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