HUD Lifts HECM Counseling Fee Cap

New HECM counseling fee guidelines announced by Department of Housing and Urban Development (HUD) lift the previous $125 cap on counseling services and allow counseling agencies to determine the appropriate fees charged for their services based on several criteria.

In a letter to mortgagees and counseling agencies, HUD explains that counseling agencies may now charge a fee for HECM counseling services as long as the cost

  • is reasonable,
  • is commensurate with services provided,
  • does not create a financial hardship for the client, and
  • meets the other requirements of the regulation.

If a client receiving HECM counseling services has an income level that falls below 200 percent of the Federal Poverty level at the time of the HECM counseling session and the counseling agency may defer collection of payment until closing. In those situations, the counseling agency and the borrower must document the amount of the counseling fee and show proof of the client’s income.


The time spent on HECM counseling sessions increased last year after HUD announced a new HECM counseling protocol, including use of the Financial Interview Tool (FIT) and the Benefits Checkup.

See the entire mortgagee letter here.

Written by Elizabeth Ecker

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  • How can one prove with any degree of reliability that his/her/their income is not above a specified total? How does one go about proving a negative? How will this be consistently applied? Will there be a statement to be signed under penalties of perjury? Has no one in the counseling decision making process ever heard of the term “materiality?”

    This is another good idea gone awry. To provide this information and document it with any degree of certainty will cost more than it is worth. The current counseling protocol and addendums show how little FHA is being influenced by anyone with any real financial credentials. While this idea sounds great, its outcome looks like the work product of financial neophytes.

    Some maverick needs to stand up and shout: “Was counseling worth $125 to begin with?” For some it is worth far more but to most…. So how much per hour will counselors be permitted to charge? Will they be able to charge what the counseling agency deems it COULD be worth?

    It is time to declare that counseling is now in danger of spinning out of control. With counseling executives making statements that apply to Standards when they are asked about Savers, declaring in the press that 20% of HECMs are not in compliance per industry “secret” documents, and most recently one discussing default information without providing meaningful statistical data upon which to evaluate the information she provided and no caveat that it was preliminary in nature, it seems counseling is going down a road that is feeding unnecessary opposition to HECMs. How is any of this being reigned in and if it supposedly is, where is the evidence? Maybe that is the negative which should be proved.

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