Mortgage Banker’s Association Chairman Michael D. Berman, CMB, testified today during a Congressional hearing and asked that housing counseling funds be restored, including those for HECM counseling. He was speaking before the U.S. House of Representatives Financial Services Subcommittee on Insurance, Housing and Community Opportunity in a hearing titled “Legislative Proposals to Determine the Future Role of FHA, RHS and GNMA in the Single-and Multi-Family Mortgage Market.”
When the Fiscal Year 2011 budget was passed in April, $88 million of funding for housing counseling was cut despite its mandatory status for those wishing to obtain a reverse mortgage. In his testimony, Berman said the MBA “urges Congress to restore these funds,” as their elimination “directly impacts… counseling for reverse mortgages for seniors.”
Berman, who called the hearing timely and said the FHA was at an “important crossroads,” highlighted the effect this funding cut has on seniors.
“Policymakers determined that borrowers of reverse mortgages needed mandatory counseling because of the complexity of the product and because the product serves a vulnerable population, yet Congress have removed the funding that ensures this intent is carried out,” he said during his testimony. “Regrettably, the result will be that seniors who need the proceeds of a reverse mortgage the most will be the ones least likely to afford the counseling fee. Eliminating funding for counseling is a set-back for seniors who are trying to maintain a decent standard of living in these tough economic times.”
Current housing counseling funds will likely be exhausted by October, when the 2012 budget goes into effect.
Written by Alyssa Gerace