The Department of Housing and Urban Development issued new requirements this week for the referral list of housing counseling intermediaries that reverse mortgage lenders must provide for prospective borrowers, detailed in Mortgagee Letter 2011-26.
The referral list must include national and regional counseling intermediaries that have received grant awards from HUD. The letter notes that this list may differ each year depending on which counseling agencies and intermediaries have been awarded HUD funding.
The guidance became effective May 1, 2011, but HUD notes that for fiscal year 2011, it is not necessary to revise lists that were given to clients prior to May 1.
The letter also named three counseling intermediaries added to the referral list: ClearPoint Financial Solutions, Neighborhood Reinvestment Corporation, and Springboard.
Convenience and accessibility for prospective borrowers is a goal, as five agencies within the area or state need to be included on the list, with at least one located in a “reasonable driving distance” for the purpose of face-to-face counseling.
However, some states do not provide HECM counseling, and in those cases, lenders are required to determine and include which counseling agencies from neighboring states or areas are most conveniently located to the borrower.
The letter provides guidelines for a new field that has been added to the HECM Referral List Update, called “Referral Date,” and informs lenders that they have a 30-day window to update their lists to include eligible counseling intermediaries.
View Mortgagee Letter 2011-26 here.
Written by Alyssa Gerace
Editor’s note: This article has been updated to reflect the Mortgagee Letter’s guidelines for counseling intermediaries, rather than counseling agencies.