New HECM Counseling Guidelines Require Non-Borrowing Spouse is Present

Changes to HECM counseling protocol were announced Friday by the Department of Housing and Urban Development, which now requires that all owners shown on the property deed as well as any non-borrowing spouse must personally receive counseling.

Additionally, the HECM Saver has been added as one of the options counselors will present to clients and when a Power of Attorney is present, the name of the Attorney-In-Fact will be entered at the top of the certificate along with the name of the homeowner.

Other changes include the replacement of Agency Tax ID Number with Agency Housing Counseling System ID number.


The new guidance was presented in Mortgagee Letter 2011-31, released on August 26. The new rules are effective 30 days from the ML date.

A lawsuit filed by AARP against HUD earlier this year presented several reverse mortgage borrowers who faced foreclosure, including one plaintiff who had lost his home after his name was removed from title during the process of the reverse mortgage. Prior to this new guidance, non-borrowing spouses were not required to receive counseling.

View Mortgagee Letter 2011-30.

Written by Elizabeth Ecker

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  • One small point — the new requirement regarding counseling participation specifies that all OWNERS shown on the deed must be present for counseling, as well as any non-owner spouse.  This is different from saying that all HECM borrowers shown on the deed must attend, as appears in your article.  The new requirement means that any quit-claiming owner, who will not be a HECM borrower, is REQUIRED, not just recommended, by FHA to receive counseling and sign a counseling certificate.

  • Will there be no exceptions?  What about two situations where the non-borrowing spouse isn’t and hasn’t ever been on title to the home;

    1) NBS is incapacitated (living outside the home) and no one has POA or Guardianship.  How is this person going to be counseled?

    2) Married couple is separated, not legally, and the NBS is no where to be found and/or is unwilling to cooperate.  

    I’ve closed loans in both of these scenarios and will not be able to moving forward if there is no “common sense” exception.  Keep in mind I am not talking about community property states.

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