Mass. Public Hearing to Assess State Reverse Mortgage Protocol

A public hearing in Massachusetts will be held to clarify the opt-in and counseling certification requirements for in-person reverse mortgage counseling, the state Division of Banks has announced. The hearing, scheduled for September 14, will also establish the eligibility, procedures, disclosures and counseling requirements for the reverse mortgage program.

There may be changes made to the requirements based on public hearing testimony or public comments, which the Division of Banks is collecting currently. The comment period will be open through September 21.

Massachusetts is one of only a few states to require face-to-face reverse mortgage counseling. A new law passed in the state last August required the in-person counseling for those borrowers who do not meet certain income and asset thresholds. The legislation is now scheduled to go into effect on August 1, 2012. Similar legislation in Georgia would also require counseling in person, and North Carolina currently requires it.

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Written by Elizabeth Ecker

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  • I am a HECM counselor here in Massachusetts. While I believe the change in the law will be beneficial to some, overall it is unnecessary and would, in fact, create a hardship to both borrowers and counseling agencies.
     
    Let me present some reasons for this:
     
    Availability of counselors:
    As of today, according to HUD’s HECM Counseling Agency List, there are only 15 agencies in the commonwealth of Massachusetts with a total of 30 HECM counselors between them. This number is not likely to increase significantly by August 1st, 2012. The agency I work for has the most counselors in the state; double that of the next largest agency, but still small considering the potential growth and popularity of the traditional and saver HECM products.
    Statistically, approximately 60% of our HECM clients fall below the 50% Area Median Income threshold which would require they receive face-to-face counseling. Many counseling agencies are already backed up when trying to assist new clients. Forcing in house counseling will cause even more strain and wait times for homeowners in need.

    Borrower hardship:
    With only 15 agencies in the state, many clients would be required to travel great distances in order to receive counseling. These elder Americans, who are below 50% of their area median income, may already be experiencing a financial hardship. Mobility issues and/or disabilities would make travel next to impossible for these people. Forcing them to travel any distance to receive counseling is unnecessary and unfair.
     
    Financial strain to the counseling agency:
    Since counselors are required by the EOEA (Executive Office of Elder Affairs) to travel as necessary to provide counseling to clients, it’s important to understand the actual cost of the counseling session; Espically with HUD funds no longer available.
    You must take into account the rising costs of gasoline when traveling up to an hour to and from the client’s residence. If you add the cost of travel and the counselor’s minimal compensation, the normal $125 counseling session fee will be insufficient. This will result in agencies having no choice but to increase counseling fees to more appropriate levels.

  • I am a HECM counselor here in Massachusetts. While I believe the change in the law will be beneficial to some, overall it is unnecessary and would, in fact, create a hardship to both borrowers and counseling agencies.
     
    Let me present some reasons for this:
     
    Availability of counselors:
    As of today, according to HUD’s HECM Counseling Agency List, there are only 15 agencies in the commonwealth of Massachusetts with a total of 30 HECM counselors between them. This number is not likely to increase significantly by August 1st, 2012. The agency I work for has the most counselors in the state; double that of the next largest agency, but still small considering the potential growth and popularity of the traditional and saver HECM products.
    Statistically, approximately 60% of our HECM clients fall below the 50% Area Median Income threshold which would require they receive face-to-face counseling. Many counseling agencies are already backed up when trying to assist new clients. Forcing in house counseling will cause even more strain and wait times for homeowners in need.

    Borrower hardship:
    With only 15 agencies in the state, many clients would be required to travel great distances in order to receive counseling. These elder Americans, who are below 50% of their area median income, may already be experiencing a financial hardship. Mobility issues and/or disabilities would make travel next to impossible for these people. Forcing them to travel any distance to receive counseling is unnecessary and unfair.
     
    Financial strain to the counseling agency:
    Since counselors are required by the EOEA (Executive Office of Elder Affairs) to travel as necessary to provide counseling to clients, it’s important to understand the actual cost of the counseling session; Espically with HUD funds no longer available.
    You must take into account the rising costs of gasoline when traveling up to an hour to and from the client’s residence. If you add the cost of travel and the counselor’s minimal compensation, the normal $125 counseling session fee will be insufficient. This will result in agencies having no choice but to increase counseling fees to more appropriate levels.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

  • Justin Lally makes some very good arguments here. I hope you will attend the September 14 hearing on the proposed regulations, Justin, to make these comments at a place where they might “count,” in addition to articulating them on RMD, where most readers concur with you.

    • Peter,

      If there were no RMD, no one would know what Justin was thinking.   But like you always say the regulators and the legislative staffs read RMD.

      Like you I hope Justin will speak up at the hearings. 

    • Peter,

      If there were no RMD, no one would know what Justin was thinking.   But like you always say the regulators and the legislative staffs read RMD.

      Like you I hope Justin will speak up at the hearings. 

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