Senate Says Yes to Restoring HECM Counseling Funds

The Senate Appropriations Committee yesterday restored $125 million of funding to the US Department of Housing and Urban Development, in a move that will help HUD-approved counseling agencies to continue providing their services to reverse mortgage-seeking seniors at little to no cost.

On Wednesday, the committee approved the Transportation and Housing and Urban Development (THUD) appropriations bill for fiscal year 2012, including the housing counseling funding, $60 million of which will go toward HUD’s housing counseling services for Home Equity Conversion Mortgage (HECM) counseling and pre-purchase counseling.

The other $65 million is slated for the National Foreclosure Mitigation Counseling program.

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Earlier in the year, Congress slashed $88 million of HUD housing counseling funding, prompting the industry to raise the hue and cry for its restoration, especially in light of new additions to HECM counseling protocols.

“This brings us one more vital step closer to restoration of the critically important counseling program but leaves us with yet more work to be done to make certain HECM counseling is funded at adequate levels to benefit our seniors,” said H. West Richards, executive director of the Coalition for Independent Seniors, in a statement.

The bill will now fall under negotiations between the House and Senate.

Written by Alyssa Gerace

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  • While there is a chance for full HECM pre-case number assignment counseling, it is worse than an even chance that will occur.  At about 120,000 sessions this next fiscal year, the amount needed is about $16 million unless the expected increase in counseling costs are more.  Obviously, if the number goes up, so will the need.

  • Not holding my breath.  Re: the amount of money, it is worthwhile to note that HECM counseling has NEVER been fully funded.  At no time in the last 10 years at least has HUD provided enough money to completely pay for all the HECM sessions being done.  Local housing counseling agencies used to provide this service as part of their overall counseling services, sometimes with non-HUD funding sources, sometimes not funded at all except by their general fundraising efforts. The same cannot be said for the “counseling mills” — the phone banks whose counselors do 8 HECM counseling sessions a day.  You can bet they won’t be working for nothing, and good luck to the client who can’t afford to pay an upfront fee. 

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