As Oct. 1 Approaches, HECM Borrowers See Counseling Bottlenecks

The future for HECM counseling funding remains uncertain, with October 1 as the date when funds are set to dry up. As that date approaches, lenders and some counselors have seen, and are continuing to see wait times for HECM counseling sessions are on the rise. For some, it can take up to two weeks—or longer—for a senior borrower to see an appointment.

“Lenders may be using the October 1 deadline as a way of trying to push people,” one HECM counselor told RMD. “We have seen our call volume jump. Lenders may be saying ‘call around’ [to their customers].”

Clearpoint Credit Counseling reported a wait time of 10 business days, having seen the uptick earlier in September, stretching the lag time from a typical five- business-day wait to 10 days currently.

Advertisement

For large agencies that are still using funds that were previously allocated, the wait times are getting longer.

“I think you’ll find people shopping for free sessions are waiting longer,” says Daniel Fenton, housing director for Money Management International. “This is a very common effect as agencies who have exhausted their HUD grants scale back on capacity creating backlogs for those still providing substantial service, until the next grant year (usually October 1).”

This year, however, in the absence of counseling funding, free sessions could become scarce very quickly.

“People who don’t want to pay will have to wait a very long time,” Fenton says.

From a lender perspective, the delay presents a new challenge not typically seen, and not expected by the lender or the borrower.

“Counseling is getting scheduled further out than ever before,” says Paul Fiore, head of sales for American Advisors Group. Fiore says in the past, if a borrower was willing and able to pay for counseling, they would be able to make an appointment within three to five days. Now, he says, it can be as long as two to three weeks, which delays the process for all involved.

“Borrowers want to move forward,” he says.

Written by Elizabeth Ecker

Join the Conversation (19)

see all

This is a professional community. Please use discretion when posting a comment.

  • Complaints about waiting are hardly significant.  It will come and it will go.  Counselees will simply have to pay except for those otherwise qualifying for free counseling.

  • Two of our customers (a husband and wife) took a new group counseling educational session online covering the HECM loan itself, late last week. It had over 20 participants and was hardly the model of asking and answering ten questions throughout the presentation for counseling certification purposes. Instead he and his wife dealt with the 10 questions after making ANOTHER appointment with a different counselor; it only took ten calls to reach the final counselor. Neither FIT nor BCU were covered in the webinar session for obvious reasons. The two counselees expressed their dismay with this webinar classroom approach and the overall process.

    In all they spoke with three different counselors. The first was labeled an intake session and scheduled the webinar. The second was the webinar with the third covering everything else.

    The trouble was to help verify if the participant was the counselee during the webinar, the counselor openly gathered birthdates. In this age of identity theft, this is not the right procedure. If this pilot program is going to be used in the future, counseling should be assigning a number to the counselees to be used for verification purposes. The current method is absolutely absurd.

    At the end of FIT, the husband asked for his score but the counselor said he did have it since he would be entering the data later. The counselor stated they would get the FIT score with their counseling certificate.

    During the NRMLA counseling webinar last week, Mr. Daniel Fenton stated the webinar technique is being used to save money. However, it also means the ten questions to qualify for certification will wait until the counselee reaches the next counselor. While this may be more cost effective, it is hardly the process of how the testing portion of counseling was justified as being a simple and seamless part of counseling; it now is not.

      • REVGUYJIM,

        This is no secret.  Daniel Fenton annouced the approach on the NRMLA webinar last week on program on an update of the new counseling protocol.  MMI is the counseling agency in question.

        To be clear it is not a multiple counselor approach but rather a group of counselees being instructed by a single counselor.

    • Dear Mr. Veale:

      Perhaps there is some confusion; your description of our group education session verification process is somewhat misleading. We verify that clients are on the call by calling out there first name ONLY and the state that they reside in. The client is then asked for their birthday; day and month NOT year. So other callers would learn that “James from California has a birthday on June 17th”. Hopefully this clarifies matters.

      I am sorry that your client didn’t like our new approach. Perhaps when you next have a client with a poor experience you could contact MMI directly with client details. We would welcome the direct feedback.

      We have been piloting this for a couple of months now and have surveyed our clients on their experience. Our findings are that there was no clear preference between the two approaches.

      One the plus side: Clients preferred the staged approach because:
      – It gave them time to digest the general education piece, before discussing their own situation in detail.
      – It allows them to focus clearly on their personal situation in the one on one session and not be distracted by general educational elements..
      – It breaks the counseling up into more comfortable blocks of time. Some clients feel uncomfortable staying on the phone for very lengthy periods.

      Some people prefer to get it completed in one sitting, but so far generally client reaction has been positive. The cost saving in counselor time is substantial, so this will help keep fees affordable and we will continue to monitor client acceptance and satisfaction.

      Finally, you might like to know that several other agencies have already taken a similar approach. I think you will see innovative approaches to counseling cropping up quite quickly. Counseling agencies are trying to be sensitive to the cost burden for counseling shifting directly to the consumer and the trick will be to try to contain costs while maintaining the quality of counseling and remaining in compliance with HUD guidelines.

      • Mr. Fenton,

        Please note that the complaint is not about the group approach.

        The counselees told us that the counselor gave a first and last name and asked them to respond not with their birthday but their birth date. What you think may be happening in the group session is not what is happening per our counselees. They were told that to gain credit they must respond with their birth dates.

        This is the number one complaint which is of greatest concern and needs to be corrected immediately. Using anything to do with the birth date, Social Security numbers, maiden names of ancestors, or other personal indentifying information needs to be condemned and avoided at all costs.

        At this point this is not a six year loan originator speaking but a very concerned CPA with over forty years of experience dealing with personal information. The method you are using can go wrong very, very easily and you personally would never know it until long after it occurred.

        This issue is so important and of immediate change, I am dealing with it as a separate topic at this point. I do not want it lost in other matters; again the use of birthdays or birth dates in group settings is in need of immediate change.

        As a suggestion, why not use the zip code or the city where they live? You can always give them a MMI number or let them choose their own identifying item like the name of their favorite restaurant or favorite teacher, things that are not normally used for personal identification purposes and are unlikely to change from date of intake to the date of the group presentation. It really is not that hard. Then as a backup use a birthday but never a birth date.

      • Mr. Fenton,
         
        This comment focuses on the MMI experience of the two counselees in question.  Quite frankly this seems to be an exception but nonetheless per our prospects, it occurred.  Several of our prospects have used MMI.  This is the worst experience we have ever heard.
         
        The intake counselor explained (?) the new process as being in three parts:  intake, a group session, one-on-one counseling.  He told the counselees that at the end of the last session, they would receive a (FIT) score of zero to five and that no one gets a zero.  He then went on to say that from the score the counselor would tell them if they qualified for a HECM.  The intake person emphasized that the higher the score the less likely they were to get a HECM.
         
        Further they were told not that there would be up to 30 counselees in the group session but 30 counselors.  Each would be asking them personal questions about their finances “so be prepared.”  The intake person did correctly say that there would be questions asked about HECMs in a separate and personal session with a counselor who would also be giving them their 0 to 5 score from the group session. 
         
        The counselees said that the group session was full of mechanical and administrative problems.  They were told they would be asked to respond with their birth DATE (not their birthday) for session credit when their name was read.  As the counselor was gathering the the birth dates, the mute system kept going off and on so that it became impossible to get the birth dates after the first few gave theirs.  Finally, the counselor gave out a number for each section of the session so that the participates could get session credit by giving those numbers to the counselor in the final phase of counseling.   
         
        To be clear we would have lost the counselees if they had not come to us through someone they trusted, a manufactured home dealer and for whose customers we had provided four HECMs in the past.  We told the prospects about one-on-one counseling and that it was personal and confidential provided by people who knew what they were doing.  We also told them about FIT and its scoring system but it would have no impact on their obtaining a HECM.  While they trusted us throughout the process, after the intake session they did not trust the process or our presentation on how it worked.  They are now thinking through their counseling experience and how little we knew about it.  They are now questioning how much different the loan process will be than what we say it is.  Counseling instilled no confidence in us.
         
        The coup de grace to the whole counseling experience was when the counselees asked what their 0 to 5 FIT score was and the counselor told them they would get that in the mail with their counseling certificate because he would not be entering their FIT responses until later that day.  When we asked these counselees to provide their experience to MMI, they were so disturbed by the experience and knowing that the counseling certificate was critical to getting their loan, they felt less than comfortable about doing that.  We explained to them they were concerned about nothing but then again how credible was anything we said about counseling.
         
        MMI did not instill confidence in us, the HECM process, need I write anymore about counseling?  The executives at MMI may believe that their pilot program is functioning properly but from what the counselees told me, there are many things needing change.  What MMI did by not informing the origination portion of the industry about the pilot program long in advance was to create an atmosphere of less trust towards the counseling agencies (not counselors personally).  The poor intake experience needs to be investigated.  To be blunt this whole experience makes one wonder if counseling agencies understand how hard we work with seniors to overcome their reluctance to go through counseling.

      • Also,

        I think that you do make a valid point about the need to find ways for counselors and lenders to have a constructive dialogue about how to best serve our mutual clients. Several counsleing agencies will be presenting as part of a break out group at the NRMLA meeting in Boston in October and we would welcome the opportunity to explore this theme.

  • This group approach is contrary to HUD regulations, which state that reverse mortgage counseling is to be delivered in a one-to-one format.  The agency offering this service may believe that they are walking the line because they are doing parts of the counseling in individual sessions, but they are doing a serious disservice to clients, who do not have the opportunity to have the information tailored to their individual needs, as is supposed to happen.

  • Dear Mr. Veale:

    Perhaps there is some confusion; your
    description of our group education session verification process is
    somewhat misleading. We verify that clients are on the call by
    calling out there first name ONLY and the state that they reside in.
    The client is then asked for their birthday; day and month NOT year.
    So other callers would learn that “James from California has a
    birthday on June 17th”. Hopefully this clarifies matters.

    I am sorry that your client didn’t like
    our new approach. Perhaps when you next have a client with a poor
    experience you could contact MMI directly with client details. We
    would welcome the direct feedback.

    We have been piloting this for a couple
    of months now and have surveyed our clients on their experience. Our
    findings are that there was no clear preference between the two
    approaches.

    One the plus side: Clients preferred
    the staged approach because:

    -It gave them time to digest the
    general education piece, before discussing their own situation in
    detail.

    -It allows them to focus clearly on
    their personal situation in the one on one session and not be
    distracted by required general educational elements distracting form the individualized nature the
    one on one session.

    -It breaks the counseling up into
    more comfortable blocks of time. Some clients feel uncomfortable
    staying on the phone for very lengthy periods.

    Some people prefer to get it completed
    in one sitting, but so far generally client reaction has been
    positive. The cost saving in counselor time is substantial, so this
    will help keep fees affordable and we will continue to monitor client
    acceptance and satisfaction.

    Finally, you might like to know that
    several other agencies have already taken a similar approach. I think
    you will see innovative approaches to counseling cropping up quite
    quickly. Counseling agencies are trying to be sensitive to the cost
    burden for counseling shifting directly to the consumer and the trick
    will be to try to contain costs while maintaining the quality of
    counseling and remaining in compliance with HUD guidelines.

  • Rmcounselor. You are mistaken.

    Should you care to discuss the process
    we use I would be happy to elaborate, but I won’t spend time
    responding to anonymous posters who feel entitled to criticize our
    counseling process without knowing the facts first.

    • >> who feel entitled to criticize our counseling process without knowing the facts first

      rmcounselor – please reference us to HUD’s regulations that say counseling is to be delivered in a one-to-one format.  That’d provide Mr. Fenton with the facts he can respond to (even if you are an anonymous poster).

      RMD would lose a lot of commentary, and I wouldn’t learn as much, without anonymous posters like you, and Mr. Critic, or Mr. Cynic.

      • Housing Counseling Handbook 7610.1, Chapter 4, Section A.3.c states:

        “One-on-one reverse mortgage counseling is required to receive a HECM loan.”

        Clear enough?

    • Mr. Fenton,
      I was responding to the process as described by Mr. Veale, which was the only information available at the time I wrote the comment.  I stand by what I said in relation to the information I had to work with.  If in fact clients are still given sufficient time for an individualized explanation of the reverse mortgage, I have no problem with them ALSO receiving a more general educational presentation in a group.  My concern is that presenting the basic facts in a group setting will make it more difficult for clients to have the information tailored to their situation, needs, vocabulary, educational background, financial sophistication, etc.  However, if your counselors are permitted to take the time to go over the information again in an individual setting, tailoring it to the client, then it sounds fine to me.

  • One clear ‘take away’ from all this back and forth is that the counseling agencies need to pre-announce to the originating community any changes in practice & procedures, however well intentioned as this clearly is. 

    Mr. Veale rightly states that we originators are trying to ease concerns re counseling on the part of our borrowers by describing the process in advance, and if we describe it incorrectly it boths adds to the already present anxiety and detracts from our credibility.  Neither is good thing in the present environment.  Just wait until Financial Assessment arrives.

    • Very well put. MMI has a lender notification email list that we use for just this purpose. We sent out an annoucnment about this progfram change 9/20 to several hunderd lender emails once we had made the decision to expand our pilot to all HECM counseling.

      Not getting the emails? I don’t want to post an email here, but we are not hard to find. Please contact myself or Jennifer Flynn at MMI to be added to the email list.

  • I would appreciate it if you would encourage the client to contact MMI to let us know about their experience. The extraordinary account of the counseling process you relayed (as described by a single household)  is radically different from the way in which we do business in just about every respect I can think of. 

    Clearly the client was confused. We would like the opportunity to see if we can understand how that happened. As it is, I cannot really respond to these assertions other than to say they make no sense from our standpoint.

    • Mr. Fenton,
       
      Please look back through this thread and note that I did not initiate the use of the name of MMI until I was asked which counseling agency it was.  I have had no intention to point out MMI in particular or harm its fine reputation in the industry.  This counseling experience clearly was the huge exception, not in any way the rule.  My point is and has been, the change to a group presentation is new and as with all new systems, there ARE and WILL BE flaws.  But perhaps the most important point of all is when there is a significant change in counseling, such change needs to be fully communicated to originators, not just lenders.  
       
      The husband in question is in his early seventies and is a developer/general contractor who lost almost everything due to the mortgage meltdown in a development in Arizona from which he is attempting to recover at least in part.  He is bright, articulate, and extremely alert to what goes on around him.  He is no one’s fool.  I have had less experience with his wife so I cannot attest to her personal characteristics other than to say there are no obvious signs of age or decline in mental acumen in her communication.
       
      Neither of the counselees wants to initiate a compliant.  Perhaps a call from MMI as a follow up on the counseling experience would provide more information from them.  I think what I have provided should narrow that search.

      Thank you for “listening.”

string(106) "https://reversemortgagedaily.com/2011/09/25/as-oct-1-approaches-hecm-borrowers-see-counseling-bottlenecks/"

Share your opinion