Counseling Provider Questions Mass. Reverse Mortgage Requirements

Legislation passed in Massachusetts could negatively impact the reverse mortgage industry, a Banker and Tradesman article published last week argues.

The article, penned by Tony Lopes, housing director for Cambridge Credit Counseling Corp., indicates that while the industry has seen a decrease in volume and higher fallout rates, a bigger issue may arise for Massachusetts reverse mortgage lenders due to “a number of legislative initiatives that, though well intentioned, will probably do more harm than good for consumers.”

Citing Massachusetts HB 4934, a mandate to require face-to-face reverse mortgage counseling of the borrowers who seek reverse mortgages who fall below a certain income requirement, Lopes argues that the legislation was drafted primarily to address tenants’ rights during foreclosure, but that it could have an adverse impact on reverse mortgage borrowers who by and large, prefer phone counseling in the first place.


“On the surface, this seems like a good idea…” Lopes writes. However, he says, “Statistics show that 95% of seniors prefer telephone counseling even when an agency is nearby. Bills like HB 4934 strip seniors of that choice.”

Further, the issue of counseling funding, provided annually by the federal government, is another to consider. “While many organizations have secured grants allowing them to provide free counseling, the reality is that most run out of funding before the end of the year and have to charge seniors directly. Face-to-face and in-home sessions are also more costly, and that burden will invariably be passed on to the applicant,” he writes.

Ultimately, Lopes says, several recent requirements by HUD have led to more comprehensive counselor preparation, better testing and continuing education and more safeguards in the counseling process that do not inconvenience the senior borrowers.

The Banker and Tradesman article is available online by subscription only.

Written by Elizabeth Ecker

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  • I don’t have access to the original article, so I cannot comment on anything but what I see here.  I still believe in-person counseling is the best.  I cannot say it is perfect for every area, but here in MA, where there should be counselors within easy reach, it should be required.  I can see in-home counseling would be more costly, but not in-office counseling.  At least it isn’t to my organization.  I also agree that more seniors may want phone counseling, but we do not always give people all of the options they want.  I am quite sure that there are a large number of seniors that don’t want counseling at all.

    Funding is the key and I both believe and have said that if Massachusetts wants to mandate face-to-face counseling then they should also put out some grants to make it possible.

    Frank J. Kautz, II
    Staff Attorney

    Community Service Network, Inc.
    52 Broadway
    Stoneham, MA 02180
    (781) 438-1977
    (781) 438-6037 fax –work –private

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