Reverse Mortgage “Pre” Counseling Serves Some, Not All

With reverse mortgage counseling times on the rise, and recent funding woes that left counseling agencies without federal funding for a period of time in 2011-2012, some have looked into pre-counseling solutions in an effort to make the most of the time counselors do spend with borrowers. 

From online sessions to conference calls where preliminary information is shared with a group of potential borrowers at one time, the reaction to “pre-counseling” has been somewhat mixed, though one counseling agency says it is a big time saver. 

For CredAbility, the feedback has been entirely positive, says Alan Stacy a reverse mortgage counselor. Borrowers can access pre-counseling materials through an online portal, and can go at their own pace. It makes for more quality time during the actual counseling session that follows, he says.


“It frees up a lot more telephone time for me to talk about the reverse mortgage.”

CredAbility is seeing roughly 10% of its borrowers go through the pre-counseling, after rolling it out in mid-2010. It’s popularity has grown steadily.

“It allows our clients who are computer savvy or who have adult children who are, to go on the website and learn more. It covers everything HUD requires and allows them to develop loan projections so when I follow up with the phone counseling, they’ll have those numbers in front of them,” Stacy says.

Money Management International launched an education program in September as a precursor to reverse mortgage counseling, with the goal of making the counseling process simpler. For MMI counseling clients, they can receive the pre-counseling via online or a conference call.  

Some borrowers have reported they are not happy with an additional step in the process.

One originator told RMD that the pre-counseling phone call caused frustration.

“[My client] called [a counseling agency] for a telephone counseling appointment and were informed that they counseling would be a two-stage process,” one originator told RMD. “…that really put these borrowers off.”

But optional pre-counseling has saved hours, even days, Stacy says. 

“The HUD required pre-counseling packet can be downloaded instead of having it mailed,” he says, for example. “It gets there so much faster and sooner. It allows clients to pick a date and time that fits. There’s more quality time then to discuss concerns they might have.” 

Written by Elizabeth Ecker

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  • So I send all the pre-counseling required info to my clients and the agencies still fight them saying they too have to provide it.  Doesn’t make sense.  Some of the agencies “get it” and some don’t when it comes to this.  Most of the quoting tool software packages print out the entire pre-counseling docs- why won’t the agencies acknowledge that?

    •  Hello Wealthone,

      I am one of those counselors, but I have a reason for it.  I tried letting the salespeople send out the pre-counseling material, it was hit or miss whether they did it and I would often find documents missing.  I cannot rely on a hit or miss system, I have to be sure that my clients are getting the info that is required prior to seeing me.

      Now, I will mention that in doing that there is only, usually, about a week delay in seeing someone.  If I get a call today (Wednesday the 23rd), chances are very high that I will see that person next week (Thursday the 31st) or the week following.  I usually mail out the pre-counseling material within a day of being called because I have packets ready to go.  I just need about 10 minutes to plug in their info, print it, and drop it in the mail.

      Frank J. Kautz, II
      Staff Attorney

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

  • I strongly doubt any provider of any good or service who declares that all of their customers or clients are all positive about any aspect of their business, unless they have few clients or customers.  But quite frankly this is not the first thing CredAbility has declared which is very doubtful.  “Don’t try to out puff a good salesperson.  It backfires.”

    Then Alan declares:  “It frees up a lot more telephone time for me to talk about the reverse mortgage.”  If pre-counseling education is not about reverse mortgages what is it about?  If the education provided in pre-counseling is adequate why focus more on it rather than the real need of most counselees which is how the proceeds will be utilized ALONG WITH other steps to extend or increase cash flow in retirement.

    Alan proves that for most counseling execs, FIT is just something to get through.  It has so little substance that they ignore the real need, helping counselees to see how the reverse mortgage will work into their overall retirement, financial, and estate planning.

    Pre-counseling is a great idea only if it frees up time for counselors to focus on the most crucial points of the HECM and also retirement planning; otherwise, it simply sounds like a cost savings move or an admission by counseling agencies that they lack trust in their own counselors complying with the education requirements of the new counseling protocol.  

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