Funds and Applications Fall, But Reverse Mortgage Counseling Agencies Rise

Housing counseling agencies large and small are sticking with reverse mortgage counseling despite the decline in applications from borrowers seen this year, and a decline in funding.

There were 448 Home Equity Conversion Mortgage counseling locations as of this month, according to data compiled by Ibis. That number compares with 416 agencies at the time when housing counseling funds dried up temporarily in November of 2011, and fewer than 400 agencies in late 2010, the Ibis data shows.

As they allocate funding through the end of the current fiscal year, some of the large intermediaries have seen wait times increase for HECM borrowers. Some have also implemented pre-counseling measures to make the process move along as effectively and efficiently as possible once the appointment is scheduled to take place.

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But smaller, independent counseling agencies, even those that do not receive Department of Housing and Urban Development funding, are staying in the business of HECM counseling, and some say they are more positioned to meet the needs of borrowers when the larger agencies start to show a slow down.

“It’s hard to get the word out when you are a smaller agency,” says Jeremy Shadrick, president of Tulsa-based QuickCert. “There is concern in the market to be adding agencies to their lists, but it may make sense to have a [smaller agency] because we have the ability to staff according to volume as opposed to other factors. We are able to manage consistent growth and plan for it.”

For QuickCert, the growth has been from the agency’s launch in September to around 1,600 HECM counseling sessions quarterly, Shadrick says. The agency hopes to become a recipient of HUD funding ultimately. Remaining flexible is the strong suit a smaller agency brings, he says.

“It’s a difference in philosophy,” Shadrick says.

Written by Elizabeth Ecker

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  • While our industry has experienced extreme drops in endorsement volume, there is less of a drop in the counseling community when it comes to counseling sessions.

    HUD recently released a report which showed that the percentage of certified counselees obtaining HECMs was under 50%. A few years ago, that rate was over 75%.

    So for example, let us say the endorsements for fiscal year 2006 was 76,351, then the number of counseling sessions would have been right at 100,000. Today the number of certified counselees would have to be 159,000 which is slightly greater than the number of counseling sessions needed in fiscal 2008 to get 114,692 endorsements.

    So at our current rate of endorsements and using a rate of 55% for certified counselees obtaining HECMs rather than 48% which was reported most recently, to get to 55,000 endorsements, approximately 100,000 certified counselees would have been required to be counseled between June 1, 2011 and May 31, 2012. That number is expected to rise to about 115,000 to produce the same 55,000 endorsements next fiscal year.

    Choose the rational, but somehow our industry modus operandi appears to be the underlying reason for the inflated number of certified counselees needed to close the same number of HECMs. Many claim the inflation is due to the growth in call center operations. Others believe that counselees are not as prepared as they were in the past when even then it was demonstrated that those who fell out between counseling and closing many times lacked the information to make the decision and many times were confused by the information they did receive. As one industry participant has said: “I could make a great living from meeting with those who do not get HECMs and went through the call center system.” Based on the numbers, that statement seems on point.

  • Extremely happy with QuickCert. Thier counselors are extremely informative and prompt. My customers have nothing but good things to say when they get counseled by QuickCert. Far cry from other agencies in the industry.

  • Extremely happy with QuickCert. Thier counselors are extremely informative and prompt. My customers have nothing but good things to say when they get counseled by QuickCert. Far cry from other agencies in the industry. JR.

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