Do Reverse Mortgage Borrowers Prefer In-Person Counseling?

With ongoing legislative efforts in Massachusetts regarding a face-to-face reverse mortgage counseling mandate to resemble the in-person requirement found in the state of North Carolina, there has long been a question of how many borrowers prefer face-to-face counseling when it is available. There is agreement that in-person counseling is a valuable tool, but a question remains as to how many borrowers actually prefer it.

Often it has been said by reverse mortgage counseling participants that the “vast majority” of clients prefer telephone counseling, and some recent data shared by housing counseling agencies demonstrates just how vast that majority is.

Taking the greater Atlanta market for example, reverse mortgage counseling intermediary CredAbility cited its most recent data from the past two years to show that less than 1% of its roughly 11,000 Atlanta area reverse mortgage clients chose face-to-face counseling when offered the option between the two, both of which are available in that region.


CredAbility counted 100% of its 11,000 clients as opting for the phone counseling in the Atlanta area in 2011. In the previous year, the proportion of those opting for in-person sessions was 0.1%, again out of roughly 11,000 reverse mortgage counseling sessions in that region.

“The phone counseling is available in all 50 states, 24 hours per day,” says John McCosh, spokesman for CredAbility. “We do offer in person counseling where we have a brick and mortar presence where you’d think there would be demand for in person counseling.”

The option is not widely used, McCosh says, perhaps in part because many borrowers attend counseling with an out-of-state family member via conference call. Travel to and from the session is another issue to be considered.

Massachusetts counseling agency Cambridge Credit Counseling Corp. has seen a similar trend, weighing heavily toward phone counseling.

“Ninety-five percent of our counselees that are within a reasonable driving distance choose to do phone counseling over face to face,” says Tony Lopes, Cambridge’s housing director. That figure excludes the agency’s clients who live more than 30 miles from the office. Including those clients, the figure is close to 1% to 2%, he says. “When you factor in driving, mobility issues and wanting family involved on the session via conference call, most prefer phone.”

Written by Elizabeth Ecker

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  • I work in the Los Angeles area, which likely has more counselors within reasonable driving distance than anywhere.  I rarely have a client elect to do in-person counseling.

  • The problem with this analysis is that there are very few borrowers who actually have experienced both and really know what they are choosing.  If counseling is presented to clients as a procedural hoop that they need to jump through on the way to getting their loan, and if they are told that phone counseling is the quick and easy way to get it done right away, then it is no surprise that most of them would choose that option.  There’s no question that phone counseling is more convenient, for the client, the family, and for the counseling agency that is trying to maximize their workflow. 

    On the other hand, I’ve had the opportunity to counsel a number of clients who had previously been through phone counseling, and then came to me for face-to-face counseling.  Every one of them has commented on how much more they learned from the in-person meeting.  (I admit, we don’t know if the important variable was the medium or the quality of the counseling offered by two different counselors.)  I’ve also had a number of clients comment at the end of the session that they were so grateful that North Carolina requires face-to-face counseling, because they didn’t think they would have gotten nearly so much from a phone session.

    The real question, which has not been studied and would be difficult to study well, is how effective the two forms of counseling are, rather than which is “preferred” by clients who don’t know the difference.  Note that I am not talking about client satisfaction, because again, the problem is that a client who has not experienced both forms does not have any way of knowing what they missed.  To really study this rigorously, you’d have to randomly assign large groups of clients to phone counseling vs. face-to-face counseling, using the same pool of counselors, and then assess in some way how well they understand and retain the information presented.  I doubt that will ever be done. 

    • I am just curious, What is your experiance prior to being a FHA counselor on reverse mortgages? What kind of course or licensing is required to be a counselor for FHA.

    • RM Counselor,

      Is success of counseling about how counselees to be measured on how counselees “feel” about the session (consumer satisfaction) or about the actual consumer protection counseling provides?

      Yes, it is important for seniors to understand the product and a face-to-face meeting may measurably but marginally improve the results; however, the abject failure of most counseling sessions is helping seniors to understand their financial situation and what their future financial situation might be based on several scenarios.

      It was absolutely alarming to see counseling execs state that somehow higher levels to younger borrowers are getting HECMs and what that might mean to them.  The real issue is that counseling as a whole is ill prepared to provide the financial assessment these individuals really need to evaluate their situations.  FIT lacks the structure needed to look at the long term picture of a 62 year old senior who is being advised by her financial planner to put a HECM in place now while she is working full time and has the expectation of continuing her business well into her 70s where she has the business structure to do that JUST AS long as her health holds out.  It was designed for the 76 year old widow or widower and lacks the rigorous adaptability needed to look at a wide range of situations.  If the senior is not 76 years old and single, what good is FIT??  

      Rather than becoming so distracted with the means of delivery, it is the financial assessment portion of counseling which is in dire need of evaluation and a total overhaul NOW!!!

      •  Excellent observation. Let me add one other element. I believe it should be required that the counseling be done by someone who is knowledgeable about legal and social policy issues in the state where the potential borrower lives. There are so many state specific policy and legal issues relevant to helping someone analyze her/his specific situation. I used to manage a counseling office in Calif., worked mostly by phone — and we declined to counsel anyone from out of state because we lacked the necessary expertise. If a small state has no counselors available (I don’t know if that is the case, but it could be), then someone elsewhere should have demonstrated expertise in that state’s laws and policies to counsel across state lines.

      • David,

        Your decision was not just wise but was in the best interests of the seniors you counseled.  I am no fan of learning the rules of one social program and applying them to the social program of all counties and all states.  No one is an expert on everything nor do rules of one necessarily apply to all.I always chuckle when some originators go on and on about helping seniors not violate the social programs they may be participating in.  They rarely advise the listeners to refer these seniors to program experts instead those speaking describe Medicaid or other rules as if they have application to all social programs.  I have worked with seniors in northeast California where they are involved in county programs we do not have in Los Angeles County.  Making a call to the program telephone answering line did not make me an expert or a knowledgeable advisor on those programs.  I certainly did not feel like I could advise a senior through the rules of that program.  Instead I tried to help them find someone with that expertise and then tried to encourage the prospect to seek out more than one source.

  • I believe it has a lot to do with the Loan Officer and how well they instruct their clients.  When you take the time with them up front, before any application and go over all options and the entire program in detail, the counseling becomes a reiteration of what they have already learned whether it’s in person or by phone.  If we take the time to educate the customer, counseling becomes a method of confirmation.

    • Lonny,

      Counseling execs of major counseling agencies just do not want US to do that.  They INSIST on obtaining the most TEACHABLE moment which means they want us get off the phone in the first seconds of the first contact and get counseling involved right then.  To me the value of that concept plus 25 cents still will not get a senior a good cup of coffee.

      Counseling execs would prefer if you did not answer A single question.  They view the counseling process as the only reasonable and sufficiently unbiased means of delivering the information needed.  You see down deep most execs of major counseling agencies believe we lack sufficient integrity.

      Personally I find the whole rational of the most “teachable moment” as personally offensive, insulting, and disgusting.  I never feel as offended by any part of counseling as when counseling execs launch off into this argument as their means of saying:  “Originators just do not have the necessary integrity to provide seniors with the necessary information they need to make an informed decision.”

  • The question is whether the added benefit of a bit more information beyond an adequate understanding provides the borrower with enough reason to eliminate the phone option.  Most of my clients say they felt they knew more than the counselor did about the product..  The downside of course is the inconvenience for many seniors.  We have a nice office and still 9 out of 10 of my clients prefer have me take the application at their home.

    It is obvious that this would add a huge bureaucratic layer to what is already a detailed procedure to say nothing of additional time it would add to the process.  Most applicants want to get through it as quickly as possible.  Who is going to underwrite the quadrupling of the current available staff?  And that is being conservative since counselors would then go from handling six to 8 sessions a day down to perhaps two or three due to travel.

    How quickly can they be trained?  The counseling fee will have to go up to allow for time/miles.  A phone call is more than capable of informing the counselor of his client’s product knowledge, mental clarity, overall health and any other salient issues.

    We have to ask what the consumer gains versus what they lose with any such procedural changes.

  • I live in Atlanta and I can assure you, if you lived here, you would select phone counseling. Trying to get across the street can take half an hour.

  • From a housing counselor’s point of view, I conduct almost all of my counseling sessions face-to-face. My clients have often said they could have not have really understood all of the numbers, documents, etc., if they had tried to receive the counseling over the phone.  Also, HUD requires counselors to complete the FIT and MyBenefits questionairres with them, and provide/interpret the results. Also not that easy to do over the phone.

    I believe that phone counseling should remain an option. However, I agree with RM Counselor. The analysis used to come up with the figues in the article (95-100% of clients prepfer phone counseling) is flawed.

    Counselors are required by HUD to provide literature and reports to clients prior to the counseling session and give them adequate time to review them. I typically schedule my appointments a week out from mailing, whether its for face-to-face or phone counseling. The vast majority prefer to come to my office or have me meet with them at their home, rather than sit for 90 minutes on the end of a phone, which is how long a session normally lasts (given the questionairres to be completed).

    Just my two cents!

  • Betsy,

    What happens when originators provide the HUD required literature and “reports”?  Do you still insist you must mail them out and then schedule an appointment a week later?

  • I think the most customers prefer to meet with the loan officer face to face as well.  In my experience when I sit down and go over the program face to face my customers get a better understanding.  When its time for counseling they tell me it was a great refesher course.  I want to know my customers and I want them to know me and what better way to do that is at the kitchen table. 

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