HUD Advises Reverse Mortgage Lenders on New Calif. Counseling Law

A new California reverse mortgage counseling law is scheduled to take effect on January 1, and the Department of Housing and Urban Development informed counselors and reverse mortgage lenders on how to prepare for the legislation.

The bill, California Assembly Bill 2010 requires that reverse mortgage counseling be conducted in person unless the borrower opts out.

Counselors are being instructed by HUD to continue using the current counseling certificate with an addendum designed by the National Reverse Mortgage Lenders Association that allows a borrower to opt out, in writing, to the face to face counseling. It also allows the counselor to collect additional information from the borrower. 

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“AB 2010 requires additional information to be collected, above and beyond what is contained in the HECM Counseling Certificate,” according to NRMLA. “Counselors will be required to complete the addendum, or some such document, for applicants in CA, but Lenders’ Quality Control departments will need to ensure that such information as required by AB 2010 is included in the applicant’s file.”

View the HUD guidance here.

Written by Elizabeth Ecker

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  • >>counseling be conducted in person unless the borrower opts out.

    I wish North Carolina had the same provision to opt out. Most my clients have to wait a couple months for their session. Some homeowners drive great distances, because a Counseling Agency a couple hundred miles away has an opening in 2-3 weeks, compared to the local Agency. Recently, one of my clients left at 6am in the morning, to arrive by 9:30am, and were able to get counseled two months sooner. It’s simply ridiculous.

  • What’s the process like? When a consumer calls a Counseling Agency and tells them they want to be counseled by telephone, how does the Counseling Agency get the opt-out document to the consumer for signing? (I’m assuming the opt-out document needs to be signed first).

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