HUD Issues Reverse Mortgage Counseling Reminder, Highlights Steering

The Department of Housing and Urban Development issued a reminder this week regarding the reverse mortgage counseling protocol. In the notification sent to all mortgagees and counseling agencies, HUD pointed to several specific aspects of counseling that all lenders and counselors must heed in the protocol.

Sessions should last no less than 90 minutes, according to HUD, to include the Financial Interview Tool analysis and BenefitsCheckUp for any clients at or below 200% of the Federal Poverty Level. 

Both lender steering and counselor steering are noted in the compliance guidelines with preventative measures. 

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“The clearest way to avoid steering is by not presuming that a client wants to contact a lender unless the client specifically asks for help in finding a lender,” HUD writes of avoiding counselor steering. “If a client does initiate a request for help in finding a lender, then counselors should tell them about HUD’s current lender list or give them a copy of it.”

Lenders, likewise, are reminded they may not steer, direct, recommend or encourage a client to seek the services of a particular agency or counselor. 

“Lenders are required to give every client a list of HECM counseling providers that includes the national intermediaries providing telephone counseling and five agencies in the local area and/or state of the client with at least one of the local agencies located within a reasonable driving distance for face-to-face counseling,” HUD writes. 

View a copy of the protocol reminder. 

Written by Elizabeth Ecker

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