Reverse mortgage counseling agencies are beginning to feel an influx of demand for counseling as the April 1 deadline approaches for case number assignments before the fixed rate standard reverse mortgage option becomes a thing of the past.
Some agencies are reporting wait times that have gone up to three to four weeks—or more—as borrowers look to close the loans under the timing specified by the Department of Housing and Urban Development. This is especially the case for face-to-face counseling in states including North Carolina, according to counseling agency sources.
“I would attribute the increase in calls and wait time for the appointment in part to the change in HECMs effective April 1 – elimination of the HECM Standard fixed rate,” says Kathy Conley, housing specialist with GreenPath, Inc. “Many clients state, when they call for an appointment, that they are seeking the HECM Standard with a fixed rate and would like to be scheduled as soon as possible, before April 1. At this time our earliest available appointment is approximately April 3rd and we have a waiting list for cancellations.”
Other counselors told RMD they are booked through March into April in anticipation of the changes, while others are still handling phone counseling at a normal rate.
“I haven’t seen a large increase in the number of calls or activities,” says Allen Stacey, reverse mortgage counselor with CredAbility, who notes the time sensitivity of the product going away.
“If I’m a lender and I take an application this week for a borrower who prefers the fixed rate, it would be virtually impossible to get the certificate in hand to order the case number in time,” he says.
Others liken the increased pressure on the counseling process to other times of major reverse mortgage change, such as the raise in insurance premiums in 2010 or when large lenders have exited the market.
“When the big guys pulled out of the market before, it was the same thing. Now with FHA changing some rules, it has that same impact,” Stacey says.
Written by Elizabeth Ecker