Reverse Mortgage Counseling Prepares for Crunch as April 1 Deadline Nears

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.”

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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

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  • Its a shame they can’t accommodate these folks but its their loss as there are others that CAN meet the deadline. People will pay for better service.

  • It would be great to see counseling agencies ramp up their staff and work extended hours to meet the demand and help as many homeowners as possible.

  • If Fixed rate is such big loser, what’s to prevent HECM creditline borrowers from taking all available cash from creditline in one shot?
    If HUD believes that the HECM is doing so poorly, what is the rational for the Saver with no upfront MIP?
    What happened to the HECM reserves from inception of the HECM program till they split the HECM to a new reserve account in 2011?
    Barney Frank said the HECM program was the best money maker the government ever had.

  • One of my clients calls every counseling agency every day, asking if there are any cancellations. He can’t afford to pay for it, and the only date he can get is the first week of April. I’d love to help him but that’s the only fee I can’t pay.

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