Major Reverse Mortgage Counseling Agencies Agree to Merger

CredAbility and ClearPoint Credit Counseling Solutions, both providers of reverse mortgage counseling, announced on Tuesday an agreement to merge the two organizations, effective Dec. 31, 2013.

The merger will create the second-largest nonprofit credit counseling organization in the nation, with 50 offices in 15 states from California to New York. Face-to-face reverse mortgage counseling will be offered in the vast majority of those offices in addition to phone counseling services, Phil Baldwin, CEO of CredAbility, told RMD. 

The Department of Housing and Urban Development announced $40 million in funding awards to housing counseling agencies nationwide in June, following fund allocation changes. HUD now awards agencies a single grant encompassing all types of counseling rather than allocate separate grants for reverse mortgage counseling. 

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While the streamlined funding process may have posed a challenge to some agencies, the newly-announced merger is a strategic decision by CredAbility to find the right agency to partner with going forward in order to create opportunity to define its own future, according to Baldwin. 

“As we look out into the future, we see consolidation in the credit counseling industry. That was an obvious part of our decision to merge,” he says. “We have a great partner in ClearPoint, and this sets us up in a good position with the perspective of the future that we have, which to some degree is tied to funding.”

Combining the strengths of each agency will allow the newly formed organization to provide a broader range of services to consumers, from budget and credit to housing and bankruptcy counseling, along with in-person and online education courses. In September, the two organizations held a combined approximately 700 reverse mortgage consoling sessions. 

“This merger provides us with the financial resources to grow, which will help millions of low- and moderate-income households across the nation,” said Baldwin in a statement. “In addition to helping people in financial distress, we now have the resources to provide people with new services that will help them build financial security.”

The newly-combined organization will go by ClearPoint Credit Counseling Solutions and will be headquartered in Atlanta. Chris Honenberger, CEO of ClearPoint, will remain CEO of the organization, while Baldwin will become president. The board of directors will consist of 30 directors, 15 from each organization. 

“By combining our strengths—ClearPoint’s credit card repayment plans with CredAbility’s housing and bankruptcy counseling—we have created a stronger, more robust full-service counseling and education organization,” said Honenberger. “In addition, with more people seeking financial counseling and education online and by phone, the combination also allows us to invest in new technology more efficiently.”

ClearPoint cross-trains counselors to provide all types of counseling, including for reverse mortgages, and Baldwin says that practice could get implemented across the new organization. 

“We’re really pleased by that [strategy], and hope to adopt that in the offices we have,” he told RMD. 

Post-merger, ClearPoint Credit Counseling Solutions will have more than 150 credit, housing, and bankruptcy counselors and financial educations and will continue to be accessible seven days a week through telephone and internet counseling.

“My expectation is, the merger will be a betterment for us, [combining] the strength of a nationwide outreach and infrastructure through telephone systems and a technological approach, and a national geographic footprint,” says Baldwin. “It’s the best of both worlds.” 

Written by Alyssa Gerace

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