HUD Asks Reverse Mortgage Counselors: Any Slots Left?

As housing counselors struggle to keep up with demand ahead of the new reverse mortgage rule changes, the Department of Housing and Urban Development is asking for their input and help.

HUD’s Office of Housing Counseling on Thursday sent an e-mail, addressed to all approved Home Equity Conversion Mortgage counselors, seeking input on their current workload — and their potential availability to take on additional clients as the October 2 rule update fast approaches.

The message asks counselors to report how many sessions they have scheduled through September 29, how many more potential borrowers they could accommodate before that date, and whether or not they could offer their services to clients outside of their specific regions.

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“Thank you in advance for providing information on your willingness and availability to provide HECM counseling to clients in need,” the message reads.

But as early as last week, counselors had begun reporting a shortage of open slots as borrowers rushed to get a case number on or before October 1, thus ensuring higher principal limits and potentially lower upfront mortgage insurance premiums.

“The call volume is just unreal,” said Jackie Boies, director of housing and bankruptcy counseling at Money Management International. 

Boies and her team began offering Saturday sessions and streamlined their internal processes in order to handle the intense spike in volume: During a normal month, the Sugar Land, Texas-based Money Management International handles 350 intake sessions, for an average of about 16 to 17 per day. During the past year, that number surged to 500 per month — and increased even more once the rule changes were announced.

“For the month of September, we’re averaging about 50 per day — and that number is increasing daily,” Boies told RMD last week.

Then, on September 14, Boies reported that the last slots through October 2 had already been booked, with potential borrowers of all types scrambling to lock down their HECMs.

“It appears to be pretty much everyone who had an interest in getting a HECM loan, and that have been advised by their lenders [to receive counseling immediately],” Boies said.

In Massachusetts, counselor Frank Kautz of the Community Service Network had only one opening left before the deadline as early as September 13 — and that was with offering three sessions per day, five days per week, far more than his typical volume. 

Kautz also took the step of calling clients who completed counseling within the last six months, warning them to take action before the new rules go into effect. Because counseling certificates are valid for 180 days, Kautz said, HUD should have given a similar timeframe for the lower principal limits.

“People have essentially six months to make a decision, and now you’re changing their decision times,” Kautz told RMD. “But it’s after counseling, and how many counselors are really going to call everybody and say, ‘Guess what?’”

“And I had to do it on a Saturday,” he added. “That was the only way to get everybody’s attention.”

Written by Alex Spanko

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  • Dear Mr. Carson, If you give me your date of birth and value of your home I will run the numbers for your Reverse Mortgage under the current rules and also under the rule changes that take affect on October 2.. Oh, and here is a list of counselors that you can call to make an appointment. Good luck!

  • If HUD had only provided a bit more time before the changes take place, the counselors and lenders alike could have been better prepared to handle the situation. I have a few clients left who want to get in but are unable to do so because they cannot find a counselor.

    • Laura,

      Why?

      HUD can only do so much and I am sure they did not want to take the action on PLFs but they needed certain information from the actuaries as they were getting the actuaries’ initial field work done on their fiscal 2017 review. The timing is like in most prior years where these changes went on.

      On September 21, 2010, HUD gave us the massive changes in Mortgagee Letter 2010-34 that took place on 10/4/2010. Other than financial assessment which seems more political than necessary, we have only had a couple of weeks to get ready for most similar changes. Back in late 2010, endorsement production was much greater than today so imagine the pipeline problems when the industry was less technologically prepared for changes and worse, counseling was starting a new protocol. You should have been in the industry back then.

      • I was in the business back then. Just because “that is the way it has always been” does not make it right. I have dealt with all of the changes throughout the years. I am merely suggesting that this is a big change and it would have been nice to have more time.

      • Laura,

        Other than HERA, the biggest change I have seen was on 10/4/2010. This change was 1) MIP was changed BACK to what it was and 2) a second floor change with a stretching out of the PLFs over a greater range. Are those two really that difficult to take in? Where were you then or 9/30/2013 when we actually had much more difficult and several new changes we had never encountered before?

        Too many in the industry complain about any change HUD makes.

  • Thank you HUD for being such an dominant overbearing parent to our development. I now must pressure my clients, destroying the years of reputation we have strived to build. I am forced to struggle with lump sum cuts, then i must adapt to credit hurdles, now i have to put even more hands asking for money in front of the people who are trying to get these money asking hands away from them. I started my career https://uploads.disquscdn.com/images/cb8e5dc7c243efb615d70ad3f8cccc9598964631b121302beb0b2fb8c0a6ee99.jpg in 2013 and have struggled every day, harder to survive as an employee in the industry. I’ve noticed my business can not grow with these constant restrictions. I would rather ask congress for a bailout then do what we are doing to the earning of these hard working people.

    • No one (at least HUD did not) promised YOU a living; if your employer made that mistake, take them to court. The risk you ask HUD to take would not change what HUD is doing and could lead to either a monthly cap on endorsements or harsher adjustments to both initial MIP and lowered MIP.

      After four years you are just learning what a HECM really is and can do for seniors. You need to get together with those more senior in the industry than you both in time and production. Your sales supervisor is a good source for company sales guidance but not for career guidance.

      • Wow! Aren’t you kind? No! Mephisferman never said ANYONE “guaranteed” him.a living. I agree that the pressure this put on us as loan originators to contact every last prospect we can that may be on the fence and basically pressure them to complete counseling and an app is just more fuel for the already negative fire surrounding the loan.
        No need to be so harsh with him. Sounds to me like you need a vacation.

      • Michele,

        Vacation sounds great. The change put no pressure on anyone other than the programmers, that is if originators are on their game.

        If anything the change gave opportunity to close on prospects who might not have otherwise closed or not closed for awhile. Working harder is that your complaint?

    • I have been in this industry since 2005 and seen many many changes, particularly in 2011 which was an awful year. I was with Wells Fargo that year, but ended up working for 4 different companies dues to company closings. We will survive this and continue to flourish. We hav dot search for the appropriate clients, the ones that need us the most.

  • Rather than attacking HUD, doesn’t this say that the supply of HECM counselors at this time is exceeded by the demand and really the problem is obtaining more counselors? This short notice business is for the birds. When have we ever had a three month notice of a change? Financial assessment which was more a lender need than a financial strengthening of the MMI Fund is the big, big exception.

    (I have read silly arguments that talk about how financial assessment will reduce most termination losses. Somehow at termination even though it is a market value of the home to balance due issue, these writers say it is really about borrower capacity finishing their presentation with worthless conclusions. Borrower capacity is mainly driven by property charge payment and property maintenance default issues, not by the value of the property or even the balance due to termination.

    Property charge payment and property maintenance issues come mainly from a lack of borrower capacity; where termination losses are all about collateral and the size of the balance due. Financial assessment is about borrower capacity, NOT collateral.)

    • An interesting question regarding the counselors, however the answer is a bit more difficult. In my area of Massachusetts, we can normally handle things and counselors are generally not full time. (I handle any number of other situations, up to and including litigating landlord/tenant cases, foreclosure prevention, and first time homebuying.) It is not practical from the counseling industry side to have a large number of counselors sitting around waiting. Further, the counselors themselves are often some of the people in this transaction that receive the least money. Many of us pay for our own education and testing, just to keep our jobs. If you want the counselors to be there for these surges, then they have to be paid.

      My comments as a counselor have to do with the fact that we need the time to prepare. I am normally scheduled out two weeks in advance. HUD’s bombshell, from the counseling side, meant that nearly everything else that I have to do had to be put on hold to be able to HECM counseling. With warning that it was coming, I would have had more appointments available and I wouldn’t be playing catch up with my paperwork. (On the annoying side, my 9:30 a.m. appointment never showed up, having gotten an appointment earlier in the week with another counselor. I am left with a slot that cannot be filled. At least my paperwork is finally caught up.)

      My wish is that HUD would give us more warning so that we have time to prepare. The last two weeks have been an amazingly busy time trying to accommodate as many people as I can. The phone never stops ringing and I have keep telling people that I cannot help them. Again, from the counselor’s perspective, it is about planning time.

      Frank J. Kautz, II
      Staff Attorney

      Community Service Network, Inc.
      52 Broadway
      Stoneham, MA 02180
      (781) 438-1977
      (781) 438-6037 fax
      FrankKautz@csninc.org

  • Here’s an interesting point: if HUD mad available any information thy get from asking the question about available counseling – what do they do with it? They certainly can’t supply that to the industry and risk someone “steering” a client to a counselor now can they????

    • Ed,

      HUD does not have this information. How many counseling agencies are there? Larger lenders generally have a team that checks into where counseling appointments are available. While HUD might call that steering, as long as lenders are giving more than just one agency (unless that is all there is) steering losses much of its sting as long as the required disclosures have been made.

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