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