HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
CounselingHECMNewsReverse Mortgage

HUD Dishes More Details on Reverse Mortgage Counseling Rules

One week after publishing its final rule on housing counseling certifications, the Department of Housing and Urban Development (HUD) held a stakeholders call on Monday to discuss the finer points of its new requirements for agency-approved housing counselors, including what the final rule means for reverse mortgage counselors.

Under the final rule, housing counselors will be required to pass a standardized written exam and work for a HUD-approved counseling agency in order to gain certification to provide housing counseling services to consumers.

The actual certification test, which will be administered by HUD’s Office of Housing Counseling, is expected to be published in the spring of 2017.

Counselors seeking HUD certification will then have 36 months from the date after the exam becomes available to comply with this rule, according to various HUD counseling officials during Monday’s call.

This also applies to counselors who provide Home Equity Conversion Mortgage (HECM) counseling, who will be required to undergo specific testing criteria in efforts to gain HUD certification.

“HECM counselors do have to take this test,” said Sarah Gerecke, deputy assistant secretary for housing counseling at HUD. “When the 36 months become effective, HECM counselors will have to pass both the certified housing counseling exam and the HECM exam.”

The rulemaking process first saw a proposed rule published in 2013, followed by a comment period from industry stakeholders, which saw 215 comments submitted to HUD before the agency came through with the final rule last week, according to agency officials.

Commenters addressed the current HECM certification exam, recommending that the Housing Counselor Certification Examination mirror HUD’s HECM certification test.

Other commenters recommended that the new test not be modeled after the original HECM exam, as many counselors found it difficult to pass and certain inconsistencies of the HECM examination resulted in a decrease in the availability of reverse mortgage counseling.

HECM counselors, however, will be required to pass the new certification exam that applicable to all counselors seeking the HUD designation, HUD officials emphasized.

In response to comments about the administration of the HUD HECM exam, HUD said it has taken prior experience with the HECM Roster examination into consideration when developing the Housing Counselor Certification Examination.

There are also certain provisions of HUD’s final rule that take effect January 13, 2017. These include new definitions for certain programs, including homeownership and rental counseling, as well as requirements related to the distribution of materials during theses counseling program.

Also effective January 13 is a rule that prohibits entities from receiving HUD grants if any housing counseling agency (HCA) has been convicted for a violation under Federal law relating to an election for federal office, or if an HCA employs an individual who has been convicted of a Federal election law.

While details of when testing will begin and how many questions the exam will include were not disclosed, HUD said it plans to provide various training opportunities throughout January to prepare counseling stakeholders for the approaching effective date next month.

All counselors seeking HUD certification will be required to demonstrate competency in six topic areas, including financial management; property maintenance; homeownership and tenancy responsibilities; fair housing laws; housing affordability; and avoidance, and responses to, rental and mortgage delinquency as well as avoidance of eviction and mortgage default.

“As we continue to professionalize the field, we’re ensuring counselors get the training they need and the respect they deserve,” said Ed Golding, principal deputy assistant secretary for the Office of Housing at HUD, during Monday’s call. “Making sure everyone has a common base of knowledge to draw from will only improve outcomes and consistency.”

Written by Jason Oliva