An article by former Seattle Times real estate editor Tom Kelly suggests that lender funding is the solution to the recent housing counseling cuts felt by reverse mortgage counseling agencies nationwide.
With recent funding slashed from the national budget, the article says, counseling fees will be charged directly to seniors. The National Reverse Mortgage Lenders Association as well as Department of Housing and Urban Development Secretary Shaun Donovan have made statements to the same effect: the lack of funding will ultimately lead to seniors facing a greater expense in the counseling process for HECM loans.
The article points to conflict of interest concerns that prevent lenders from contributing to the counseling pool of funds. But, the author argues, “Why not permit lenders who handle reverse mortgages to pitch in, especially in this time of need? They all have continuing education budgets earmarked for consumers. Let them bridge the gap in the counseling funding shortfall until another pot of cash can be found.”
Because reverse mortgage counseling is mandatory, the problem may require a solution that involves lenders, the article asserts.
“Many seniors are poor, don’t have the cash to fund the pre-lender sessions, and yet desperately need to pull cash out of their homes to survive,” it says. “HUD funding is gone. Let the private lenders help.”
Read the Spokesman-Review article.
Written by Elizabeth Ecker