Because steering is strictly prohibited in the Home Equity Conversion Mortgage world, there is little opportunity for counselors and originators to communicate. But during a panel discussion at the National Reverse Mortgage Lenders Association conference last month, reverse mortgage counselors offered their insights on current trends they are seeing via counseling sessions.
Counselors on the panel agreed that there has been a growing number of clients being counseled on HECM for purchase and HECM-to-HECM refinance transactions, as well as proprietary reverse mortgages.
Melinda Opperman, executive vice president for Springboard Nonprofit, which operates Credit.org, said she’s personally noticed more borrowers coming in for counseling on reverse mortgage for purchase transactions.
“That’s been a recent trend, and also we’re seeing a lot of reverse mortgage counseling for the refinance of an existing reverse mortgage,” she said. “Also we’re seeing an increase in counseling for proprietary reverse mortgages.”
Jennifer Cosentini, housing director for Cambridge Credit Counseling in Massachusetts, said that new interest in private reverse mortgage products has grown significantly for her agency.
“The biggest trend we’ve seen has definitely been the proprietary reverse mortgage,” she said. “We went from doing about 17 counseling sessions a month for proprietary to just this month, 80.”
Another shift, counselors noted, is that while most borrowers are coming to counseling after first seeing a loan originator, some borrowers are seeking counseling after being prompted by a financial planner. Cosentini said she has seen an increase in the last two or three years among financial planners contacting her office to ask questions and then encouraging their client to seek counseling.
“It’s a small percentage, but it’s definitely been growing the last few years,” said Cosentini.
In order to best manage expectations, counselors suggest that borrowers would benefit from knowing how long the counseling session will take.
“You need to let them know it’s going to take about 60 to 90 minutes, and it can’t be rushed,” Opperman said.
Opperman said counseling often runs more smoothly when adult children are included in the counseling sessions, making sure that everyone is aware the borrowers’ plans. Cosentini agreed and said this can be an important detail for a loan originator to share pre-counseling.
“Bring in the family members and get them all prepared beforehand so they know what to expect — and hopefully it will run a little smoother,” she said.
Written by Maggie Callahan