Reverse Mortgage Counseling no longer subsidized by HUD

In one of the of the more unfortunate turn of events in the recent history of the Reverse Mortgage, HUD (Department of Housing and Urban Development) has decided to withdraw is subsidies of Reverse Mortgage Counseling for Senior Citizens looking to obtain a Reverse Mortgage.  This mandatory service for every Reverse Mortgage applicant will unfortunately result in higher costs for future borrowers in a time where every dollar is more important than ever.  There are still some affordable options however, and you might even still be able to find HECM Counseling free of charge.

Counseling is a protection created by the HUD and the FHA.  This is a mandatory meeting with a HUD Counselor, usually a private credit counseling organization, which will provide you with a HUD Counseling Certificate.  This meeting is around 30 to 45 minutes and can be done over the phone, although there are usually several local options to have your interview face to face.

These counselors were designed to ensure that all Reverse Mortgage applicants are aware of how this unusual product works.  Seniors will have all of their questions answered, and that the lender they are working with is certified and acting in their client’s best interests.  The problem with the changes in counseling situation has become the cost involved.

Before 2010, counseling was fully subsidized by the HUD and free of charge, which made perfect sense due to it being a mandatory part of the process.  However, HUD has been gradually reducing their fiscal involvement in these agencies, to point where they have removed the cap on what can be charged and their help in reducing these costs for seniors.  Before the changes last month, there was a maximum of $125 that any single agency could charge for the service.  However, now with removal of HUD funding for these agencies, the price of the session could go up.

It is an ugly turn of events that has made the prospect of obtaining a Reverse Mortgage even more difficult.  There are however, still some agencies that offer this service free of charge.  For a list of these counselors, and for a list of all of the agencies in your area to begin the Reverse Mortgage Process, go to Reverse Mortgage Nation or contact Troy Shellhammer at 888-973-8377.

 

 

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