Some good news for seniors seeking or considering taking out a reverse mortgage. The National Reverse Mortgage Lenders Association (NRMLA) issued a press release indicating that HUD is beefing-up the network of qualified reverse mortgage counselors.

November 10, 2005

Contact:
Peter Bell, President, NRMLA
202-939-1741

Darryl Hicks, Associate Director, NRMLA
202-939-1784

Washington, DC – In response to rapid growth in the number of seniors applying for reverse mortgages, the U.S. Department of Housing and Urban Development issued a notice last week expanding the network of counselors authorized to provide mandatory face-to-face and/or telephone counseling nationally.

Before a reverse mortgage application can be processed, a prospective borrower must first meet with an independent counselor. Both HUD and AARP oversee a network of counselors whose job it is to review reverse mortgage transactions with every prospective borrower, answer any questions the borrower may have about reverse mortgages and provide information on alternative options.

“Put simply, there weren’t enough trained individuals to handle the high volume of counseling requests,” said Peter Bell, President of the National Reverse Mortgage Lenders Association. In some parts of the country, eligible borrowers are waiting 4-6 weeks, or longer, to schedule counseling sessions.

To help reduce the backlog, HUD is allowing counselors from the National Foundation of Credit Counselors (NFCC) and Money Management International (MMI) to provide face-to-face and telephone counseling. NFCC and MMI hope to add up to 250 trained counselors to the network over the next several months.

HUD has published the following toll-free phone numbers for consumers to access a reverse mortgage counselor: National Foundation of Credit Counselors (866-698-6322);

Money Management International (877-908-2227); AARP (800-209-8085).

For a fifth consecutive year, lenders originated a record number of federally insured reverse mortgages, and the volume of borrower applications being processed is even higher, according to NRMLA. During the most recent federal fiscal year, ending September 30, the Federal Housing Administration (an arm of the Department of Housing and Urban Development), insured 43,131 Home Equity Conversion Mortgages (HECMs) compared to 37,829 the prior year. HECMs account for over 80 percent of all reverse mortgages made in the U.S.

A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their home, without having to sell the home, give up title, or take on new monthly mortgage payments. Loan proceeds can be used for any purpose, and taken out as a lump sum, fixed monthly payments, line of credit, or a combination. The loan amount depends on the borrower’s age, current interest rates, and the value and location of the home.

A reverse mortgage does not have to be repaid until the borrower moves out of the home permanently, and the repayment amount cannot exceed the value of the home. After the loan is repaid, any remaining equity is distributed to the borrower or the borrower’s estate. A senior’s home does not have to be owned free and clear to qualify for a reverse mortgage.

NRMLA distributes a free information booklet on reverse mortgages, called Just the FAQs: Answers to Common Questions About Reverse Mortgages. Consumers can order it by telephone (1-866-264-4466, toll-free) or at NRMLA’s Web site, http://www.reversemortgage.org.

The Web site has extensive information on reverse mortgages, a state-by-state list of lenders, and a reverse mortgage calculator. To be listed on the NRMLA website, a lender must agree to abide by the Association’s Code of Conduct and operate in accordance with its Best Practices.

NRMLA is a nonprofit trade association, based in Washington, DC, whose members make and service reverse mortgages throughout the U.S. and Canada. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors.

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A Few More Related Articles of Interest:

HUD Announces Additional Funding for HECM Counseling

FAQ: Reverse Mortgage Counseling

Reverse mortgage counseling backups

HUD Moves to Improve HECM Counseling

Borrowers Should Consider Face to Face HECM Counseling Their Right