Below are some frequently asked questions and answers about reverse mortgage counseling. In addition to these FAQ’s, we have questions and answers focusing on other reverse mortgage topics:

Reverse Mortgage Basics

Reverse Mortgages and Taxes

Reverse Mortgage Rates and Fees

Questions From Visitors

If you have questions about reverse mortgages not included here, you can use the form at the bottom to submit it! We’ll do our best to get you a prompt and accurate reply.

1. What is the purpose of the required counseling during the reverse mortgage process?
2. Who must receive counseling?
3. How do I find a reverse mortgage counselor?
4. What qualifications should I look for in a reverse mortgage counselor?
5. Can I meet the requirement for reverse mortgage counseling by speaking to a reverse mortgage counselor on the phone?
6. Is there a cost for reverse mortgage counseling?
7. My mother had a stroke and later took out a reverse mortgage. Her mortgage payment was only $400 at the time.
   Can I call off the loan based on my mothers dimenished capacity. The reverse mortgage counseling was done with a person with dimenished capacity.
   The family did not know of the loan and the Mortgage company went ahead with it leaving my two disabled brothers without a home. The family can ill afford to pay off loan….what is my recourse being the eldest in the family without a will or power of attorney….
8. My husband is 69 years old but I am only 56 how will this effect a reverse mortgage ?

Reverse Mortgage Counseling Questions and Answers

1. What is the purpose of the required counseling during the reverse mortgage process?

   The purpose of counseling is to assure that borrowers fully understand the complex details of reverse mortgages, the consequences of taking one out, and the other options that might be available to them. This is a federally required feature of the reverse mortgage process and is designed for your protection. The counselor, who is from an independent government-approved housing counseling agency, explains in detail the pro’s and con’s of all your reverse mortgage alternatives. He or she will discuss a reverse mortgage’s costs and financial implications, should tell you about any government or nonprofit programs for which you may qualify, and advise you on any proprietary reverse mortgages that may be available in your area. At the end of the counseling session you will receive a Certificate of Borrower Counseling which you will need to present to the lender.

2. Who must receive counseling?

   Every owner shown on the title to the property is required to receive counseling. Generally, this will be the husband and wife owners of the home. In power of attorney (POA) situations, it is generally necessary for both the homeowner and the person designated POA to attend counseling. Other family members or advisors may also attend the counseling session at the homeowners invitation.

3. How do I find a reverse mortgage counselor?

   The easiest way to find a counselor is on the internet. You can find a state-by-state directory of counselors using this link. You can also call the US Department of Housing and U&rban Development (HUD) at 800-569-4287 for information on counselors in your area. Finally, you can contact a reverse mortgage lender in your area and ask them about recommended counselors. They can give you a list of five counselors but cannot “steer” you to a particular counselor.

4. What qualifications should I look for in a reverse mortgage counselor?

   You should always look for a counselor who is HUD approved. HUD funds housing counseling agencies throughout the country who can give you advice on reverse mortgages. You can also look for a counselor who is certified through AARP. These counselors, in addition to being HUD-approved, have scored very highly on a specialized reverse mortgage exam administered by AARP. Do not hesitate to ask the counseling agency you call about the qualifications of their staff.

5. Can I meet the requirement for reverse mortgage counseling by speaking to a reverse mortgage counselor on the phone?

   Counseling may be done over the phone, but it is highly recommended that it be done in a face-to-face meeting. Telephone counseling is intended for situations where it is not possible to meet in person due to travel distance or health concerns. Reverse mortgages are complex and counseling should never be taken lightly. Meeting face-to-face with a counselor provides added assurance that you fully understand the options and risks. Also, “phone counseling” has been at the core of some unfortunate fraud cases involving reverse mortgages.

6. Is there a cost for reverse mortgage counseling?

   Generally, counseling is available free of charge. Some counselors may have a nominal fee (under $100) to help defray costs. Be wary of anyone who offers reverse mortgage counseling services for a significant fee or for a percentage of the loan proceeds.

7. My mother had a stroke and later took out a reverse mortgage. Her mortgage payment was only $400 at the time.
   Can I call off the loan based on my mothers dimenished capacity. The reverse mortgage counseling was done with a person with dimenished capacity.
   The family did not know of the loan and the Mortgage company went ahead with it leaving my two disabled brothers without a home. The family can ill afford to pay off loan….what is my recourse being the eldest in the family without a will or power of attorney….

   That is a concern and should be taken up with the lender but you haven’t provided all the details. Part of the counseling is to ensure that the borrower is not of diminished capacity along with making sure that no one is being coerced and that the borrower understands the reverse mortgage requirements along with other options such as downsizing or getting state assistance if available. Is your mother still alive and living in the home? Assuming your brothers are not 62 or older. Even though the mortgage payment was $400 at the time, that doesn’t sound like a situation that would cause a reverse mortgage to reach a point that no other equity is left so we would need some more details into this and can help you more.

8. My husband is 69 years old but I am only 56 how will this effect a reverse mortgage ?

   Both persons on title will have be at least 62 years old. Some circumstances have allowed for a younger person to come off title if older person has life insurance policy that could pay off reverse mortgage balance to allow younger person to remain in the home. Consult an elder law attorney for that information but it is not a normal procedure.

Since Reverse Mortgage Information started, we have maintained state-by-state directories for both reverse mortgage lenders and reverse mortgage counselors. The directories have been kept on static web pages meaning that anytime a lender or counselor wished to be added or wished to change their listing, they would have to go through the cumbersome process of sending us an e-mail and wait for staff to manually make the change. Also, it with this format it was not possible for users to search listings by company name, location, etc.

We recently moved the directory listings to a new searchable platform that allows users to add or modify their own content. In addition, the new platform makes available a wide range of new features to enhance listings:

At this point, we have moved the information from the old directories to the new platform. If you wish to enhance or modify your listing, you will need to determine which type of listing best meets your needs and complete a simple registration to receive a login password.

We hope this new directory platform better serves our visitors as well as the listed organizations. Here’s a general sample of what a directory listing might look like:

As reported by Reverse Mortgage Daily, HUD recently issued Mortgagee Letter 2007-08 basically eliminating the requirement for potential borrowers to have a face-to-face counseling session prior to getting a HECM reverse mortgage:

FHA will now allow prospective HECM borrowers the option to meet face-to-face with the lender and/or HECM counselor or to participate in loan origination and counseling activities by telephone….Prior to this change, HUD HECM loan origination procedures, (required) that prospective HECM borrowers must make every effort to meet face-to-face with either a housing counseling agency approved to provide HECM counseling or a mortgage lender approved to originate HECM loans.

In the letter, HUD states its policy change was motivated by the fact that face-to-face counseling can be “a hardship for some prospective HECM borrowers, particularly those living in rural areas or with limited mobility.” We suspect, too, that the surge in HECM applications in the last several months has overwhelmed available counseling resources in many parts of the country.

We fear that many potential borrowers will choose to forgo a face-to-face meeting not because its truly a “hardship” but, rather, because it’s a “hassle”. Its possible that some busy counselors and/or lenders might not protest too strongly if a borrower chooses to go this route. But we think borrowers would be wise to insist on a face to face meetings with both counselor and lender, whenever physically possible.

Reverse mortgages have always been tricky to understand and counterintuitive to the way people think. In recent months the confusion and complexity has multiplied. The HECM variations alone (HECM 150, HECM 125, HECM 100, fixed or variable rate, monthly or annual, etc.) have grown exponentially and are just too confusing to be adequately understood by getting a bundle of papers in the mail and reviewing them over the phone. Add to this the vast number of non-HECM options, and it’s not hard to see the potential for information overload leading to hasty, imprudent decisions.

Be aware that the HUD letter also includes this important statement:

All HECM lenders and counselors should have the capacity to conduct face-to-face interviews with all prospective HECM borrowers and must routinely offer to conduct face to-face loan applications or counseling respectively (emphasis added).

As a borrower, consider it your right to have face-to-face meetings with counselors and/or lenders and do not take this right lightly or squander it in the name of expediency.

The [tag]U.S. Department of Housing and Urban Development[/tag] ([tag]HUD[/tag]) - overseer of the popular HECM reverse mortgage program - recently released a new [tag]Mortgagee Letter[/tag] aimed at clarifying Home Equity Conversion Mortgage (HECM) counseling requirements.

In the letter (2006-25), HUD references some recently publicized cases of reverse [tag]mortgage fraud[/tag] and makes it clear it expects HECM counselors to take an active role in educating consumers about how to avoid [tag]reverse mortgage fraud[/tag] schemes.

Preventing Mortgage Fraud Against HECM Borrowers

It has come to HUDs attention that HECM borrowers are increasingly becoming targets of mortgage fraud scams. HUD has learned of a recent fraud scheme involving loan officers originating HECMs and arranging to keep the HECM borrowers loan proceeds. In one case the loan officer arranges for the title company to pay the loan proceeds through two checks. One check is sent to the senior and the other is kept by the loan officer. In another case loan officers are convincing seniors that a standard procedure in the HECM origination process is to sign over the loan proceeds to the loan officer for future disbursement to the HECM borrower. In these cases the loan officer may make a few payments but then keeps the balance of the funds. In an effort to warn HECM borrowers of these potential fraud schemes, HUD advises HECM counselors to discuss the potential of mortgage fraud with their clients. Counselors are to explain the standard ways in which HECM borrowers can access their loan proceeds. Counselors should warn clients against signing over their funds to loan officers or other parties involved in the mortgage transaction. While this type of fraud does not happen in the majority of HECM transactions, HUD believes it is important to educate prospective HECM borrowers about how to avoid becoming victims of fraud schemes (emphasis added).

We’ve previously written about some of the reverse mortgage fraud cases HUD references in Mortgagee Letter 2006-25 and recommend that borrowers educate themselves about these cases and the techniques being used by reverse mortgage scam artists.

If you've determined that a reverse mortgage may be right for you, the next step is to find an approved reverse mortage counselor. Generally, you will need to call, complete a brief counseling application, and schedule an appointment - either in person or by phone. Counseling is required for reverse mortgage applicants, but there is no charge for the service. To find a HUD-approved Home Equity Conversion Mortgage Counselor in your area, click on your state: