Are Reverse Mortgage Counselors Under-Qualified?by Tim Manni
A relatively recent test may make it appear that way, yet we’re not so sure that’s the case.
All reverse mortgage counselors are required by HUD to pass a licensing test that is proving extremely difficult, even for many seasoned veterans:
“The test is intentionally difficult, but we believe it needs to be so because of the vulnerable population” who seek out reverse mortgages, a HUD spokesman told the Post and Courier. HUD made the licensing exam more difficult after numerous complaints that people who were providing counseling about reverse loans were not always well-informed.
Yet, has the test proved to be counter-productive?
Debbie Kidd, head of the Homeowner Resource Center at Family Services Inc. in North Charleston, S.C., who failed the test four times, told the Post and Courier, “It’s humiliating for me. I’ve done this for 20 years. … Why can’t we pass this test?”
Because so many people are having a tough time passing the test, some areas are being left without counselors approved to discuss reverse home mortgages. Depending upon where you live it may be necessary to travel out of the local area to receive counseling face-to-face. Reverse mortgage loan counseling also can be done by phone.
Can’t Have One without the Other
Any borrower who is seeking a reverse mortgage must first receive counseling. At the same time, counselors themselves are held to a strict set of standards that they must first meet in order to serve clients:
Successfully pass a standardized HECM exam administered by HUD. Complete training related to HECMs within the previous two years. Have access to technology that allows HUD to track the results of counseling to clients. Retake the HECM exam every three years.
The fear among some is that these new restrictions will continue to leave many borrowers underserved.
Get to Know Reverse Mortgages
The Office of the Comptroller of the Currency (OCC) recently issued a Consumer Advisory titled “Reverse Mortgages: Are They for You?” The advisory is designed to educate older homeowners on the ins and outs of reverse mortgages and their possible alternatives.
The advisory offers basic facts borrowers should know, the costs and benefits associated with the loan product, as well as some important rules to consider when opting for a reverse mortgage.
To learn more: read this HSH.com blog post.
READERS: Please share your reverse mortgage experiences — leave us a comment!