Counseling

According to FHA Mortgagee Letter 2006-25 all borrowers are required to receive counseling from a HUD approved third party counseling agency. Processing begins only after the borrower submits to you a signed and dated counseling certificate. Preliminary title commitment and an AVM may be ordered prior to counseling, as outlined in
Mortgagee Letter ML #2006-25. If the borrower does not proceed with closing on the reverse mortgage, the borrower may not be charged for the above pre-ordered services.

Mortgagee Letter 2008-28 says that Lenders can no longer pay HUD-approved counseling agencies, directly or indirectly, for counseling services through either a lump-sum payment or on a case-by-case basis. An example of prohibited indirect funding is Lenders funneling payment for HECM counseling through a nonprofit foundation, association or any other entity or organization that is a branch of, affiliated with or associated with a lending institution.

It is our policy to require non-borrowing spouses to attend counseling as well as sign the Non-Borrowing Spouse/Resident disclosure for all products. If this presents a hardship to the borrower, please submit a letter of explanation with the file.

At the present time we urge all counseling to be face to face, but it is only mandated in North Carolina. Sources of counseling are:
AARP - 1-800-209-8085
NFCC - 1-866-698-6322
MMI - 1-877-908-2227
and the websites listed below:
http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
http://www.hecmresources.org/states/reque_state_index.cfm

If the property is in Massachusetts you must use one of the counselors on the list found on this website: http://www.mass.gov/Eelders/docs/list_rev_mort_couns.pdf

If the property is in NC the counseling must be face to face.