Role of Housing Counseling In 2001, HUD and AARP teamed up to begin testing and training approved counselors while establishing consistent HECM counseling policies and procedures. In 2008, the oldest Baby Boomers turning 62 created a record-breaking surge of loans. “We saw an uptick in the wake of the 2008–2009 financial crisis when older Americans were being urged into early retirement, or their investments were underperforming,” says Melinda Opperman, chief external affairs officer with Credit.org in Riverside, CA. As loan originators know, they must provide the names of at least ten HUD-certified HECM counselors before clients can apply for a Federal Housing Administration reverse mortgage. The lender provides a fat packet of documents, including an estimated total annual loan cost and amortization schedule, plus comparisons of different loan options. Then, the client goes off the lender’s radar screen. What happens next? The process is basic but essential. The client chooses a counselor and schedules a session. That session will typically last an hour or two as the counselor and client review the prepared documents together. When the client can demonstrate comprehension by correctly answering five of ten questions from a selection supplied by HUD, the counselor issues a HECM Counseling Certificate. Housing counselors are required to present all options, Cosentini says. The brainstorming approach reviews major factors in the clients’ lives, such as budgets, assets, health and needed repairs to “really get them thinking more about why they need this and what else they could possibly be considering.” As interest rates have risen, demand for housing counseling has slowed, agencies agree. Full-service agencies have the capacity to make up for the slowdown. Rather than risk losing a trained, certified counselor, Reversemortgagehelper.com will assign staff to a busier segment, such as debt consolidation, foreclosure and rental counseling. Cambridge Credit Counseling has kept “super busy” assigning HUD-certified counselors to a housing stability counseling program, funded by a NeighborWorks America grant, to counsel people facing foreclosure or eviction. On the Front Lines Agencies agree. The certification exam that admits candidates to HUD’s HECM Counselor Roster is difficult. HECM origination counselors must also be HUDcertified. Plus, unlike most other professional credential processes, holders not only must take continuing education but also must retake the exam every three years. “HUD has a very high standard when it comes to its exam, which is great because they want a well-rounded counselor,” Cosentini says. “The HECM exam is not easy, and you won’t pass until you fully understand the reverse mortgage. It’s the same with HUD certification. You have to be an expert in all fields and understand it fully. It is a huge benefit for the clients to have such knowledgeable counselors.” Effective counselors are good listeners and communicators. At Credit.org, training and development manager Claudio Espino creates a tailored, interactive conversation. The client’s goal guides the conversation. “Whatever that goal is, we always circle back,” says Espino, the National Foundation for Credit Counseling’s 2017 Counselor of the Year. “We make it fun, but at the same time, we’re confirming. We’re educating the borrowers so they know the decision they’re making is now an educated decision.” Trained counselors tailor the experience to the backgrounds, language abilities and ages of the clients. Counseling can confirm what the customers already know, or it can create that moment when they finally grasp something the lender was trying to explain. “We’re the neutral third party here,” says Mohan Lalwani of Reversemortgagehelper.com, known to loan officers as Mohan. “We’re disinterested as far as whether they get the HECM or don’t get the HECM. According Counselors Cut Confusion continued on page 28 Melinda Opperman Claudio Espino Jennifer Cosentini REVERSE MORTGAGE / MAY–JUNE 2023 27
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