Federal housing leaders talk about need for more reverse mortgage concept – HousingWire
(FHA) Commissioner and (HUD) Office of Housing Counsel Deputy Secretary David Berenbaum described the need for more understanding of reverse mortgages during an interview at this year's (NRMLA) Annual Meeting and Expo in San Diego.
As the interest rate environment, existing Home Equity Conversion Mortgage () borrowers are more likely to seek refinancing. Counseling plays an important role in informing reverse mortgage borrowers and their trusted advisors of the program's features, obligations and financial benefits.
As the refi capacity increases, so do the advisory needs
Gordon recently said more HUD-approved housing units should be trained to work with HECM borrowers, especially because of the changing rate environment. During an online housing conference hosted by HUD in September. When asked to expand on his thoughts, he offered perspective on how important counseling plays in the HECM program.
“I consider the reverse mortgage counseling requirement an integral part of the program, without which I would not be comfortable with this program,” he said. “It's so complicated that even experienced mortgage professionals who work don't necessarily understand the product.”
Understanding the details of the program is extremely important for all parties affected by the transaction. This is especially true for borrowers who choose to take out a loan and the people they trust most to advise them in their business.
“It is important for potential borrowers and consumers to really understand the features of this program before taking out a loan,” he said. “And I think that's just as important when you're getting an original reverse mortgage as it is with a refinance, because the requirements aren't quite the same.”
A small group of borrowers who meet certain criteria may not have to get counseling, Gordon said, but he hopes they choose to go through a session anyway. But he also feels that those who don't have to get counseling today should have it in the future.
“I hope they get counselling, and I think it's important to look at whether they're required to get counselling,” he said. “But even for unsolicited borrowers, I believe it's appropriate.”
Housing Advice Preparation Office
Berenbaum said the Office of Housing Counseling has developed a series of information brochures for the housing counseling community designed for use by consumers. That said, patience may be key when it comes to interest rates, as they could fall further.
“At least, that's what many prognosticators are saying out there right now,” Berenbaum said. “But there are many real issues that need to be discussed, especially with seniors, including the age of the homeowner, their immediate and long-term needs in the home, and family issues. certain costs and fees associated with the refinancing.”
But he added that the potential savings from a renovation should also be determined before moving forward, as those savings may be less than a given homeowner estimates.
“It's good to have a trusted advisor,” he said. “I am hopeful. Among the topics at this meeting, NRMLA is interested in discussing the availability of advice, stronger best practices, and possibly a stronger standard. I always welcome strong host education in any choice made.
