The Department of Housing and Urban Development (HUD) released Mortgagee Letter 2011-09 to update guidance of the counseling documentation and fee requirements, including provisions that allow for increased counseling fees.
In regard to fees, the letter clarifies documentation and record keeping requirements for agencies that charge fees, including waiver requirements for certain low income clients. Counseling agencies are required to waive a counseling fee when they have sufficient documentation to demonstrate the client's income is below 200% of the Federal Poverty Level. Such documentation must be in the form of Social Security payment stubs, income tax returns for prior year, or other form of income verification. The letter also provides support for allowing counseling agencies to charge more than $125 that was considered customary in ML 2008-12.
Noting that counseling costs have likely increased since that previous guidance, HUD is allowing agencies to raise counseling fees provided that the fee:
- is reasonable and customary
- does not exceed a level commensurate with counseling services provided
- is not being charged for a service already funded by grant funds or other HECM or delinquency counseling funds received.
The allowance for increased fees will take affect, along with the rest of the letter, on March 4.
In terms of the amount of time providing counseling services noted on the Certificate of HECM Counseling (Form HUD 92902), counselors are advised to only record that actual time spent meeting with clients, not included information intake time or other preparation time.