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HUD Adds Intermediaries to the Counseling List

The Department of Housing and Urban Development (HUD) has added three intermediaries to the list of counseling agencies required to be provided to prospective borrowers.

Mortgagee Letter 2011-26 (ML 11-26) lenders are required to included HUD-approved intermediaries that are awarded HECM counseling grant funds by HUD. This list is updated each year, typically in January. HUD noted that updates could be added at other times, as well, as awards are given. It is the lenders responsibility to ensure they update the current contact information for intermediaries and agencies.

With the inclusion of the three new intermediaries to the existing list of four, lenders must include seven intermediaries to prospective borrowers. This is in addition to the requirement for five local agencies, including one within reasonable driving distance to the borrower for the purpose of providing face-to-face counseling.

The three new intermediaries to be included are:

  • ClearPoint Financial Solutions
  • Neighborhood Reinvestment Corporation
  • Springboard

The mortgagee letter notes an effective date of May 1, 2011. FHA connection now includes a new field, "Referral Date," that will require lenders to enter the date that the client received the list of counseling agencies. If the date entered is prior to May 1, 2011, the intermediaries will include the 4 previously required. If the date is May or after, the letter states the list must include the 7 noted in the guidance.

The letter also states that the new requirement is effective as of the release of the mortgagee letter. It is unclear whether this release includes inaccurate dates or is being retroactively applied. The guidance does state that in future years, lenders will be given 30 days to update information and provide clients the most current list of agencies.

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