The Department of Housing and Urban Development provided additional guidance on lenders distributing the required list of HECM counselors to reverse mortgage borrowers.
As required by HUD guidelines, lenders must provide a list of HECM counselors that includes the four national counseling intermediaries – Money Management International, CredAbility, National Council on Aging and National Foundation for Credit Counseling – plus a list of at least five approved HECM counseling agencies within the local area or state of the prospective borrower.
If the client is located in a state where there are not five approved counseling agencies, the lender should provide HECM counselors in the “next again” state.
“It is understood that the “next again” State may not be contiguous to the prospective borrower’s State, in some instances,” HUD told the National Reverse Mortgage Lenders Association’s Monday Report. “Approved HECM counselors should be provided in a contiguous State whenever possible. These approved HECM counselors, as provided to the prospective borrower, would then be entered into FHA connection on the HECM Referral Screen.”
For more information on the guidelines, see Mortgagee Letter 2010-37.
