NRMLA Targets Reverse Mortgage Counselor Exemption from New Rules

Industry trade group the National Reverse Mortgage Lenders Association is seeking an exemption for HECM counselors from new examination requirements under the Dodd-Frank Act. 

On Dec. 12, NRMLA submitted comments to the Department of Housing and Urban Development requesting that reverse mortgage counselors be excluded from new rules meant to assess housing counselors’ competency at informing consumers about the homeownership process. 

Organizations that provide counseling and individuals who provide counseling through those organizations are required to get this certification from HUD in order to provide those services, under the Dodd-Frank Act. 

While HUD has already exempted reverse mortgages from its definition of homeownership counseling in a September proposed rule, it did not issue a corresponding exemption in the portion of the proposal defining the areas of knowledge for which a counselor must be examined, says NRMLA. 

Areas where counselors are required to be competent include financial management, property maintenance, responsibilities of homeownership and tenancy, fair housing laws and requirements, housing affordability, and avoidance of and responses to rental and mortgage delinquency and avoidance of eviction and mortgage default. 

“We are concerned that the certification process, as proposed, will require HECM counselors to pass certification exams that are focused on the entire process of homeownership, all of which may not be relevant to the current FHA HECM counseling protocols,” NRMLA said in its comments to HUD. 

The trade group suggested to HUD that HECM counselors should exhibit an understanding of reverse mortgage-specific issues, including occupancy requirements, borrower obligations, non-borrower spouse implications, and financial assessment and other product revisions. 

Written by Alyssa Gerace 

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