Reverse Mortgage “Pre” Counseling Serves Some, Not All

With reverse mortgage counseling times on the rise, and recent funding woes that left counseling agencies without federal funding for a period of time in 2011-2012, some have looked into pre-counseling solutions in an effort to make the most of the time counselors do spend with borrowers. 

From online sessions to conference calls where preliminary information is shared with a group of potential borrowers at one time, the reaction to “pre-counseling” has been somewhat mixed, though one counseling agency says it is a big time saver. 

For CredAbility, the feedback has been entirely positive, says Alan Stacy a reverse mortgage counselor. Borrowers can access pre-counseling materials through an online portal, and can go at their own pace. It makes for more quality time during the actual counseling session that follows, he says.

“It frees up a lot more telephone time for me to talk about the reverse mortgage.”

CredAbility is seeing roughly 10% of its borrowers go through the pre-counseling, after rolling it out in mid-2010. It’s popularity has grown steadily.

“It allows our clients who are computer savvy or who have adult children who are, to go on the website and learn more. It covers everything HUD requires and allows them to develop loan projections so when I follow up with the phone counseling, they’ll have those numbers in front of them,” Stacy says.

Money Management International launched an education program in September as a precursor to reverse mortgage counseling, with the goal of making the counseling process simpler. For MMI counseling clients, they can receive the pre-counseling via online or a conference call.  

Some borrowers have reported they are not happy with an additional step in the process.

One originator told RMD that the pre-counseling phone call caused frustration.

“[My client] called [a counseling agency] for a telephone counseling appointment and were informed that they counseling would be a two-stage process,” one originator told RMD. “…that really put these borrowers off.”

But optional pre-counseling has saved hours, even days, Stacy says. 

“The HUD required pre-counseling packet can be downloaded instead of having it mailed,” he says, for example. “It gets there so much faster and sooner. It allows clients to pick a date and time that fits. There’s more quality time then to discuss concerns they might have.” 

Written by Elizabeth Ecker

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