FREE REVERSE MORTGAGE COUNSELING IS AVAILABLE! (but our bureaucratic government regulators won’t allow me to tell you where!)
Free reverse mortgage counseling is available however somewhere at the crossroads between dumb and dumber lies a government bureaucrat that has decided that we’re not allowed to tell you where. These regulators are writing more and more rules, regulations and restrictions…maybe seeking job security or perhaps…intentionally trying to ruin our great nation by drowning us in unnecessary obstacles.
Welcome to my life. I’m here to do the right thing…to educate and guide seniors seeking a reverse mortgage. I understand that not everyone chooses my same ethical path…yes there are always unscrupulous individuals trying to take advantage of people…and seniors are often the targets. So our government mandates that seniors seeking reverse mortgages attend a counseling session with a government approved independent third-party counselor.
However that wasn’t good enough. Some government rule-maker thought it would be bad if the mortgage company “suggested”, “recommended”, “steered” or “directed” the borrower to a specific counselor. I guess the government doesn’t trust their own approved counselors…so they created “anti-steering” rules set forth in HUD Handbook 7610.1 and Mortgagee Letter 2010-37. These materials specifically state: “The lender may not steer, direct, recommend or otherwise encourage a client to seek the services of any one particular counselor or counseling agency. Lenders are required to give every client a list of HECM counseling providers that includes the national intermediaries providing telephone counseling and five agencies in the local area and/or state of the client with at least one of the local agencies located within a reasonable driving distance for face-to-face counseling.”
Telling a borrower any specifics about a certain agent that “may influence” their counseling selection is considered by HUD to be steering. For example, verbal or written direction informing a borrower of any of the following is prohibited:
- Which agency will allow certain payment types, such as at closing versus upfront payment
- Which agency provides the fastest turn times or weekend scheduling
- Which agency provides counseling in a certain language
And yes…we are also not allowed to tell a borrower which agencies provide counseling at no cost…potentially saving our borrower $125.00.
So you tell me…unintended consequence or just plain stupid?