by Peter G. Miller
March 26th, 2008
A new association for reverse mortgage counseling agencies has been formed to “support education initiatives and provide resources to improve the operational efficiency, consistency and financial sustainability of reverse mortgage counseling programs nationwide.”
While I am certain that operational efficiency, consistency and financial sustainability are important, I am vastly more concerned with a more prosaic issue: Can I confidently go to a mortgage counselor and know without question that such an individual is concerned with my best interests?
There is no way this is possible if a counselor is paid by a lender. And yet, HUD says that “funding for housing counseling is a major concern among participating agencies. In a change in this final rule, HUD is clarifying that it will allow for participating agencies to accept funding from lenders, as long as the relationship does not create a conflict of interest and that the relationship is disclosed to the client.”
How is it possible to both fund a counselor and have a counselor without an implicit conflict?
Hopefully by “financial sustainability” the new organization will fight for reverse mortgage borrowers — and a reversal of HUD’s unwise policy.
The release regarding the newly-formed National Housing Counseling Association is below:
Reverse Mortgage Counseling Industry Leaders Announce Launch of National Housing Counseling Association
WASHINGTON–(BUSINESS WIRE)–A coalition of reverse mortgage counseling agencies and elder care experts announced today a collaboration to launch the National Housing Counseling Association (NHCA).
NHCA will act as an independent organization to support HUD-approved 501(c)(3) housing counseling agencies in the delivery of reverse mortgage counseling services. Its principle goal is to support education initiatives and provide resources to improve the operational efficiency, consistency and financial sustainability of reverse mortgage counseling programs nationwide.
The association will build on existing best practices in the reverse mortgage counseling industry and will offer membership to all HUD-approved housing counseling agencies that provide reverse mortgage counseling and are prepared to meet HUD Home Equity Conversion Mortgage (HECM) counseling network standards and abide by the NHCA code of ethics.
“The association was created to ensure the availability and quality of reverse mortgage counseling for seniors,” said Chuck Stanley, NHCA spokesperson. “With the near exhaustion of available HUD funds for HECM counseling, and the delay in HUD’s borrower pay regulation, many counseling agencies are being forced to cut back on counseling services. NHCA has developed an industry-wide approach to accessing additional grant funds without the perceived conflict of interest associated with direct contributions by individual reverse mortgage lenders. We believe this approach will be a win-win for all reverse mortgage counseling agencies, their clients and the reverse mortgage industry as a whole.”
Participating agencies will have the benefit of accessing industry-leading “DirectConnect Reverse Mortgage Counseling Services™” software, which will be used to gather counseling session data for use in grant reimbursement and research purposes.
Jay Greenberg, executive vice president of the National Council on Aging (NCOA), added, “We are excited to assist the NHCA in increasing financial transparency and maximizing the value of the counseling and education experience for seniors.”
NHCA is currently endorsed by many HUD-approved counseling agencies, and agencies from each of the credit counseling trade organizations, American Association of Debt Management Organizations, Association of Independent Consumer Credit Counseling Agencies, and the National Foundation for Credit Counseling. These participating agencies are responsible for providing more than 80 percent of reverse mortgage counseling sessions done today: By Design Financial Solutions, Consumer Credit Counseling Service of Forsyth County, Consumer Credit Counseling Service of San Francisco, National Foundation for Debt Management, Lutheran Social Services of Duluth, Springboard and Money Management International (and its 120 CCCS branch offices throughout the country).
About National Housing Counseling Association
NHCA pledges help and support the delivery of high quality counseling to seniors, ensure the delivery of consistent, reliable counseling services meeting the business needs of lenders, and develop a sustainable source of revenue for counseling agencies to offset the cost of providing this much needed service. To learn more, or join the association, contact NHCA at email@example.com.