For every reverse mortgage that is originated, counseling is required by the U.S. Department of Housing and Urban Development (HUD). The counseling is designed to give you a basic understanding of the process, and to make sure you’re not being taken advantage of as a senior citizen. The decision to do a reverse mortgage may well be the last major financial decision you will ever make, so it’s very important that you move slowly. Make sure you’re comfortable with your loan officer, and most importantly ask questions that are important to you.
In my efforts to make the reverse-mortgage counseling process efficient, consider following the process I have outlined below.
Find the folder that contains your information from the last time you closed on a mortgage. You’ll probably find the information in your title insurance or old mortgage papers. Make a note of how your names appear on your tile. You may need to contact your counselor and request they add or remove various initials, etc.
Contact one of the approved counselors from the list provided to you in the “proposal package.” In most cases the counseling session is done using an 800 number. There is currently one person in Santa Fe you may sit with in person. The proposal package gives you the requisite information to attend reverse counseling. Be sure they have your name as it appears on the title to your home. Also, be sure they have your complete physical and mailing address. If your home is in a trust, or if you want a non-borrowing spouse or other party on title that is not a spouse, let the counselor know.
Let the counseling agency know that you have a copy of the HUD booklet “Use Your Home to Stay at Home”, and that you’ve read it. Also, let them know you have a copy of “Preparing for Your Counseling Session.” You will have copies of the comparison sheet of different types of reverse mortgages, an amortization schedule, and the total cost analysis.
The counselor may go to www.CounselingDocs.org and enter the counseling code provided to you. This will allow the counselor to use the figures from your loan officer’s financial analysis. Otherwise you will be using general financial information that is not specific to you, which is fine. The counseling call will take approximately 45 minutes and the cost will be approximately $150.
After the counseling session is completed, have the counselor either email or fax the certificate to your reverse mortgage loan officer. Confirm that the counselor will email the original certificate to you. Once you get the original, give the original to your loan officer, so they may in turn provide it to FHA after closing. Call your loan officer and let them know the certificate is on its way to them.
For many people considering retirement, a reverse mortgage may be a wonderful tool to supplement your plans. Call me and let’s talk over your specific situation.
Dirk Gray (505-429-3285, email@example.com) is a reverse-mortgage specialist with PSd, Ltd. His lending area is New Mexico.