hecm protocol training program support division office of single family housing federal housing...
TRANSCRIPT
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HECM Protocol Training
Program Support DivisionOffice of Single Family Housing Federal Housing Administration
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Where to find the HECM Counseling Protocol?
HUD Handbook 7610.1 REV-5Appendix 4
found on HUDCLIPS athttp://www.hud.gov/offices/adm/handbks_forms/index.cfm
Effective Sept. 11, 2010
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Agenda for Training
• Objectives of Reverse Mortgage Counseling
• Overview of Protocol Attachments
• Changes to Counseling Requirements
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Overview of Protocol
I. Objectives of Reverse Mortgage Counseling
– Protocol required by HERA 2008
– Overview of Contents• Educate clients• Cover required topics
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II. Counselor Roles and Responsibilities
Role - 1. To educate client about features and
appropriateness of RM for him/her
2. Provide on-going support throughout the process
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II. Counselor Roles and Responsibilities
Responsibilities1. Follow the Protocol (Counselors certify on HECM Roster
application to comply with the Protocol and to meet or exceed HUD’s requirements)
2. Create a budget based on client’s information using the Financial Interview Tool
3. Remain objective – no conflicts of interest4. Detection/Prevention of Fraud and Elder Abuse5. Sensitive to client’s circumstances
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II. Counselor Roles and Responsibilities
Responsibilities continued –6. Issue HECM Certificate
7. Review client’s level of understanding- Appendix B.10 – Review Tool
8. Follow Up with Clients
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III. The Counseling Session• Information on the Counseling Process• Paying for counseling• Client referral process• Face-to-face counseling• Telephone counseling• Emergency counseling• Issuing HECM certificate
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III. The Counseling SessionSteps in the Counseling Process
Step 2: Counseling protocol
Step 1: Intake
Step 3: Client File Completion
Step 4: Follow-up
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Review receipt of information packet
Step 1: Client Intake
Client InformationDisclosuresCounseling Process Overview
III. The Counseling SessionSteps in the Counseling Process
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III. The Counseling SessionRequired Handouts for Clients
• HUD’s “Preparing for Your Counseling Session”• NCOA’s Booklet “Use Your Home to Stay at Home
– A Guide for Homeowners Who Need Help Now” www.ncoa.org/rm
• Loan printout showing TALC• Loan printout amortization schedule• Loan comparison printout
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III. The Counseling SessionSteps in the Counseling Process
Next Steps
Step 2: Counseling Protocol Loan Costs & Obligations
Confirm Client dataClient Concerns & Interest in Reverse MortgagesClient Needs/ CircumstancesClient EligibilityIntroduction to Features
Alternatives & SupplementsRefinancing/AnnuitiesClient Review of UnderstandingQuestions & ConcernsIssue/Withhold the Certificate
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III. The Counseling SessionClient Review of Understanding
• Assess client’s understanding of RM features and alternatives
• Assess client’s understanding of obligations and risks
• Assess client’s ability to apply information to their unique situation
• 10 questions• 5 must be answered
correctly by client• If not, counselor must
withhold certificate• Client can reschedule
another session, bring family or trusted advisors if appropriate
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III. The Counseling SessionSteps in the Counseling Process
List of required contents provided in Attachment A.3
Step 3: Completing the Client File
Counselors must maintain a separate
file for each client
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III. The Counseling SessionSteps in the Counseling Process
Counselors must perform follow-up within 60 daysStep 4:
Perform Follow-up
Includes follow-up phone call/letter, outcome/close-out letter
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IV. Client Needs and Circumstances
Counselors must discuss -• Effect of property value on available equity• Effect of client’s age, eligibility and access to equity• Effect of income on reverse mortgage• Effect of time in home on costs and obligations• Using HECM to purchase less costly home
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IV. Client Needs and Circumstances
Counselors must discuss continued - • Effect of payment plan options on financial
obligations• Paying off existing mortgage and liens• Recurring and Future Expenses• Public benefits availability• Effects of HECM on heirs and estate• Client scenarios and loan comparisons
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V. Features of a Reverse Mortgage
Eligibility
Loan Features
Loan Costs
After Closing
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VI. Financial Alternatives and Supplements
Counselors are expected to review housing and financial alternatives reverse mortgages with clients
Housing alternatives– Selling and Moving
–retirement communities–home-sharing–renting – subsidized and non-
subsidized
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VI. Financial Alternatives and Supplements
Financial Options –Home equity loans–IRAs–Refinance existing forward mortgage
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VI. Financial Alternatives and Supplements
Services provided for seniors– Senior centers– Nutrition services– Community programs– Transportation
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VI. Financial Alternatives and Supplements
Public benefits– SSI– Medicaid– Medicare prescription drug program– Local tax deferral or exemption programs– The Aging Network– State Units on Aging– Area Agencies on Aging
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VII. Reverse MortgageCounseling Tools
Product Print-Outs/SoftwareCounselors discuss loan printouts and
amortization schedules from lendersCounselors can generate on IBIS RMACounselors cannot steer clients
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Attachment A: HUD Counseling Policies
• HUD’s Counseling Certificate• Paying for Counseling• Client File Contents• Participants in Counseling Session• Client Privacy• Elder Abuse• Lender Steering• Lender Communications• Lender Activities04/19/23 24
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Attachment B: Resources for Counselors
• Required Handouts for Clients• Additional Handouts for Clients• Sample: Appointment Confirmation Letter• Sample: Follow-up Letter• Reverse Mortgage Resources• Understanding TALC• Refinancing a HECM• Annuities• RM Alternatives• Reviewing the Client’s Level of Understanding• RM Online Comparison Tool• Financial Interview Tool and BenefitsCheckUp• Reporting Fraud, Abuse, Coercion or other Questionable Practices04/19/23 25
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Attachment C: Resources for Clients
• Important Information about RM Counselors• RM Eligibility Requirements• HECM Features• Steps in the RM Lending Process• RM Warnings for Consumers• Questions to Ask Your Lender• RM Borrower Obligations and Checklist• Using a RM to Buy and Annuity• RM Counseling Frequently Asked Questions• How You Can Access Your Home’s Equity: Payment Options• Preparing for Your Counseling Session• Sample Amendatory Clause and Real Estate Certificate
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HECM Counseling Protocol
Questions?
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