REVERSE MORTGAGE COUNSELING
Part of the qualification process for Reverse Mortgage is that the borrower and anyone remaining on title must complete mandatory counseling by a HUD approved counselor before the application is submitted. During the session a counselor will work with the borrower to help explain how Reverse Mortgages work. They will also review the financial and tax implications of taking out a Reverse Mortgage. Counseling will also include payment options and costs associated with a Reverse Mortgage. The counselor will also highlight available resources that you may find useful in meeting your financial needs. Counselors are not lenders or financial advisers. The counselor’s goal is to help the borrower understand the available options so the borrower can make an informed decision. Upon completing a counseling session, the borrower will be issued a Certificate of Participation. The signed Certificate of Participation is needed for loan processing. All sections of the certificate must be completed. Also, the certificate must be signed and dated by the Counselor. The borrower’s signatures must be dated after the counselor’s signature and it must be within 180 days of the loan application.
The lender can take the application but cannot occur cost on the borrower’s behalf until a fully executed counseling certificate is on file. The fee for counseling is typically $150. This fee can be paid at the time counseling takes place or in certain instances it can be added to the settlement charges. The following parties to Reverse Mortgage must obtain counseling. All parties must sign and date the certificate:
- The borrower and non-borrowing spouse
- Anyone remaining on title
- Anyone using power of attorneys and legal representatives and trustees
- Guardians and conservators