Reverse Mortgage Counseling Requirements Increase

By Kyle Chezum Updated on 1/14/2011

1/14/11

Though counseling has always been a required element of any reverse mortgage application, the Department of Housing and Urban Development has announced that it plans to spend $3 million this year to improve its counseling programs.  Reverse mortgage loans are complex and are just one of many financial options available to seniors.  Many homeowners have entered situations they didn’t fully understand due to ineffective counseling.

Barbara Stucki, an executive with the National Council on Aging, fears that many seniors have used reverse mortgages simply to get out of immediate debt without making adequate financial plans for the future.  "Often, in a crisis situation, homeowners just want to get out of an immediate problem, but if they use all the money for the crisis and then don't have enough to maintain their homes, they're not really doing themselves any favors," she said.

HUD hopes its new emphasis on counseling will change this trend.  For full story, click here.