Counseling
A FHA Insured Reverse Mortgage (HECM's) requires counseling before your loan file can be processed including but not limited to ordering your appraisal.
For those of us who have been in the business a while all remember sending our first time home buyers to get a certificate by taking a counseling class to be able to close their loans. Ironically, you could have been one of these It may not seem fair to have to take a class when you purchased your first home and then again when you got your "New Lease on Life", with a reverse mortgage, lol. Back then, it was required at the very end of the transaction in order to make the PMI (Private Mortgage Insurance) company happy, so they would insure the loan, with the first time home buyer's low down payment. FYI, is called PMI on Traditional/Conventional Mortgages and MIP on FHA, including Reverse Mortgages.
So now the main thing that has changed is I send my customers to their counseling class to get their certificate relatively upfront in the beginning of the transaction, not the end. It is really very similar, a third party conducting a long interview (usually on the phone) to make sure the customer/buyer/borrower, understands what they are getting into and what their responsibilities are. The counselor will send on lot of time on reviewing your understanding that you will still own the home and therefore it is you, who must still pay your taxes and insurance and keep up your home, even though you will no longer have a mortgage payment and may even be receiving a monthly check. The counselor in many ways confirms that I have done my initial job to cover all this information accurately, and provide four or five specific documents on a timely fashion.
Generally the counselor will do a very good job reviewing how a reverse mortgage works and the benefits of them. The will cover the costs of them in a very generic fashion, not necessarily specifically, yours. They will cover the impact on your estate and your heirs. There is a page on this website dedicated to that subject. Please sure to read that from top to bottom its tap button is labeled "The Kid's Inheritance."
The Senior (you) will be given a code, by or from me, to give to the counselor so if the counselor can, should they wish to be able to actually view copies of these documents online, and other papers you have been given that pertain to the disclosures associated with your loan.
As part of those disclosures I initially give the borrower/client (you) is about the "counseling" process itself, including a list of independent counseling organizations and it will be necessary for you to call some of them on the list and choose which one on your own. Generally, these companies accommodate the senior with a telephone counseling session therefore since it can be on the phone you can use any of them, anywhere in the United States. Initially when you call you will only be scheduling the counseling session which will be normally schedule about 12 days out or more so you will want to make that call soon. All of my clients have taken their counseling on the phone, but the counseling session can take place in person or on the phone. It normally takes about 45 minutes on the phone with the counselor. It is very important to adhere to the scheduled time just like a doctor's appointment, including if you can not make the scheduled time to call in advance and reschedule.
|