Revised 6-1-07 Latest Update from Direct Connect
Direct Connect is a service commonly used by reverse mortgage advisors to order third party counseling reverse mortgage counseling for their borrowers. One of the questions I posed to the head of the HUD counseling department in Santa Ana, CA is how are HUD counselors going to keep up with this rapidly changing industry. To their credit, each counseling session is performed with product specific information and the numbers that are discussed are specific to the loan estimates of the borrower. See below for further information.
Changes in HECM Counseling
On February 15, 2007, HUD issued an email to all HECM Network counselors across the country that outlined the temporary suspension of the use of loan comparisons by HECM Network counselors.
On June 1, 2007, B. Belling of AARP issued an email to all HECM Network counselors across the country that stated that all HECM counselors are still required by HUD to provide their clients with loan printouts to illustrate the financial implications of a HECM loan.
On June 4, 2007, HUD issued an email to NFCC (Mike Turner), MMI (Daniel Fenton), DirectConnect (Dennis Dice & Chuck Blommaert) and AARP (Ken Scholen & Bronwyn Belling) to participate in a conference call to address the 6/1/07 email issued by AARP. On the conference call NFCC, MMI and DirectConnect all raised their concerns about the different products in the marketplace and how to solve the issue.
At the conclusion of the conference call, it was agreed by HUD that DirectConnect would add loan vaule fields to the borrower registration, allowing the lenders to either upload a PDF of the RMA or enter the necessary information so HECM counselors can run actuate numbers within the RMA when speaking to a borrower. It's important that our DirectConnect network counselors be consistent with what loan officers are presenting to their borrowers.
DirectConnect Modification Date
The DirectConnect system has been modified to allow the lender to provide accurate loan value data or a PDF of the loan data for the counselor. This modification will be effective 06/21/2007. This solution should avoid the pitfalls where the counselor would use generalized numbers to try to explain to the borrower the financial impact of the reverse mortgage.
NOTE: If you fail to provide the necessary loan values that you presented to the borrower, our network HECM counselors per HUD guidelines will use estimated values to perform the required HECM counseling.
Reverse Mortgages; Choosing an Advisor
The reverse mortgage industry is changing rapidly. It is important that when choosing a reverse mortgage advisor, you look for a professional that specializes in these very special loans. We study the industry on a daily basis. We are committed to being dedicated to our borrower not a specifc product or sale. Your advisor needs to have the skill level to ask questions that will define what products you should look at and if a reverse mortgage is appropriate for your situation. There are several new reverse mortgage products on the market. Each program has unique nuances that your advisor needs to be familiar with.
HUD Relaxes Face to Face Counseling Requirements
Independent HUD approved counseling is required on all reverse mortgage programs. HUD has just recently relaxed it's face to face policy that required either the application or the counseling session to be in person. HUD recognized that a significant amount of older Americans live in rural areas or and do not have access to readily available transportation. Both the independent counseling session and the application may be taken by phone.
