Home Foreclosure Leading Reverse Mortgage Advisory Agency: HUD’s New Funds Will Help Increase Capacity

Leading Reverse Mortgage Advisory Agency: HUD’s New Funds Will Help Increase Capacity

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The U.S. Department of Housing and Urban Development (HUD) housing advisory office announced last week that it would make more than $ 51 million in funds available in a new funding opportunity notice, one specific reasons for the new availability of financing focusing on the prevention of foreclosures related to home equity conversion mortgage (HECM) transactions.

The move has the potential to increase the number of default advisors who are active in the HECM space, according to industry professionals who spoke to RMD soon after. RMD has reached out to a leading reverse mortgage advisory agency to further assess the impact these new funds may have on lingering issues such as advisory capacity, as well as long-standing concerns including l loss mitigation education for clients.

Kathy Conley, Program Management Specialist at GreenPath Financial Wellness spoke to RMD to discuss the impact this additional funds may have on default counseling, particularly in regards to HUD’s stated intent. mitigate HECM seizures.

RMD: Are you surprised to see HUD specifically mention the idea of ​​mitigating HECM seizures in this ad? What kind of message do you think this sends?

Kathy conley

Kathy Conley: We’re not surprised. HUD strives to meet the needs of all homeowners to provide assistance that will help increase the sustainability (security) of the home. HUD recognizes the unique needs of HECM borrowers and encourages counseling agencies to focus on the needs of these borrowers, as the options for HECM borrowers are different than for a homeowner with a standard (term) mortgage.

The reverse mortgage has always been considered in the foreclosure prevention space, but these efforts are giving counseling agencies extra attention to older people at risk. It follows the 2021 US bailout, in which homeowner assistance funds can also be used to restore land charges for reverse mortgage borrowers to avoid foreclosure.

Concretely, what kind of impact do you think this decision of the ministry may have on the ability to mitigate foreclosures related to reverse mortgages?

Additional funding will provide increased advisory capacity and help counseling agencies help more homeowners and focus on the particular needs and unique situations of HECM borrowers. It is always important to increase awareness and access to help. Creating an entry point for any owner to get the help they need is progress. For many homeowners, knowing their options and being able to take action early is a big step towards successful foreclosure mitigation.

What has GreenPath’s experience been over the past year in assisting reverse mortgage borrowers? Are more of them at risk of foreclosure, or has there been another impact that GreenPath advisors have been exposed to?

At the start of the pandemic, our HOPE hotline (888-995-HOPE) saw a significant increase in calls from people with questions about housing, rent and mortgage. We are seeing a further increase with thousands of calls every month where housing – especially forbearance – is a key topic. We realize that the incomes of many HECM borrowers may have changed (or were reduced) at the start of the pandemic. As a result, these borrowers may have missed tax and insurance payments or sacrificed other expenses and bills to pay taxes and insurance.

What would advisors like to see in terms of additional relief the HUD can make available to HECM borrowers? Or, has there ever been a noticeable change between the Trump and Biden administrations?

To further meet the needs of HECM borrowers, advisory firms like GreenPath can use this additional funding to contact HECM borrowers and clarify the options available to HECM borrowers who have defaulted. Agencies can also work with HUD and lenders to promote them and encourage them to contact agencies like GreenPath for help and put a workable plan in place.

What should the reverse mortgage industry know about advisers’ efforts to help HECM borrowers, especially those facing foreclosure who may be affected by this new HUD directive?

Awareness and prevention are two drums that the industry should continue to beat. What would be most helpful for counseling agencies like GreenPath is to encourage HECM borrowers to contact [organizations like ours as] early [as possible]. Agencies like GreenPath are there for them and ready to meet them wherever they are. Many HECM borrowers live on a fixed income and falling behind can very quickly become disastrous. Creating workable repayment plans becomes more difficult the longer the problem persists.

Can the industry do anything to ease the burden on borrowers and / or advisors to make the job easier?

We are continually looking for new ways to partner with the industry. Our mission is to advance our borrowing clients. Finding ways to offer preventative assistance to HECM borrowers before the situation becomes dire will likely improve results and significantly reduce stress for homeowners. The industry can proactively contact HECM borrowers and encourage them to speak with a HUD certified housing counselor and provide defaulting borrowers with a list of agencies that provide HECM foreclosure advice.

While consulting agencies have historically used grants to support HECM clients, independent industry funding from HUD would always be welcome.

Is there anything I haven’t asked that comes to my mind about this HUD advice regarding HECM?

We know that the pandemic can still have a lasting impact on many HECM borrowers. Through our HOPE hotline, our 167 certified housing advisors and experts have helped over 9 million struggling borrowers since the 2008 housing crisis. We can help them understand their current situation, navigate their options and determine the best way forward.

Whatever the situation, we take a look at the person’s entire financial situation and help them plan their next steps. Seniors at risk of foreclosure should contact the HOPE hotline (888-995-4673), visit our website and 995 Hope for some useful resources.

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