HUD Reverse Mortgage Counseling Financial Interview Tool Benefits
Part 1 (Your thoughts before…)
This week (September 11th) begins the implementation of the Financial Interview Tool & Benefits Check Up (BCU) as part of HUD counseling for all reverse mortgage applicants.
Please give us your thoughts (positive or negative) on this new protocol and questions to be covered. We want your perceptions before the protocol goes into effect, and after you and your clients have had some experience with the new protocol.
Let your voice be heard and post your comments below.
PS: Dont forget that you can view and “instant replay” our webinar last week on this subject.
11 Comments
If Ronni Bennett is having a hard time with the idea of providing financial information (see part 7 at Time Goes By) and so many of her readers agree, will FIT and BCU become barriers to seniors getting HECMs? I wonder how many of those “subjected to” BCU have any idea what the difference is between a revocable and irrevocable burial account; the ones who just know the difference should automatically be awarded a counseling certificate.
To date, it is Dr. Stucki who is answering all of the questions about FIT and BCU. Yet counseling is run by HUD not NCOA. While it is OK for Dr. Stucki to address aspects of FIT and BCU, it is odd she is the one telling us how it relates to the issuance of a counseling certificate.
Was it actually a Freudian slip that it starts on 9/11? I would like to hear what HUD’s specific expectations are for FIT and BCU? As to counseling, some will be claiming that the HUD flag is flying upside down after 9/10?
There is no need to guess what Ronni Bennett has to say about answering some of the questions on BCU. Ronni replied to a similar comment I also made on September 7th to the Reverse Mortgage Daily article at http://reversemortgagedaily.com/2010/09/07/inside-look-lender-conditions-from-the-consumer-perspective/#more-5938. In part it states:
“Did Ronni Bennett participate in FIT and BCU? It is doubtful…
Proponents of FIT and BCU scoff when asked what will happen if seniors refuse to answer FIT or BCU questions. …but a senior cannot get a counseling certificate if the senior fails to answer even ONE of the FIT and BCU questions. If the goal of the senior is to get a certificate, not answering one FIT or BCU question results in abject failure. So is the lesson here — it is better to lie than not answer???
If Ronni has concluded the questions she is being asked are intrusive, imagine how she would feel about BCU questions on the separate values of cars she owns. Then there are the BCU questions on the separate values of revocable and irrevocable BURIAL accounts.”
Well on September 9th, Ronni replied in that same RMD thread of comments in part with:
“I don’t know what FIT and BCU mean (I am assuming they are proposed new requirements of HECM borrowers???), but if such information as car values and burial contracts had been required, I would have canceled my application and managed to live without a reverse mortgage.
As to whether elders will follow like sheep to answer any personal question that is asked, you guessed right, critic: unless someone is in desperate straits and has no choice at all, they won’t answer when they believe the questions go too far.
We are old but we’re not stupid. And we can’t be bullied.”
To those who think all seniors will not hesitate to answer any question they are asked in counseling, please read once again the statement of Ronni Bennett. While I do not disagree with the use of either FIT or BCU, I find the “all questions must be answered” standard not just offensive but overbearing. Nothing in law or regulation gives HUD the right to use this foolish and senseless standard.
I have not yet seen the FIT form nor the BCU questions in their entirety. We are currently stuck with these regulations, however I am reserving judgement until I can go over these forms. Once that is done, I can then counsel my clients (kind of like “no child left behind” so that they pass these intrusive tests. I agree that NCOA seems to be the governing body rather than HUD; however be that as it may, it is in our interest to make sure the client is prepared fully. As a senior, I would probably not answer any question that I believe to be intrusive and insulting.
The other part of this puzzle is and will always be the quality of the counselor. There seems to not be any true oversight once they get in their hours and pass their test.
Our Customer feedback indicates that some counselors are giving advice that is outside the parameters of their responsibility. Three that I have had recently: One couple who had a FIT score of 3 thought they should not proceed because they did not get a perfect score; another the counseling intake interviewer told a person over 62 he cannot qualify under FHA eligibility rules on title (which is the underwriters job) when in fact he could qualify in 30 days if we had a counseling certificate to proceed; And finally the most disturbing was a person whom the counselor told to apply with a certain lender.
I had my 1st interview with a prospective RM client today, Mon. 9/20. Before the appt. I called Clearpoint to see how much the counseling was going to be so that I could inform my client. The gal that answered the phone knew nothing about any changes. She had heard that solmetime in October they were going to have some changes come through.. I just thought it was interesting that she didn’t know about any changes.
One Word: NIGHTMARE! The first customer I had under the new protocols cancelled application and stated they would get back to me if interested. They weren’t interested in giving me an explanation and I certainly was not going to push it.
Tom,
Just curious. Did they have a list of the questions to prepare for the FIT or BCU? Was it the FIT or BCU or that pushed them off the edge?
Two clients had counseling last week with no problems or complaints.
Yesterday a high volume originator who has been in the business for over 7 years called me from Arizona asking me how many HECMs prospects cancelled this week because of counseling. I told him we were barely able to save one last week and then he began describing how he had lost two.
So what is going on?
In our case, the counselor told the senior that because of the high equity she had, she would be smarter to sell her house and downsize. She called us in near tears asking why the counselor wanted her to move out of her 900 square foot, two bedroom-one bath, well maintained home which has a beautiful ocean view and if he could stop her from getting the reverse mortgage. Her lot is less than 5,000 square feet. She is only a little cash short a few months each year mainly due to real estate tax payments but the HECM will more than provide what she needs. She is in fairly good physical condition with no recent hospitalizations. From what she told us the counselor gave no reason for his determination.
The situation in Arizona sounded worse. In each case, the counselor informed the borrower that they did not need and should not get a HECM. Yet from all indications the originator had received from the borrower, there was little question but they did. This was the first time he and a counselor had ever reached such differing conclusions. While the Arizona originator is slightly aggressive, he certainly is not that aggressive. In his view neither of these cases was even close to borderline; they needed HECMs to stay in their homes.
It seems from this very small sample that rather than bringing us closer together, the new protocol at least for now seems to be driving counselors and originators to opposite conclusions more frequently than before. Could it be that counselors are “counting flags” rather than adopting the holistic approach which we were told was behind the new protocol? The situation seems much different now than before. Will these different views be brought together or get worse? The sample is far too small to reach any conclusions.
I was recently added to the HECM Counselor Roster in June 2010. I treat the counseling session as an informative session for the client. I do not tell them whether it’s a good or bad idea for them. I give them all the information they need to make an informed decision on their own. I ask them the reason they are seeking the HECM and I do discuss alternatives with them, as well as government programs that might be able to provide assistance, but I’m not going to tell them to sell their house and downsize. It may not be the best option for them.
I also don’t tell the client whether they are eligible or not. I tell them its up to their lender to determine their eligibility. The only time I mention anything about that is if they have a high mortgage balance. I tell them that the HECM may not be enough to pay it off.
As far as disclosing personal information, I’ve only encountered one person who wouldn’t provide certain information. I always let the client know that their information is kept confidential. I also let them know that the FIT and BCU are new requirements that need to be filled out, which may be the only reason I would be asking certain questions.
As far as that counseling agency not being aware of the changes, maybe you didn’t talk to the reverse mortgage counselor. I know our receptionist probably wouldn’t know about the changes and she would refer the call to me.
the job of the counselor is to discuss options, advantages or disavantages of the loan product, not to imposse the views on what’s appropriate or in the best interests of the client. Our job is to inform and educate only. All questions on the FIT program are not intrussive and are rather fact finding and within the context of counseling to determine best “fit” for the client. I would also say that most lenders don’t know what goes into the counseling and see counselors as obstacles for them getting paid. Our job is to counsel the clients on the things that you don’t, can’t or won’t. A reverse mortgage is not for everyone that shows up at your doorstep or calls you…sometimes selling the home would be the best option or using a HECM for purchase to get a new home that’s affordable and best fits the clients needs. In the end, this is the choice of the borrower.