Understanding Reverse Mortgage Counseling with Money Fit

The concept of a Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, presents a unique financial solution for many seniors. This type of mortgage allows homeowners aged 62 or older to convert part of their home equity into cash, providing them with additional income while still maintaining home ownership and, at the same time, eliminating all current and future mortgage payments. However, navigating the complexities of a reverse mortgage can be challenging.

Recognizing this, HECM counseling has become an essential step for potential borrowers. This counseling provides crucial information and guidance, ensuring that individuals fully understand the terms, benefits, and responsibilities associated with a reverse mortgage. As a trusted financial counseling organization approved to offer HECM counseling by HUD, Money Fit offers comprehensive services that empower clients with the knowledge and tools they need to make informed decisions about reverse mortgages.

What is HECM Counseling?

HECM counseling is a mandatory step for anyone considering an FHA-guaranteed reverse mortgage. It’s designed to ensure that potential borrowers understand the intricacies of a reverse mortgage, its impact on their finances, and their obligations under such a loan arrangement. This counseling is not just a formality; it’s a valuable educational session that covers the following key areas:

  1. Understanding Reverse Mortgages: Counselors explain the nature of a reverse mortgage, how it differs from traditional home loans, and its long-term implications.
  2. Evaluating Personal Suitability: The counseling session helps individuals assess whether a reverse mortgage is suitable for their financial situation and future plans.
  3. Explaining Financial Implications and Obligations: Counselors detail the financial responsibilities of the borrower, including tax and insurance obligations, as well as maintenance requirements for the property.
  4. Alternatives to Reverse Mortgages: The session also explores other financial options available to seniors, ensuring they make a well-rounded decision.

The goal of HECM counseling is to provide a clear, unbiased perspective, helping potential borrowers make an informed decision that aligns with their financial goals and living situation. This counseling is not only a legal requirement but a critical step in safeguarding the interests of senior citizens considering a reverse mortgage.

The Role of Money Fit in HECM Counseling

At Money Fit, we recognize the pivotal role HECM counseling plays in the decision-making process for seniors considering a reverse mortgage. Our approach to HECM counseling is both comprehensive and personalized, ensuring that each client receives the information and support they need. Here’s how Money Fit makes a difference in HECM counseling:

  1. Nationwide Availability: Money Fit offers HECM counseling services across the United States, making it accessible to a wide range of clients regardless of their location.
  2. Expert Counselors: We have experienced team members who specialize in reverse mortgage counseling. They are well-equipped to provide detailed insights and answer any questions clients and their families may have.
  3. Personalized Approach: We understand that every individual’s housing and financial situation is unique. Our counselors tailor their advice to fit the specific needs and circumstances of each client.
  4. Educational Focus: Money Fit prioritizes educating clients. We ensure that you understand not just the ‘how,’ but the ‘why’ behind every aspect of a reverse mortgage.
  5. Ongoing Support: Our commitment to clients doesn’t end with the counseling session. We provide ongoing support to help you navigate the process from start to finish.

Through Money Fit’s HECM counseling, clients gain not just the mandatory certification required for a reverse mortgage, but also a deeper understanding and confidence in how this financial tool fits into their overall retirement strategy.

Benefits of HECM Counseling with Money Fit

Choosing Money Fit for HECM counseling brings several key advantages. Our approach is designed to offer a comprehensive understanding and personalized guidance throughout the reverse mortgage process.

Firstly, the depth of expertise at Money Fit ensures that clients receive accurate, up-to-date information on reverse mortgages. Our counselors stay abreast of the latest developments and regulations in the industry, providing clients with insights that are both current and relevant.

Money Fit also places a strong emphasis on educating clients. We go beyond the basics, delving into the nuances of reverse mortgages and how they impact your financial health. This education empowers clients, enabling them to make decisions that align with their long-term financial goals and retirement plans.

Moreover, our nationwide reach means that no matter where you are in the United States, Money Fit’s services are accessible. This broad availability ensures that more people can benefit from our expert guidance.

In addition, our commitment to impartial and unbiased advice means that clients can trust the information and recommendations provided. Money Fit’s goal is to help clients make informed decisions, not to sell additional products or services.

Lastly, our dedication to client success and satisfaction is unwavering. We are committed to continuing to build a track record of success stories by providing top-notch counseling services to all our clients.

Together, these benefits underscore Money Fit’s commitment to helping clients navigate the complexities of reverse mortgages with confidence and clarity.

Stories of Empowerment: How Money Fit’s HECM Counseling Made a Difference

At Money Fit, we believe in the power of informed financial decisions, especially when it comes to navigating retirement options like reverse mortgages. The real-life stories we’re about to share are more than just success cases; they’re testaments to how our HECM counseling has positively impacted lives, providing not just financial relief but also a sense of empowerment and security. These narratives from our clients illustrate the tangible benefits and informed choices made possible through our guidance.

  • Gerry’s Story: At 71, Gerry, a legally blind man living alone, faced financial challenges with an income of about 70% of the area median. He found relief through a Home Equity Conversion Mortgage (HECM), which eliminated his monthly mortgage payments. This adjustment significantly eased his financial burden, giving him peace of mind. Additionally, the HECM provided Gerry with a line of credit, and a safety net for potential major home repairs, ensuring that he could maintain his independence and security in his own home.
  • Robert’s Story: At 66, Robert, a hardworking veteran and residential painter, faced a difficult decision about his financial future. With a desire to reduce his workload but confronted with nearly $10,000 in essential home repairs, Robert sought guidance from Money Fit. During his consultation with a HECM counselor, he learned about the details of reverse mortgages, weighing their pros and cons. Even though Robert had no intention of leaving his home as an inheritance to his children and step-children, Robert was hesitant about incurring debt on his mortgage-free home, a status he had maintained for over a decade. After thoughtful contemplation and a few weeks of reflection following the counseling session, Robert opted against a HECM. Instead, he chose a path that aligned better with his principles: securing two additional painting contracts and a personal loan to fund the home repairs. Though it meant taking on more work and a loan, Robert felt good about his decision, having stood by his value of hard work. Robert knew that not all retirees had the health and energy that permitted them to continue working.
  • Marilyn’s Story: Marilyn, 70, lived with an income less than 50% of the area median income, a situation that posed constant financial strain. By opting for a HECM, she managed to increase her monthly income by a substantial 33%, while also eradicating her monthly mortgage payment. This financial maneuver not only provided her with much-needed financial stability but also involved a thoughtful decision discussed with her children, acknowledging that her home would not be part of any inheritance. Marilyn’s story is a testament to the power of strategic financial planning in later life.
  • Sally’s Story: At 83, Sally, a single woman with a modest income under 30% of the Area Median Income, found herself in a precarious financial situation. Living next to her 55-year-old son, she struggled with no disposable income for emergencies or discretionary purchases, leading her into credit card debt for necessary home repairs. The turning point came with her decision to take a HECM, which not only cleared her credit card debt but also freed up 20% of her income for discretionary spending each month. This transformation is allowing Sally to enjoy her senior years with less financial stress and more freedom.
  • Evelyn’s Story: Evelyn, an 85-year-old widow active in community organizations, found herself in a financial dilemma after her husband’s recent passing. Living in a middle-class home, Evelyn found that a decrease in monthly income made it challenging to afford her home’s monthly payments. The solution came in the form of a HECM, which eliminated her mortgage payment. This change drastically improved her financial situation, increasing her discretionary spending from a meager $200 to over $1,500 a month. This significant improvement allowed Evelyn to continue her community involvement and live comfortably without the financial stress that had burdened her since her husband’s death.

Process of HECM Counseling at Money Fit

The HECM counseling process with Money Fit is a structured yet straightforward one, designed to be informative and supportive for clients.

First, the counselor and client set an appointment for the counseling session. The counselor then gathers basic contact and mortgage information from the client, after which they provide the client with the required pre-counseling session packet via email or mail. HUD requires that the client have a minimum of three days to review the materials including information on what to expect during the session, the basics of reverse mortgages, and sample schedules of possible reverse mortgage payments and balances over time.

During the counseling session, Money Fit’s counselors cover all aspects of reverse mortgages, ensuring clients fully understand the product, its benefits, and obligations. Topics such as financial implications, loan repayment conditions, and homeowner responsibilities are thoroughly discussed. Counselors also address and answer questions about heirs, concerns about outliving their equity, and if or when they must repay the reverse mortgage.

Throughout the process, counselors encourage clients to ask questions and express any concerns they may have. This interactive approach ensures that clients are actively involved in the learning process, making them more confident in their decisions.

After completing the counseling session, clients receive the required certificate of completion, which the counselor may also forward it the client’s lender if requested by the client. However, the support from Money Fit does not end here. Clients are encouraged to reach out for further assistance or clarification as they proceed with their reverse mortgage journey.

This end-to-end support system, from initial inquiry to post-closing follow-up, exemplifies Money Fit’s commitment to guiding clients through every step of the HECM process with care and expertise.

Empowering Your Financial Future: Take the Next Step with Money Fit

HECM counseling is an invaluable step for seniors considering a reverse mortgage. It provides a comprehensive understanding of the intricacies involved, ensuring that individuals are well-equipped to make informed decisions. Money Fit, with its commitment to personalized, detailed, and accessible counseling, stands as a reliable partner in this journey.

Our mission is to ensure that every client feels confident, informed, and supported throughout the process. The journey of navigating a reverse mortgage can be complex, but with Money Fit’s guidance, it becomes a manageable and enlightening experience. We encourage anyone considering a reverse mortgage to reach out and take advantage of the expertise and support offered through our HECM counseling services.

If you are considering a reverse mortgage, or simply want to learn more about them, we invite you to contact Money Fit for a counseling session. Our team of experienced counselors is ready to provide you with the information and guidance you need. Visit our website at www.moneyfit.org/housing-counseling or schedule your counseling session here to find more information.

Take the first step towards a financially secure future with Money Fit’s expert guidance on reverse mortgages. We’re here to help you every step of the way.

About the Author

Client Credit Report Authorization

You hereby authorize and instruct Debt Reduction Services, Inc. (DRS, dba Money Fit by DRS) and/or its assigned agents to:
  • Obtain and review your credit report, and
  • Request verifications of your income and rental history, and any other information deemed necessary for improving your housing situation (for example, verifying your annual property tax obligations and homeowner’s insurance fees)
Your credit report will be obtained from a credit reporting agency chosen by DRS. You understand and agree that DRS intends to use the credit report evaluate your financial readiness to purchase or rent a home and/or to engage in post-purchase counseling activities and not to grant credit. You understand you may ask any questions pertaining to your credit report. However, while DRS will review the information with you, the company is not able to furnish you with a copy of your credit profile. You hereby authorize DRS to share your information from your credit report and any information that you provided (including any computations and assessments produced) with the entities listed below to help DRS determine your viable financial options.
  • Banks
  • Counseling Agencies
  • Debt Collectors
  • Landlords
  • Lenders
  • Mortgage Servicers
  • Property Management Companies
  • Public Housing Authorities
  • Social Service Agencies
Entities such as mortgage lenders and/or counseling agencies may contact your DRS counselor to evaluate the options for which you may be eligible. In connection with such evaluation, you authorize the credit reporting and/or financial agencies to release information and cooperate with your DRS counselor. No information will be discussed about you with entities not directly involved in your efforts to improve your housing situation. You hereby authorize the release of your information to program monitoring organizations of DRS, including but not limited to, Federal, State, and nonprofit partners for program review, monitoring, auditing, research, and/or oversight purposes. In addition, you authorize DRS to have your credit report pulled two additional times to conduct program evaluations. You also agree to keep DRS informed of any changes in address, telephone number, job status, marital status, or other conditions which may affect your eligibility for a program you have applied for or a counseling service that you are seeking. Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Client Privacy, Data Security, and Client Rights Policy

NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

To prevent unauthorized access, maintain data accuracy, and ensure the correct use of information, we have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure the information we collect online. We limit access to your nonpublic personal information to our employees, contractors and agents who need such access to provide products or services to you or for other legitimate business purposes.

Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to DebtReductionServices.org for details of our services.

  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
  2. Fees: We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
  3. Records: We maintain records of the services you receive, including notes about your progress or other relevant information to your work with us. You have the right to access and view your records by making a request to your counselor.
  4. Confidentiality: We respect your privacy and offer our services in confidence with the understanding that we may share such information with auditors and government regulators. Certain laws or situations may also lead to disclosing confidential issues, such as those involving potential child abuse or neglect, threats to harm self or others, or court subpoenas.
  5. Refusal of Services: You have the right to refuse services without any penalty or loss.
  6. Disclosure of Policies and Practices: You will be provided our agency disclosure statement.
  7. Sharing of Information: Sometimes we will need to contact other agencies or we may need to share your information, including your records, with other agencies or with regulators. We will do this only if you sign this form that gives us permission except for limited reasons; please see # 5 above for examples of such situations.
  8. Other: You have the right to be treated with respect by our staff, and we expect the same from you in return. We encourage you to always ask questions if something is not clear. We also encouraged you to express your thoughts and advocate throughout our services.

You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

Disclosure  Statement

NOTE: If you have an impairment, disability, language barrier, or otherwise require an alternative means of completing this form or accessing information about our counseling services, please communicate with your DRS representative about arranging alternative accommodations.

Program Disclosure Form

Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

No Client Obligation

The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).