One of the best consumer protections built into a Reverse Mortgage is required counseling. Before a Reverse Mortgage application can move forward, borrowers must complete an independent counseling session with a counselor approved by the U.S. Department of Housing and Urban Development (HUD).
The purpose isn’t to sell you a loan. It’s to make sure you understand exactly how a Reverse Mortgage works, what it costs, and what your responsibilities will be.
Who Must Attend?
All Borrowers
Everyone who will be listed on the Reverse Mortgage loan must participate in the counseling session.
Non-Borrowing Spouse
If you are married and your spouse will not be listed as a borrower, your spouse is still required to attend. This helps ensure both of you understand your rights, the protections available to a non-borrowing spouse, and what could happen if the borrowing spouse passes away or permanently leaves the home.
Family Members, Trusted Advisors, and Power of Attorney
Although not required, I strongly encourage adult children or other trusted family members to attend the counseling session. A Reverse Mortgage is an important financial decision, and having another set of ears can be very helpful.
If someone will be signing the loan documents under a Power of Attorney (POA), that individual is also required to attend the counseling session. The counselor will want to make sure everyone involved understands how the Reverse Mortgage works, the borrower’s responsibilities, and the protections provided by the program.
The goal of counseling is simple: to make sure everyone involved – including borrowers, spouses, and anyone acting under a Power of Attorney – fully understands the loan before moving forward.
What Happens During the Counseling Session?
The session typically lasts 60 to 90 minutes. The counselor will explain:
- How a Reverse Mortgage works
- The costs and fees involved
- Your options and possible alternatives
- Your ongoing responsibilities, including paying property taxes, homeowners insurance, and maintaining the home
- When the loan becomes due and payable
At the end of the session, you’ll receive a Certificate of Counseling. Your lender must receive this certificate before the Reverse Mortgage application can move forward.
Why This Matters
I’ve always appreciated this requirement because it gives homeowners an opportunity to ask questions of someone who has no financial interest in whether they get the loan. It helps ensure that borrowers are making an informed decision and understand both the benefits and the responsibilities of a Reverse Mortgage.
If you have questions about Reverse Mortgages or would like to know whether one might be appropriate for your situation, I’d be happy to explain your options—without any obligation.
Douglas Michael Jones nmls 286668
Certified Reverse Mortgage Specialist
Mortgage Magic
