Free Counseling?

As many of you know, prospective Reverse Mortgage borrowers must attend a HECM counseling session with a HUD approved Counselor.  Years ago, these sessions were free because the government distributed grant money to the counseling agencies which covered their costs.  As the volume of Reverse Mortgage applications increased, the grant money didn’t stretch as far as it once did, and HUD permitted the counseling agencies to charge the borrower up to a maximum of $125. for the session.  Since the agencies have no relationship with the lender, and since you’re expected to pay for the session whether you close on the Reverse Mortgage or not, many of the counseling agencies will charge you up front by asking for your credit card number.  A few agencies take the chance of waiting until the closing occurs and have the lender deduct their fee from the proceeds of the loan and send it to the agency.  Recently, the government handed out grant money to various counseling agencies and earmarked it for HECM Reverse Mortgage counseling; which means that they will offer free counseling sessions until the grants are used up.  Ask about this when your lender gives you the list of counseling agencies from which to choose.

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