In the coming months the Federal Housing Administration will issue preliminary regulations that will be the first step in developing a method to mathematically determine a borrower’s eligibility for a reverse mortgage, according to Meg Burns, director of Single Family Program Development for the FHA.
The administration recently implemented a new set of standards for Home Equity Conversion Mortgage counselors which established a roster and testing standards to qualify counselors. Counselors will also have to follow a set of protocols to help determine whether a reverse mortgage will help a borrower. Burns told the NY Times, “We’ll be weeding out the bad counselors going forward.”
The changes come after a report from the Government Accountability Office, which sent investigators posing as borrowers to 15 reverse mortgage counseling sessions. According to the report, none of the counselors covered all of the required topics, and some overstated the length of the sessions in records provided to the government. Read the new rules for counselors (NY Times)