California Reverse Mortgages And Counseling

California Reverse Mortgages And Counseling

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All California reverse mortgage applicants are required to go through counseling with a certified agency. Reverse mortgage counseling used to be free but congress underfunded the program and now most agencies charge $75 to $125 for the session. It also used to be that the senior would drive down to a local consumer credit counseling agency to meet with a counselor. Now most reverse mortgage counseling appointments are conducted over the phone while the counselor is in another state.

These third party counseling agencies are certified by the US Department of Housing and Urban Development and the Federal Housing Authority to provide counseling on the Home Equity Conversion Mortgage (HECM). When indicated, the counselor may also discuss any one of the proprietary reverse mortgage programs.

Counselors go over topics including reverse mortgage interest rates; financial implications of a reverse mortgage including the addition of interest to the principal balance; fees and costs; owner occupancy requirements; borrower eligibility and calculation of the loan amount; borrower responsibilities; loan repayment; and reverse mortgage effects on taxes, public benefits, their estate and heirs.

Participating in the counseling is cause for concern among some seniors because they think it is a test that they could fail. But rest assured, the counseling is simply another form of mandatory disclosure of loan terms for the California reverse mortgage. It is impossible for the senior to fail. However, a counselor must take note in some situations if a senior appears legally incompetent or unresponsive and thus likely not able to understand what is being discussed.

Not all states require reverse mortgage counseling for all reverse mortgages programs. But counseling is required for the Home Equity Conversion Mortgage. In California, reverse mortgage counseling must be performed before the senior homeowner financially commits to the loan.

Seniors benefit from reverse mortgage counseling as a confirmation that they are making an appropriate decision and to ensure lenders are doing their jobs. It should be clear that a reverse mortgage is not free money and that a reverse mortgage is a real loan on the seniors house. The counseling can provide a level of comfort to some seniors who may be unsure and want to speak with an informed and independent third party about reverse mortgages in California.

About the Author:
Luke Helm is an expert on California reverse mortgages. He recommends Reverse-Mortgage-Info.net for more information on reverse mortgages California.



Article Originally Published On: http://www.articlesnatch.com


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