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NCOA Brochure and Assessment Tools Now Required for Those Seeking Reverse Mortgages

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RISMEDIA, August 9, 2010—The U.S. Department of Housing and Urban Development (HUD) now requires all HUD-approved reverse mortgage counselors to provide their clients with the National Council on Aging’s (NCOA) 28-page consumer booklet on reverse mortgages. In addition, counselors must complete an extra level of financial assessment to help prospective borrowers gain a greater understanding of financial risk and other factors that may impact their loan.

“We are pleased to work with HUD to provide additional education and support to older adults seeking to tap their home equity through a reverse mortgage,” said Barbara R. Stucki, Ph.D., vice president of Home Equity Initiatives for NCOA. “We created these new tools to help older homeowners better understand their options and risks in using what is most often their most valuable financial asset—their home.”

HUD released its Housing Counseling Handbook, which includes its new HECM reverse mortgage counseling protocol, in mid-July. Counselors are required to implement the protocol by September 11, 2010. The new protocol is designed to strengthen consumer education for homeowners age 62+ who seek a HUD-approved reverse mortgage. It includes NCOA’s booklet, counseling tools and online benefits screening service.

Free copies of the NCOA booklet, Use Your Home to Stay at Home, can be downloaded at www.ncoa.org/reversemortgagecounseling, in English or Spanish. Printed copies of the booklet can also be purchased on this website. Use Your Home to Stay at Home educates consumers on the benefits and challenges of using home equity to deal with financial challenges later in life. The booklet helps consumers determine if staying in their homes is the right decision for them, understand the trade-offs of using a reverse mortgage versus other home loans, and provides information on government programs that can help them stay at home.

Reverse mortgage counselors will also be required to complete a budget review with their clients, using NCOA’s Financial Interview Tool (FIT). This counseling tool, which was developed and tested by NCOA, helps prospective borrowers consider both immediate financial needs and long-term challenges that can make it hard to stay at home and benefit from a reverse mortgage.

Seniors with incomes below 200% of the federal poverty level will also be required to complete BenefitsCheckUp.org as part of the counseling session. NCOA’s BenefitsCheckUp is one of the nation’s most comprehensive Web-based services to screen for benefits programs for seniors with limited income and resources. It includes details on more than 2,000 public and private benefits programs.

“Through this holistic approach, we hope to facilitate discussions and decisions that are based on the life of the borrower, and not just the cost of the loan,” said Stucki. “FIT helps older homeowners consider all of their financial obligations and how they will meet them on an ongoing basis. Through BenefitsCheckUp, they can learn of services and benefits that can be an alternative or supplement to a reverse mortgage.”

For more information, visit www.hud.gov or www.ncoa.org.

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