Key facts
- NRMLA said independent counseling by a HUD-approved agency is required under Section 255 of the National Housing Act before a HECM loan can close.
- The trade group said lenders cannot pay for a borrower's counseling session or steer borrowers to an affiliated agency.
- NRMLA warned that without the funding, mandatory counseling could become less accessible and affordable for seniors.
- NRMLA said its members originate more than 90% of reverse mortgages, according to the letter.
The National Reverse Mortgage Lenders Association is urging Congress to restore funding for the Department of Housing and Urban Development's housing counseling program. In a letter dated November 2 to congressional appropriations leaders, NRMLA President Steve Irwin raised concerns about the presidential pocket rescission of appropriated funds for the program, specifically the funding that supports the Home Equity Conversion Mortgage program.
NRMLA said independent, third-party counseling is a statutory requirement for every prospective HECM borrower. Under Section 255 of the National Housing Act, borrowers must receive counseling from a HUD-approved agency before a loan can close, and a counseling certificate issued by a certified counselor is required for a HECM loan to be legally closed, the trade group said.
The association also said lenders cannot pay for a borrower's counseling session, direct borrowers to a particular counseling agency or use an agency affiliated with the lender. Those restrictions are intended to ensure seniors receive objective information about reverse mortgage costs, obligations and alternatives. Because lenders are barred from funding or steering the counseling process, NRMLA said federal appropriations are essential to maintaining the independent counseling infrastructure required for HECM originations.
Without the funding, the association warned, mandatory counseling could become less accessible and affordable for seniors, potentially creating obstacles to loan closings and limiting access to the federally insured reverse mortgage program. The HECM program allows eligible older homeowners to access their home equity to support aging in place and improve their financial security.
"We respectfully urge you to take the necessary action to restore the appropriated HUD housing counseling funds so that eligible seniors may continue to benefit from the HECM program," Irwin wrote. The association represents more than 300 member companies and more than 2,000 member delegates, and its members originate more than 90% of reverse mortgages, according to the letter.