FIT for Reverse Mortgage Lenders: Part I FIT is all about questions
SEPTEMBER 2010
GEORGIA MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
36
It is a new day in HECM counseling (and lending) in America. Beginning this month, the U.S. Department of Housing & Urban Development (HUD) is mandating extra questions that HECM counselors must ask reverse mortgage prospects in prelending counseling. These questions and processes are packaged as the Financial Interview Tool or “FIT.” Along with FIT, HUD is also requiring HECM counselors to do a benefits audit for seniors, using an online resource called BenefitsCheckUp (BCU). Across the country, there are public and private benefit programs for seniors with limited means. For those who qualify, these programs could supplement reverse mortgage cash or render it unnecessary, preserving it for times of real need. The National Council on Aging (NCOA), a HUD counseling intermediary since 2007, created these tools—results of years of exclusively serving seniors. Lending, including reverse mortgage lending, is over-weighted in left-brain skills and processes and severely underweighted in right-brain insights and perspective. The FIT questions are designed to correct this structural intel-
• • • • • • • •
lectual imbalance and bring about a more holistic or whole-person approach to HECM counseling (and lending). FIT questions cover areas such as funds usage, absence or presence of other safety nets, for example, insurance policy or pension benefits for a surviving spouse, and transitional issues like widowhood, divorce and separation, among others. The FIT/BCU approach has been used through the NCOA national network since 2007, and NCOA’s data and experience show that it has been a success with seniors. Like any good organization attuned to good ideas and best practices, HUD got wind of FIT and BCU, studied them, and adopted them for its own ends: Protect seniors and manage its insurance business risks at the Federal Housing Administration (FHA). A review of some initial industry participants’ comments suggests there are some misconceptions about FIT (and BCU). With focus on FIT questions and risk-factors, the series explain these new realities in reverse mortgage lending in the age of the Dodd-Frank Act.
Nationwide Appraisal Company FHA and HVCC Compliance Appraisals BPO’s AVM’s National Vendor Network RealEC Integrated In Business Since 1970
888-485-1999 Ext. 2 www.coesterappraisals.com
Headlines and breaking news from NationalMortgageProfessional.com.
continued on page 42
Headlines and blogs from around the web.