Counseling Protocols & Client Communication Flashcards

A lender refers a client to a specific counseling agency. Under HUD rules, this arrangement:

Answer: Is prohibited because counseling must be independent of the lender

HUD prohibits lenders from steering borrowers to specific counselors or agencies to preserve the independence of the counseling process.

Which of the following topics is REQUIRED to be covered in every HUD-approved HECM counseling session?

Answer: Options other than a reverse mortgage, such as selling or refinancing

Counselors are required to discuss alternatives to a HECM, including selling, downsizing, home equity loans, and public benefit programs, so borrowers consider all options.

A client who completed HECM counseling six months ago now wants to proceed with a different lender. Must the client complete counseling again?

Answer: It depends on whether the counseling certificate has expired under the lender's guidelines, typically 180 days

Most lenders and HUD guidelines treat counseling certificates as valid for 180 days, so a certificate issued six months ago may be expiring or already expired.

When conducting telephone counseling for a HECM applicant, the counselor should:

Answer: Send required materials in advance and confirm the client received and reviewed them before the session

For telephone counseling, the counselor must ensure the client has received and had time to review required materials before the session begins.

A client tells the HECM counselor that they plan to use loan proceeds to help a grandchild pay for college. How should the counselor respond?

Answer: Acknowledge the goal, explain how the loan works, and ensure the client understands long-term implications

Counselors should not judge borrowers' spending intentions but must ensure they understand how the loan affects their equity, estate, and financial future.

Under the HECM program, who is responsible for paying the counseling fee?

Answer: The borrower pays the fee, and it may be financed into the loan if the agency allows

Borrowers are responsible for counseling fees, and HUD allows agencies to permit fee financing into the loan proceeds for borrowers who cannot afford to pay upfront.

Which scenario would MOST likely require a counselor to pause a session and follow up at a later date?

Answer: The client becomes emotionally distressed and is unable to focus on the information being presented

If a client is too distressed to absorb the required information, the counselor should reschedule to ensure meaningful understanding, which is the goal of counseling.