David Berenbaum, deputy assistant secretary for the Office of Housing Counseling at the U.S. Department of Housing and Urban Development (HUD), addressed industry attendees at the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in San Diego last week. He emphasized the important role that the public-private partnership between the industry and HUD represents for the constituency served by these loan products.
“Our work together, our partnership, is to ensure that older Americans have a safe, affordable, and secure place to live, and to age with grace and financial health in our nation,” Berenbaum said. “As we heard from the leadership of NRMLA, there is so much opportunity for all of us to help realize that vision. But, of course, there are also challenges.”
Modernized counseling
Berenbaum spoke about the development of the Office of Housing Counseling and how it has become a critical piece of the puzzle for the Federal Housing Administration (FHA)’s Home Equity Conversion Mortgage (HECM) program over the years. Recent guidance from HUD aims to expand the allowable modalities of the actual counseling sessions.
“I spoke with the [NRMLA] board, alongside [FHA Commissioner Julia Gordon], about our modernization efforts, including our new regulation, which will go into effect next month,” Berenbaum explained. “This is important for elders and older Americans because the majority of those seeking reverse mortgage counseling prefer telephonic services, which has been the norm since the pandemic.”
The modernization rule, he said, is simple in that it seeks to meet consumers where they are. Some people seek counseling services but might find it challenging to do so in-person.
“If they want to meet face to face in the office, that’s great,” he said. “If they prefer to talk by phone at night, on weekends, or during the day, that’s fine too. Virtual counseling is also an option. The common denominator is that they must receive high-quality services that meet or exceed HUD standards, and we monitor that closely through our program reviews.”
The world has changed, and some of that change was forced by the realities of the COVID-19 pandemic. But that has also illuminated some of the need for additional flexibilities on an issue like counseling modalities.
“We are in a world where people use multiple methods of communication, and we, like the real estate and housing finance industries, have updated our standards,” Berenbaum explained. “Our new rule was universally embraced by all stakeholders. Today, we have the largest number of HUD-certified housing counselors in the history of the program — around 4,400, though the number fluctuates.”
Creating adequate resources
Counselors must work for a HUD-approved counseling organization. But improved efforts are not only about being certified, Berenbaum said.
“Over 10,000 people have passed the certification exam since it became the norm, so it’s a large number of professionals,” he said. “Of course, there’s turnover — some people move on to housing finance or real estate, others become coordinators or executives in nonprofit organizations, and some simply retire. That turnover has been a challenge for our HECM-certified housing counselors.”
He then turned his attention to data, highlighting that in 2017 there were nearly 100,000 HECM counseling sessions.
“You all understand how the market was quite different at that time,” he said, a reference to disruptive HECM program changes implemented in October 2017. “By 2022, the numbers were close to 85,000 to 87,000 sessions, but recent challenges have affected those numbers. In fiscal year 2023, there were nearly 55,000 sessions, and year to date, we’re at about 23,000.”
But those numbers on their own are misleading, Berenbaum explained. There is a discernible appetite for reverse mortgage options, and baby boomers as a cohort are not overly prepared for the prospect of aging in place.
“They lack adequate resources, as Julia Gordon has noted,” he said. “I agree that the HECM product, private-label products, and HECM for Purchase products will be critical resources for ensuring sustainable homeownership and aging in place for older Americans.”
His office is up to such a challenge, Berenbaum said. Incorporating HECM counseling into the broader strategic goals that HUD maintains will be an important factor to address the needs of senior borrowers, a demographic that will only grow over time.
“Relevance to the industry is important — sharing our story, ensuring access to housing counseling, positioning counselors for success, and embracing new technology,” he said. “We hope to do more with you, leveraging AI and educational tools to help elders, homeowners and their families make informed decisions about reverse mortgage products. Ultimately, we want to make it easier to do business with us, and we’ve been active on all fronts.”
