Move Will Increase Risks and Financial Burden for Older Vulnerable Homeowners
WASHINGTON, April 13, 2011/PRNewswire-USNewswire/ --Legislation scheduled to pass Congress this week would eliminate all funding, totaling $88 million, for the Housing & Urban Development Department's (HUD) Housing Counseling Program. These cuts include all funding for federally mandated reverse mortgage counseling. This budget was zeroed-out as part of the FY 2011 Continuing Appropriations Act (H.R. 1473).
In order to obtain an FHA-insured reverse mortgage, which currently represents 95% of the market, federal guidelines mandate that all borrowers must first go through HUD-approved reverse mortgage counseling. The National Council on Aging (NCOA) is one of eight HECM Intermediaries that provide this counseling service nationwide.
"This unique counseling helps older homeowners understand the costs, benefits, and risks associated with these loans," said Barbara Stucki, vice president for Home Equity Initiatives at NCOA. "Without this funding, the older Americans who can least afford it may have to pay for this critical advice out-of-pocket."
Over the past three years, NCOA has worked with HUD and the reverse mortgage industry to improve the quality of counseling sessions. In addition, the loss of the counseling funding will impact counselors' ability to help reverse mortgage borrowers who are in default and at risk of foreclosure.
"In these difficult economic times, people have to increasingly tap their home equity to make ends meet," said Stucki. "This new budget proposal is a major setback and increases the financial vulnerability of all older adults looking to use their home to stay at home."
NCOA urges Congress and the Administration to restore funding for this critical program for older adults in the upcoming FY 2012 budget discussions.
The National Council on Aging is a nonprofit service and advocacy organization headquartered in Washington, DC. NCOA is a national voice for millions of older adults—especially those who are vulnerable and disadvantaged—and the community organizations that serve them. It brings together nonprofit organizations, businesses, and government to develop creative solutions that improve the lives of all older adults. NCOA works with thousands of organizations across the country to help seniors find jobs and benefits, improve their health, live independently, and remain active in their communities. For more information, please visit: www.NCOA.org |www.facebook.com/NCOAging | www.twitter.com/NCOAging