TABLE OF CONTENTS - HUD Exchange

1 Handbook 05/2010 TABLE OF CONTENTS Chapter Page Number CHAPTER 1. GENERAL PROGRAM INFORMATION 1-1 Legislative and Regulatory Authority .. 1 1-2 Program Description .. 2 1-3 Compliance with Program Requirements .. 2 1-4 Definitions .. 2 1-5 HUD Program Responsibilities .. 6 CHAPTER 2. OBTAINING HUD APPROVAL 2-1 HUD Approval .. 8 2-2 Approval Criteria .. 9 2-3 Application Process ..13 2-4 On-site Conference ..14 2-5 Approval of Application.

2 15 2-6 Re-approval ..16 CHAPTER 3. DELIVERY OF HOUSING counseling services 3-1 Basic Requirements ..17 3-2 Agency s Housing counseling Work Plan ..19 3-3 Client Intake ..20 3-4 Information Dissemination and Correspondence ..20 3-5 counseling services ..21 3-6 Approved Housing counseling , Education, and Outreach Topics ..23 3-7 Fair Housing and Civil Rights Requirements and Guidance ..25 3-8 Industry Standards ..28 3-9 Marketing and Outreach Initiatives ..28 3-10 Debt Management or Liquidation ..29 3-11 Knowledge of HUD Programs.

3 29 3-12 Referrals to Community Resources ..29 3-13 Discussion of For-Profit Entities ..29 Handbook 05/2010 CHAPTER 4. REVERSE MORTGAGE HOUSING counseling 4-1 Reverse Mortgage counseling and Education ..30 4-2 Entities Eligible to Provide Reverse Mortgage counseling ..32 4-3 HECM counseling Protocol ..33 4-4 Preparation for HECM counseling Session ..33 4-5 Topics to be Covered in the HECM counseling Session ..33 4-6 Reverse Mortgage Printouts ..36 4-7 Fraud Prevention ..37 4-8 Prohibition of Dissemination of Specific Loan Product Information.

4 38 4-9 Sources of Information for 4-10 Lender Steering and Disclosure ..38 4-11 Counselor Steering ..39 4-12 Reverse Mortgage Client File ..39 4-13 Follow-Up After the Reverse Mortgage counseling Session ..39 4-14 HECM Borrowers- Persons Required to Receive counseling ..39 4-15 Face to Face counseling for Prospective HECM Borrowers ..40 4-16 HECM- Exceptions to Reverse Mortgage counseling Requirement ..40 4-17 HECM- Persons Not Requiring Reverse Mortgage Housing counseling ..40 4-18 HECM counseling Certificate ..42 4-19 Concerns or Complaints against a HECM Lender or a Counselor.

5 43 CHAPTER 5. RECORDKEEPING AND REPORTING 5-1 Introduction ..45 5-2 Recordkeeping 5-3 Client Management System (CMS) ..45 5-4 File Retention 5-5 Race, Ethnicity, Disability and Income Data ..46 5-6 Confidentiality of Records and Credit Reports ..46 5-7 counseling File ..47 5-8 Group Education File ..49 5-9 Financial Records ..49 5-10 Supporting Documentation ..50 5-11 Reports to HUD ..50 5-12 Activity Reporting Methodology ..52 5-13 Failure to Comply with Recordkeeping and Reporting Requirements ..52 5-14 HUD Review and Analysis of Agency Reports.

6 52 Handbook 05/2010 CHAPTER 6. PERFORMANCE CRITERIA AND MONITORING 6-1 Performance Criteria ..54 6-2 Conflicts of 6-3 Performance Reviews (PR) ..59 6-4 Consequences of a Performance Review ..61 6-5 Inactive Status ..62 6-6 Suspension, Termination, Debarment ..64 6-7 Agency Withdrawal ..64 6-8 Post-Termination, Post-Withdrawal Requirements ..64 CHAPTER 7. FUNDING 7-1 HUD Housing counseling Grants as a Funding Source ..65 7-2 Grant Administration ..66 7-3 Other HUD Grants as a Funding 7-4 Alternative Funding Source.

7 67 7-5 Lender Funded counseling services ..68 7-6 Fees for Housing counseling and Related services ..68 7-7 Debt Management Service CHAPTER 8. APPEALS 8-1 Who May Appeal ..71 8-2 Appeal Process ..71 8-3 Timeliness of 8-4 Other APPENDICES Appendix 1 HUD Office Contact ..72 Appendix 2 HUD Handbooks ..74 Appendix 3 Website Addresses ..75 Appendix 4 HECM Protocol ..77 Handbook 7 05/2010 1 CHAPTER 1. GENERAL PROGRAM INFORMATION 1-1 Legislative and Regulatory Authority. This section identifies the statutory and regulatory authorities applicable to the Department s role in the provision of housing counseling services .

8 A. Subsection 106(a) - Housing and Urban Development Act of 1968. The Department s primary authority to provide housing counseling services is found in subsection 106(a) of the Housing and Urban Development Act of 1968 (12 1701x). Section 106 authorizes HUD to provide, make grants to or contract with public or private organizations to provide a broad range of housing counseling services to homeowners and tenants to assist them in improving their housing conditions and in meeting the responsibilities of tenancy or homeownership.

9 Subsection 106 (a) states that the Secretary is authorized to provide counseling and advice to tenants and homeowners with respect to property maintenance, financial management, and such other matters as may be appropriate to assist them in improving their housing conditions and in meeting the responsibilities of tenancy or homeownership. B. Home Equity Conversion Mortgages (HECM) Housing counseling . Section 255(d)(2)(B) of the National Housing Act (12 USC 1715z-20(d)(2)(B)) provides that to be eligible for insurance, a HECM must be executed by a mortgagor who received adequate counseling by a third party (other than the lender).

10 Subsection 255(f) establishes that the Department shall provide, or cause to be provided by entities other than the lender, housing counseling for HECM mortgagors. Mortgagors may also waive the housing counseling requirement for a mortgage provided to refinance an existing HECM when the conditions specified in subsection 255(k)(3) are satisfied. Pursuant to subsection 255(f), HECM housing counseling must include certain topics, which are also described in the HECM Handbook , this handbook, and any subsequent mortgagee letters issued regarding HECM counseling .