2-3: COUNSELING REFERRAL PROCEDURES (11/18/1994)

© HUD Single Family Housing Policy Handbook 4235.1

The procedures below should be followed to ensure that the borrower receives the required counseling at the time he or she applies for a HECM.

A. If the lender receives a request from a borrower to apply for a HECM, the lender should refer the borrower to a housing counseling agency for counseling by providing the borrower with a list of the names, addresses and phone numbers of the HUD-approved counseling agencies in the area.

B. At the time that the lender refers the borrower to a counseling agency, it may provide the borrower with copies of the mortgage, note and Loan Agreement.

C. The lender may complete the borrower's application before referral, however, the lender cannot charge the borrower for this service if the borrower does not choose to attend a counseling session or apply for a HECM after counseling.

The lender cannot begin the process of ordering a property appraisal or any other action that would result in a charge to the potential borrower until the borrower has received counseling, and the lender has received the counseling certificate from the borrower.