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If I am an MLO licensed by the state of California and have a broker, can I be a counselor for reverse mortgages? Is it a full-time job I can apply for while I help my mortgage clients?

By Jennifer L. on 12.02.2018

Dear Jennifer,

I hope you're doing well. Your message touches on an important topic regarding the roles of Licensed Loan Officers and counselors within the framework established by the Department of Housing and Urban Development (HUD). It's crucial to understand that HUD has specific guidelines that differentiate between these roles, significantly counseling reverse mortgage borrowers.

HUD mandates that the counseling process for reverse mortgage borrowers be conducted independently to ensure borrowers receive impartial and comprehensive advice. This is why HUD prohibits loan originators from acting as counselors to their clients. Instead, originators must provide borrowers with a list of approved counselors, including nationwide and local options, ensuring borrowers have the freedom to choose their counselor without any influence or steering from the loan originator.

The essence of this requirement is to maintain an unbiased counseling environment. If loan originators were allowed to counsel their borrowers, it could create a conflict of interest, with the dual role leading to a biased perspective on the loan's terms and implications. Therefore, HUD insists on counseling by professionals from HUD-approved agencies who have undergone specific training, passed examinations, and cleared background checks to ensure their advice is knowledgeable and unbiased.

If your interest lies in becoming a HUD-approved counselor while also being a licensed Mortgage Loan Originator (MLO), it's important to distinguish between these goals. As a counselor, you must affiliate with a HUD-approved agency and undergo the requisite training and certification process outlined on HUD's website. This certification does not distinguish between full-time or part-time employment but focuses on the qualifications needed to provide counseling.

If your ambition extends to working with reverse mortgage borrowers beyond your clientele, joining a HUD-approved agency is necessary. This would align with HUD's regulations and ensure you're providing the best possible support to borrowers.

For more detailed information on becoming a HUD Certified Counselor and the specific requirements, I recommend visiting HUD's official website and contacting an approved counseling agency for their specific requirements and guidance.

This path offers a rewarding opportunity to impact individuals navigating the complexities of reverse mortgages significantly. I encourage you to pursue further information tailored to your aspirations and situation.

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