Federal and state regulators need to better support basic information in housing and housing finance. They are too concerned with potential conflicts of interest, even when counseling is a mandatory requirement and funding for programs is scarce.

An example surfaced recently when the $38.5 billion slashed from the national budget for the remainder of fiscal year 2011 was the entire $88 million that the U.S. Department of Housing and Urban Development requested for housing counseling, including $8 million to $9 million that was targeted for reverse mortgage counseling for seniors.

According to the National Reverse Mortgage Lenders Association, funding from fiscal 2010 will cover agencies through Sept. 30, 2011. After that, the elimination of the federal funding will mean that counseling fees will be charged directly to seniors. It is also likely that those fees will increase.

Reverse mortgage funds can be distributed either in a lump sum, regular monthly payments, line of credit or in a combination of those options. When the house is sold, or the last remaining borrower dies or moves out of the home, the loan amount plus the accrued interest is repaid. The borrower can’t owe more than the value of the home.

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