Reverse mortgage vet says an end to HUD counseling risks senior protections

A proposal to remove housing counseling as a front-end requirement for borrowers seeking government-insured reverse mortgages would eliminate a key consumer protection for seniors, according to Peter M. Mazonas, CEO of NatEquity Inc.

Mazonas voiced his concerns in a letter to the U.S. Department of Housing and Urban Development. His comments came in response to HUD’s October request for information (RFI) and a recent HUD suggestion to remove counseling as a loan requirement. Mazonas has expressed similar concerns in prior letters to HUD.

NatEquity is a California-based originator, servicer and portfolio manager of lifetime shared appreciation equity access products. The company advertises itself as a national equity access provider for senior homeowners. Per its website, the company’s mission is “to provide senior homeowners in coastal California with access to their home equity to relieve financial stress and have excess lifetime income.”

Mazonas has worked in the reverse mortgage industry for 35 years, and in a prior role with Transamerica HomeFirst, he initiated the first housing counseling program in partnership with the San Mateo County Area Office on Aging.

According to his LinkedIn account, Mazonas “created and managed the first successful jumbo private reverse mortgage company operating in 17 states [and] created the first patented lifetime reverse mortgage products and developed the methods to securitize reverse mortgages as the first longevity valued asset class.”

He wrote that federal reverse mortgage laws, as well as several state-level laws, were designed with multiple safeguards since senior homeowners are widely considered a protected class. One of these safeguards is mandatory housing counseling for all individuals listed on a property’s title before a Home Equity Conversion Mortgage (HECM) application can be funded.

Under current rules, HUD-certified housing counselors meet with prospective borrowers to review their financial circumstances, explain how a reverse mortgage works and assess whether the product addresses the borrower’s needs, Mazonas said.

Counselors also explain how a reverse mortgage affects home equity and long-term financial obligations. A certificate of completion is issued only after the counselor determines the loan is appropriate.

“Removal of the HUD certified housing counseling requirement would also reinforce the end-run strategy for unregulated ‘real estate investment’ contracts, home equity line of credit (HELOC) term loans and negative amortization line of credit products to use deceptive marketing to prey upon senior borrowers in need to access to their home equity,” Mazonas wrote.

Mazonas pointed to the financial crisis of the late 2000s as an example of risks associated with negative amortization loans and HELOC resets. These led to higher monthly payments for many homeowners, including seniors, and contributed to widespread foreclosures.

New View Advisors recently suggested that the counseling requirement could be removed from the HECM program if the “dizzying array of product choices” were narrowed down. The company wrote that many borrowers are confused by the numerous available options and that “counseling has been watered down substantially, making it more of a check-the-box step rather than a more serious safeguard.”

Mazonas offered separate comments regarding HUD’s review of whether to restructure or eliminate the government-insured HECM program after soliciting public comment.

In response to warnings that the reverse mortgage system depends too heavily on federal guarantees to absorb losses, Mazonas said the HECM program’s design and servicing standards have weakened over time, leaving HUD responsible for poorly maintained homes when loans are assigned back to the government.

Mazonas argued that the HECM program should continue but be redesigned to better reflect senior homeowners’ needs — including funding for deferred maintenance, providing predictable cash flow and reducing reliance on optimistic home-price assumptions.

Mazonas urged HUD to strengthen property oversight, limit HECM loans to the Federal Housing Administration‘s conforming loan cap and steer higher-value homes into private programs.

HUD is expected to announce its decision in 2026.