The Chicago Tribune is reporting that many seniors with reverse mortgages have been neglecting to pay property taxes and homeowner’s insurance and the government is developing new educational tools and written communications to help.
With $3 million from the Department of Housing and Urban Development, counseling agencies will be working with homeowners who fall behind and will be asking more detailed upfront questions about homeowners’ finances before the loan closes.
“We’re getting people to think more broadly about what they’re doing with home equity,” said Barbara Stucki, vice president of home equity initiatives for the National Council on Aging. The organization is one of five HUD-approved agencies providing mandatory counseling to reverse-mortgage applicants. “Often, in a crisis situation, homeowners just want to get out of an immediate problem, but if they use all the money for the crisis and then don’t have enough to maintain their homes, they’re not really doing themselves any favors,” Stucki said.
As RMD reported earlier, the counselors will be using a guide developed by NCOA as part of the Pilot Program announced last week.