Reverse mortgage borrowers who have benefited from an Oregon tax deferral program in recent years will be able to stay in their homes while maintaining their reverse mortgages and tax deferrals for two years, following a bill signed into law by Gov. John Kitzhaber this week.
The bill, “Requires financial institution to notify potential borrower of prohibition against pledging tax-deferred homestead as security for reverse mortgage.”
Additionally, the bill temporarily allows for reverse mortgage borrowers to remain in their homes—about 1,700 of which were dropped suddenly from the tax deferral program because they were reverse mortgage borrowers. Most reported they would lose their homes were they not able to defer the taxes as they had been able to in the past.
Borrowers will be notified over the course of the next 90 days, local reports said.
“It is, of course, good news, and should relieve many alliance members,” David Raphael, co-founder of the Alliance for Vulnerable Homeowners told the Regal Courier. “But as we rejoice, we should also keep in mind that a lifeline was not extended to thousands of other distressed homeowners who were unfairly dropped from the program last year. Oregon’s property tax assistance program remains deeply flawed, and we should rededicate ourselves to the challenge of building a bigger lifeboat and a better program during next year’s legislative session…. There is lots more work to do.”
Most states do not allow for property tax deferral beneficiaries to have reverse mortgages.
View the bill text.
Written by Elizabeth Ecker