Three members of Congress are urging eight executive agencies to make changes that would protect surviving spouses from foreclosure.
On Wednesday, Ranking Member Maxine Waters (D-Calif.), U.S. Senator Richard Blumenthal (D-Conn.) and Lois Capps (D-Calif.) sent a letter to agencies including the Consumer Financial Protection Bureau (CFPB) and the Department of Housing and Urban Development that detailed the unique circumstances many surviving spouses may face under mortgage loans on which they are not named.
“Surviving spouses throughout the country have found themselves in this troubling situation, including in our states,” Waters, Blumenthal, and Capps wrote. “These individuals, who also may be struggling with responsibility for medical bills, funeral costs, and other expenses while adjusting to a loss of income, are trapped without a means of preventing the loss of their homes.”
A unique circumstance named in the letter is when surviving spouses’ names do not appear on the mortgage loan for their home, and are forced to assume the loan in order to remain in the home
Banks usually require payments to be up-to-date in order for a survivor to assume the loan—and if the survivor can’t afford those payments, banks will often refuse to negotiate loan modifications, “treating them like strangers instead of partners to the deceased,” says the letter.
Waters, Blumenthal, and Capps don’t specifically refer to reverse mortgages, but the changes the three are seeking may refer to all kinds of mortgages.
Other agencies addressed in the letter include the Federal Housing Finance Agency, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Federal Reserve, the Department of the Treasury, and the Department of Veterans affairs, all of which deal with various aspects of the foreclosure process.
“We urge each of your agencies to use all powers at your disposal to ensure that financial institutions provide surviving spouses with full information about a loan, as well as help them to assume mortgages if they seek to, avoid foreclosure, and stay in their homes,” Waters, Blumenthal, and Capps wrote. “In addition, as your agencies implement legal settlements with homeowners who were wrongfully foreclosed upon, we ask that you examine the eligibility of surviving spouses for the legal redress to which their late partners may have been entitled.”
Written by Alyssa Gerace