A local Baltimore NBC News outlet this week looked into the potential implications faced by non-borrowing reverse mortgage spouses when they are removed from the title of their homes.
The coverage from local WBAL TV-11 focuses on one couple, Mr. and Mrs. Breeden, who took out a reverse mortgage on their Baltimore County home in 2007 and are now fearing the loss of their home should the borrower named on the title and reverse mortgage need to move into full time care.
“The Breedens went through U.S. Department of Housing and Urban Development-required counseling before taking the reverse mortgage, but they said the issue of taking Charlotte off the title didn’t come up, and they didn’t truly understand what could happen,” the WBAL TV-11 said.
HUD now requires all non borrowing spouses to attend reverse mortgage counseling, per a 2011 mortgagee letter.
The news segment borrows some insight from National Reverse Mortgage Lenders Association President and CEO Peter Bell, on why couples might consider removing one spouse from the home title when taking out a reverse mortgage.
“It’s something that’s generally done when people have existing indebtedness on the property and other expenses that need to be paid, and they can’t get enough money if the loan is underwritten to the younger age,” Bell said.
Also mentioned in the segment is the case of Robert Bennet who is represented by the AARP Foundation in a lawsuit against HUD that claims the agency violated federal law by making surviving spouses vulnerable to foreclosure.
A Washington, D.C. court ruled against HUD in the October-September lawsuit in favor of two reverse mortgage non-borrowing spouses, however, HUD has since filed a notice of appeal regarding the lawsuit.
Written by Jason Oliva