Congress Members Seek More Reverse Mortgage Non-Borrowing Spouse Protections

A group of 18 Congress members led by Rep. John Lewis (D-GA) is seeking additional protections for non-borrowing spouses of reverse mortgage borrowers, per a letter sent to Department of Housing and Urban Development Secretary Julian Castro on December 18. 

In the letter, the Congressmen ask that HUD “take whatever steps are necessary to prevent lenders from foreclosing on surviving spouses,” noting the additional protections recently implemented that protect new non-borrowing spouses of reverse mortgage holders. 

The authors discuss having learned from constituents that some past borrowers have been advised to remove a homeowner from title in order to qualify for a reverse mortgage or receive more in proceeds than would otherwise be possible. Yet though they are told they can later refinance to add the non-borrowing spouse back onto the home title, they are often unable to do so due to the expense of refinancing.


The letter cites recent mortgagee letter (2014-07) as having offered a remedy to only non-borrowing spouses whose spouses get reverse mortgages on or after August 4, 2014. Past borrowers should be offered a similar protection, they write. 

“The same protections must be offered to every non-borrowing spouse regardless of when their reverse mortgage was created,” the letter states. It also requests information from HUD about the number of borrowers who have been foreclosed on, the investors in those properties, and the borrowers who could face foreclosure due to having been removed from title in the past. 

The non-borrowing spouse topic is the subject of ongoing legal proceedings involving HUD and several plaintiffs who are represented by the AARP Litigation Foundation. 

Written by Elizabeth Ecker

Join the Conversation (4)

see all

This is a professional community. Please use discretion when posting a comment.

  • Anyone who thinks that headline risk from non-borrowing spouses was removed by ML 2014-07 is badly mistaken. The law as originally enacted is clear by its lack of modifiers that displacement protection was intended for all spouses of borrowers whether the surviving spouse was a borrower or not.

    Rather than trying to get HUD to do something that it cannot do, that is, create Mortgagee Letters that change the program for HECMs still accounted for by the General Insurance Fund, he and the others should have introduced legislation funding displacement protection for all spouses as stated in the law at 12 USC 1715z-20(j). After all only Congress can either change law or fund provisions of law they enact.

    It is time that members of Congress like Representative Lewis step up and get Congress to fund 12 USC 1715z-20(j), the HECM displacement protection provision for surviving spouses.

  • Isn’t this a case of House members asking for more borrowers to have displacement protection rather than that protection being provided to more maturing events?

    In other words the House members are asking 1) that all non-borrowing spouses be covered by Mortgagee Letter 2014-07 no matter when their case number was assigned RATHER THAN 2) making such protection available if the mortgage goes into the due and payable status because the borrower must permanently go into a hospital or skilled nurse setting. Aren’t both needed? That is, shouldn’t all non-borrowing spouses be covered and shouldn’t the protection be as broad as possible rather than being restricted exclusively to the death of the borrowing spouse?

  • It’d be nice if they requested the current policy be revised too. I’m not comfortable with the Titleholder having to die in order for the NBS to exercise the deferral period. I’d like to see more options then death. For example, if the Titleholder had to move to Assisted Living.

    • Raymond,

      I do not believe that the death of the borrowing spouse should be called an “option.” Isn’t that rather THE only qualifying event under which a surviving NBS can elect the right to defer payoff but only if the surviving NBS meets all other NBS requirements?

      It is not as easy as the borrowing spouse passing away and a surviving NBS can exercise the deferral period. If the surviving NBS does not meet all of the other NBS requirements plus elect to defer the payoff, there is no deferral period under the NBS rules.

      However, you have hit the nail on the head. There should be no distinction between the displacement protection provided surviving NBSs and surviving borrowing spouses of deceased borrowers. The principal difference between a surviving NBS and a surviving borrowing spouse should be the general rights to access proceeds. When it comes to a surviving NBS, as of the death of the borrowing spouse 1) all HECM payouts should cease and 2) the line of credit should be terminated.

string(121) ""

Share your opinion