After years of ongoing litigation involving reverse mortgage cases, AARP and the Department of Housing and Urban Development (HUD), the housing agency has finally put to rest long-held concerns over the protections — or lack thereof — for reverse mortgage non-borrowing spouses.
And today, consumer advocates, along with attorneys who represented non-borrowing spouse plaintiffs in various reverse mortgage cases, have applauded HUD’s new policy, noting that it will benefit thousands of older homeowners across the nation who could otherwise be at risk of foreclosure.
“We are thrilled that the lawsuits we filed beginning in 2011 on behalf of surviving spouses have helped to produce this excellent result,” said Craig Briskin, a partner with Mehri & Skalet, PLLC, who has represented plaintiffs in Bennett v. Donovan, Plunkett v. Castro, and Snyder v. Castro. “We have already heard from our clients, and other reverse mortgage borrowers and surviving spouses, about what a profound difference HUD’s new policy will make in their lives.”
He added, “Because of this new policy, seniors will no longer face foreclosure soon after they lose their spouses, adding misery to heartbreak. We stand ready to work with HUD and reverse mortgage lenders to ensure that all surviving spouses can stay in their homes, just as federal law requires.”
On Friday, the Federal Housing Administration (FHA) released new guidelines via Mortgagee Letter 2015-15, under which lenders would be allowed to defer foreclosure for certain eligible non-borrowing spouses with home equity conversion mortgage (HECM) case numbers assigned before Aug. 4, 2014.
Prior to last week’s guidance, the FHA had issued a similar policy, which was only effective for HECM case numbers assigned on or after Aug. 4.
“HUD’s new policy is welcome news for surviving non-borrower spouses, many of whom would otherwise be facing foreclosure,” consumer advocate groups said in a joint statement released Monday. “This news will be a huge relief for homeowners who are facing sale dates. We look forward to hearing from each of the reverse mortgage servicing companies as to whether or not they will use this new option to keep surviving spouses in their homes. It’s a common sense solution and we urge the reverse mortgage servicers to immediately adopt this policy for any at-risk homeowners.”
Among those consumer advocates applauding HUD’s new policy are the National Consumer Law Center; California Reinvestment Coalition; Elder Abuse Program, Institute on Aging; National Housing Law Project; Sandy Jolley; and Housing and Economic Rights Advocates.
AARP has not yet responded to RMD’s request for comment.
Written by Emily StudyPrint Article