$5 million in federal Community Development Block Grant (CDBG) funds should be released to help Home Equity Conversion Mortgage (HECM) borrowers in Puerto Rico who are delinquent on paying their property taxes and insurance. This is according to a letter submitted to Puerto Rico Housing Secretary Luis C. Fernández-Trinchet, Esq. by the National Reverse Mortgage Lending Association (NRMLA).
Following the devastation brought to the United States territory by Hurricanes Irma and Maria in 2017, the local government on the island put into place a disaster recovery action plan designed to distribute CDBG funds to homeowners impacted and facing foreclosure. Adding a release of $5 million in CDBG funds will help HECM borrowers facing a foreclosure action, according to the association’s letter, which was shared with NRMLA membership in an email newsletter late last week.
“Although the amount of the allocation may seem small within the broader spectrum of the CDBG-DR program, such an allocation will benefit thousands of elderly individuals who have limited or no income, and who may be facing a dire situation due to their inability to cover basic tax and insurance payments and may consequently end losing their homes,” the letter states, which is signed by NRMLA President Steve Irwin.
The association has been working on providing additional assistance to affected borrowers in the territory for some time, and hopes that this letter will spur additional action which has likely been delayed by normal bureaucratic processes, Irwin told RMD.
“As funds get allocated and resources made available, oftentimes the bureaucracies can impede the funds making their way to the customers,” Irwin said in an interview. “It’s not due to bad intent, it just gets bogged down.”
The association also specifies that it is making itself and its resources available to the Puerto Rico Department of Housing (PRDOH), if such assistance is required.
“Additionally, NRMLA is available to assist PRDOH, without any additional cost to PRDOH, in the outreach and intake of the individuals who may benefit from the proposed program, as well as to coordinate with the PRDOH in how to set up and manage the program,” the letter reads. “NRMLA is also prepared to provide statistics and non-sensitive information about the population of homeowners who would benefit from this proposed program, and who would eventually retain their homes.”
NRMLA has made this kind of assistance available to other localities in the past, and wants to make the same service and materials available to Puerto Rico seniors to get them help that’s needed, Irwin said.
“To do that, it may be necessary for us to aggregate anonymized industry-wide data, and we want to provide that as we’ve done in other states and localities in the past,” Irwin told RMD. “We’re encouraging and offering the same assistance to affected Puerto Rico borrowers. That way, they can get the help they need and deserve.”
Recently, an investigative report published by USA Today explored some of the difficulties being faced by borrowers in Puerto Rico, and detailed that reverse mortgages in the territory are resulting in non-death-related foreclosures at a rate of nearly one-in-four between 2014 and 2018. This is an issue magnified by Puerto Rico’s struggles with natural disasters, falling home prices and a lack of understanding relating to the territory’s unique tax exemptions, according to the report.