The National Council on Aging (NCOA) made the pilot program we reported on earlier this week official with an announcement on Thursday.
Working with the Department of Housing and Urban Development and the National Reverse Mortgage Lenders Association, NCOA is partnering with senior service agencies in Miami, Houston, Detroit, and Los Angeles to assist seniors with reverse mortgages who are most at-risk for foreclosure from not keeping up with their borrower obligations.
“While reverse mortgages can help seniors to stay at home, these funds may be depleted over time,” said Barbara Stucki, vice president for home equity initiatives at NCOA. “With economic conditions putting pressure on many of these borrowers, we want to assess the services and supports to help them remedy their delinquencies and stay at home.”
According to NCOA, case managers from the agencies will work with reverse mortgage borrowers to pursue local tax relief options and identify other financial, legal, and housing solutions to resolve delinquencies. If appropriate, case managers will also help borrowers who need to move to other housing options, such as affordable-housing or supportive-housing developments.
All of the loans and solutions will be review by NCOA and NRMLA experts to develop a set of recommendations on how best to assist reverse mortgage borrowers who are not meeting their borrower obligations. Borrowers who receive a letter informing them about their delinquency should contact their loan servicer immediately and are eligible to receive free counseling from NCOA and other select HUD approved counseling agencies.
“This problem is primarily a result of a faltering economy—lowering home values and losses in retirement savings—and our members feel a strong responsibility to help guide those in need through this rough time,” said National Reverse Mortgage Lenders Association President Peter Bell. “With the issuance of HUD’s new guidelines this week, we have a level-headed, clear road map to launch this process.”
The program will run through at least the middle of 2011 said NCOA. The pilot program was funded with a $130,000 that was provided by Bank of America, Celink, Generation Mortgage, Genworth Financial, MetLife, Urban Financial and Wells Fargo Home Mortgage.
Last year, a report from the HUD Office of Inspector General estimated there are approximately 13,000 HECM loans in default from a failure to pay taxes and insurance.
