Published: March 2020

HUD must do more to protect older reverse mortgage borrowers

Advocates sent a letter to the U.S. Department of Housing and Urban Development (HUD) seeking stronger protections for reverse mortgage borrowers in response to the COVID-19 pandemic. The agency announced a 60-day halt on foreclosures of all FHA-insured mortgages, but this timeframe falls short in light of projections of the long-term impact of this crisis.

The U.S. Department of Housing and Urban Development’s (HUD) 60-day foreclosure moratorium was a crucial first step in protecting reverse mortgage borrowers, but further action is needed to ensure that this older population, which is most vulnerable to the virus, will maintain stable housing and not end up facing unnecessary foreclosures.

In commenting on HUD’s March 18, 2020 Mortgagee Letter announcing a limited 60-day moratorium of foreclosures, the coalition urged HUD to take the following additional steps:

  • Clarify that non-borrowing spouses have an additional 60 days for the submission of their loan through the Mortgagee Optional Election (MOE). This program allows non-borrowing spouses to avoid foreclosure when the reverse mortgage borrower has died. In September 2019 HUD had announced a March 21, 2020 deadline;
  • Direct servicers not to pay property taxes on behalf of reverse mortgage borrowers if the taxing authority has provided an extension or tax foreclosure moratorium, and allow an extra six months for borrowers to pay back the funds when servicers do advance property tax payments;
  • Expand access to loss mitigation for qualified homeowners by extending all deadlines related to acceptance of loss mitigation options, including the return of any loss mitigation agreements, and by allowing for new repayment plans when borrowers default during the national emergency; and
  • Extend the 60-day foreclosure and eviction moratorium announced by HUD on March 18, 2020 to at least six months.

Lead Organization

National Consumer Law Center (NCLC)

Other Organizations

The National Consumer Law Center (on behalf of its low-income clients) | Americans for Financial Reform Education Fund |Atlanta Legal Aid Society, Inc. | California Reinvestment Coalition | Center for Community Progress | Center for NYC Neighborhoods | Coast to Coast Legal Aid of South Florida | Community Legal Services (Philadelphia, PA) | Connecticut Fair Housing Center | Consumer Action | Consumer Federation of America | Empire Justice Center | Financial Protection Law Center | Housing Options Provided for the Elderly | Institute on Aging | JASA/Legal Services for Elder Justice | Justice in Aging | Legal Aid Chicago | Legal Aid Society of Southwest Ohio | Legal Services NYC | Legal Services of Greater Miami Inc. | Legal Services of the Hudson Valley | Mid-Minnesota Legal Aid | Montana Organizing Project | NAACP | NAACP Legal Defense and Educational Fund, Inc. | National Association of Consumer Advocates | National Community Stabilization Trust | National Council on Aging | National Fair Housing Alliance | National Housing Law Project | New Jersey Citizen Action | Ohio Poverty Law Center | Pro Seniors, Inc. | Public Citizen | Public Counsel | SeniorLAW Center | Southeastern Ohio Legal Services | The Legal Aid Society of Columbus | Three Rivers Legal Services, Inc. | Vermont Legal Aid, Inc. | Woodstock Institute

More Information

Click here to read the full coalition letter.

For more information, please visit NCLC.

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