New York Attorney General Letitia James
led a bi-partisan coalition of 26 attorneys general, calling for the U.S. Department of Housing & Urban Development to help protect senior citizens from homelessness as a result of the COVID-19 pandemic. A
letter to HUD Secretary Ben Carson featured a number of recommended actions that can specifically help prevent seniors with reverse mortgages from losing their homes to foreclosure, as a result of the pandemic.
"This pandemic is harming all Americans, but our senior citizens are especially at risk," said Attorney General James. "While HUD has taken critical first steps to pause reverse mortgage defaults and foreclosures, we must do more to anticipate and counter the long-term economic effects of this pandemic, especially since our older neighbors will remain vulnerable to COVID-19 after HUD’s immediate relief ceases. This is about ensuring seniors have access to permanent housing and don’t have to stare down the barrel of homelessness in the future."
HUD has taken steps to help limit reverse mortgage related foreclosures, Attorney General James and the coalition believes that there are additional steps necessary to bolster existing actions that would ensure seniors with reverse mortgages won't lose their homes due to the inability to pay for recurring charges as the crisis continues.
Some of these suggestions include:
►Require that servicers educate their customers about available relief, so that no senior citizen slips through the cracks and loses their home.
►Grant servicers additional flexibility to allow reverse mortgage borrowers who need property tax assistance to seek relief from local taxing authorities. Currently, reverse mortgage holders cannot take advantage of most local tax relief programs because such programs usually create a property lien that protects the local government’s ability to collect any past-due tax revenues.
►Grant automatic renewals to homeowners with “at-risk” extensions. This existing HUD program prevents foreclosure for homeowners who have defaulted on their reverse mortgage, are over 80 years old, and have a critical medical condition. But unless HUD takes action, these borrowers will need an annual medical certification in order to extend that relief for another year.
►Allow servicers to add missed property tax and insurance payments to the end of a reverse mortgage loan balance, so that homeowners do not need to make up these missed payments as soon as a forbearance period ends.
►Prepare now to extend relief beyond 12 months, if needed, to protect senior homeowners affected by COVID-19.
Click here to read more about Attorney General James' coalition and their push to protect seniors during the COVID-19 pandemic.
