Tag Archives: Reverse Mortgages

In a recent audit of HUD's oversight of the Department's Home Equity Conversion Mortgage (HECM, or reverse mortgage) program, HUD's Office of the Inspector General (OIG) found that HUD's policies did not always ensure that borrowers complied with residency requirements, according to a release from the HUD OIG.

On Friday, HUD amended its HECM policy again, this time to include reverse mortgages originated prior to August 4, 2014, giving borrowers expanded options to allow the non-borrowing spouse to remain in the home if the reverse mortgage was originated before that date.

The revisions announced Friday allow for the deferral of due and payable status for reverse mortgages, hence protection from foreclosure, for certain eligible non-borrowing spouses upon the passing of the last surviving borrower for case numbers assigned prior to August 4, 2014. Last year, FHA's HECM policies were revised to include such protections for non-borrowing spouses on HECMs for case numbers assigned on or after August 4, 2014.

In an announcement regarding the letter to Castro, Waters said that many senior citizens have faced foreclosure or will face foreclosure due to "fraudulent lending practices" on the part of lenders surrounding HUD's previous protocol for the HECM program.

Reverse mortgage software and technology provider ReverseVision has grown their company with the addition of a new Operations Team, according to an announcement from the company.

Perhaps the most serious complaint comes from surviving, non-borrowing spouses. When the borrower spouse dies, surviving spouses suddenly face foreclosure, despite the fact that "some consumers report that their loan originator falsely assured them they would be able to add the other spouse to the loan at a later date," the report states. Similarly, others complained that the loans are often difficult to repay and that lenders often throw obstacles in the way when consumers take steps to avoid foreclosure.