AARP Sues Federal Government over Reverse Mortgages
The AARP has sued the U.S. Department of Housing and Urban Development, the federal agency that regulates reverse mortgages. The AARP lawsuit claims that the U.S. governement's actions have caused many elderly homeowners to lose their homes to foreclosure after the death of a spouse. The lawsuit focuses on reverse mortgages where only one spouse signed the loan documents. That policy was implemented in late 2008.
The policy changed the procedures so that surviving spuses who are not named on the mortgage must pay the full loan balance to keep the home, even if the property has declined in value. Thousands of homeowners are potentially affected by the rule change.
Some lenders encourage only the elder member of a couple to put their name on the mortgage, because then the payout is greater. Upon the death of the spouse in whose name the mortgage is maintained, the reverse mortgage payments cease, and the survivor must repay the entire mortgage balance immediately.
For more information, you can review the AARP news release concerning the lawsuit, click here; or a New York Times article, click here. Reuters has also provided a thorough analysis, click here.
Before you obligate yourself for a reverse mortgage, be sure to consult with someone with knowledge of reverse mortgages and their impact on the home owner, and their family - who is not the mortgage broker offering the reverse mortgage to you. For more information on reverse mortgages, click here. For additional analysis of the potential consequences of reverse mortgage, click here.
The policy changed the procedures so that surviving spuses who are not named on the mortgage must pay the full loan balance to keep the home, even if the property has declined in value. Thousands of homeowners are potentially affected by the rule change.
Some lenders encourage only the elder member of a couple to put their name on the mortgage, because then the payout is greater. Upon the death of the spouse in whose name the mortgage is maintained, the reverse mortgage payments cease, and the survivor must repay the entire mortgage balance immediately.
For more information, you can review the AARP news release concerning the lawsuit, click here; or a New York Times article, click here. Reuters has also provided a thorough analysis, click here.
Before you obligate yourself for a reverse mortgage, be sure to consult with someone with knowledge of reverse mortgages and their impact on the home owner, and their family - who is not the mortgage broker offering the reverse mortgage to you. For more information on reverse mortgages, click here. For additional analysis of the potential consequences of reverse mortgage, click here.
Posted by Randy Coleman at 3/14/2011 3:26 PM 
Categories: reverse mortgages
Tags: Jacksonville elder law attorney reverse mortgages
Categories: reverse mortgages
Tags: Jacksonville elder law attorney reverse mortgages
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