Press Releases
05/01/2020
Attorney General Tong Calls on Federal Government to Protect Seniors’ Homes During Coronavirus Pandemic
Attorney General Tong Calls on Federal Government to Protect Seniors’ Homes During Coronavirus Pandemic
(Hartford, CT) -- Attorney General William Tong today joined a bipartisan coalition of 26 attorneys general urging the U.S. Department of Housing and Urban Development (HUD) to take immediate action to protect seniors with reverse mortgages from foreclosure as result of the COVID-19 pandemic.“No one should lose their home as a result of the COVID-19 pandemic. HUD has taken important steps to protect homeowners with reverse mortgages during this crisis, but more can and must be done. Our bipartisan coalition is outlining several measures that HUD can take right now to keep seniors in their homes,” said Attorney General Tong.
Reverse mortgages are typically home equity conversion mortgages (HECM) that are insured by HUD and that do not require borrowers to make monthly mortgage payments. Instead, mortgage borrowers just pay recurring charges (such as property taxes and homeowner’s insurance) and must keep their homes in good condition to avoid defaulting on their loan. Because HUD insures these loan products, the agency sets the rules that the servicers of these reverse mortgages must follow — enabling it to help homeowners who fall behind on these obligations. This is why HUD’s actions are even more critical in providing housing stability for homeowners during the COVID-19 crisis.
Over the last two months, HUD has taken significant steps to limit reverse mortgage foreclosures as Americans battle COVID-19. While the multistate coalition applauds HUD’s efforts to implement relief for reverse mortgage borrowers — as included in the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) — today’s letter outlines additional steps that would bolster the effectiveness of HUD’s existing actions, and would help ensure that seniors with reverse mortgages do not lose their homes because of their inability to pay recurring charges during this crisis.
The multi-state coalition — led by New York Attorney General Letitia James — is asking HUD to:
• Require servicers to 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.
Attorney General Tong joins Attorney General James and the attorneys general of California, Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, the District of Columbia, and Puerto Rico in sending today’s letter to HUD.
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Media Contact:
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