The National Center on Law and Elder Rights (NCLER) announced a guidance document to help clairfy a new option for older homeowners with reverse mortgages impacted by the COVID-19 pandemic.
Older homeowners are still reeling from the health and economic consequences of the pandemic. Financially stressed older homeowners with reverse mortgages may face foreclosure if they are unable to pay their property charges and meet the other requirements of the loan. Reverse mortgages allow borrowers 62 years or older to convert home equity into cash without the immediate need to repay the loan. Borrowers are required to pay property charges, including property taxes, homeowner’s insurance, and homeowners association fees. The lender will advance money to pay the property charges if the borrower falls behind. Borrowers can then enter payment plans to repay the advances, or face foreclosure.
The U.S. Department of Housing and Urban Development (HUD), which oversees the Home Equity Conversion Mortgage program, recently announced a new repayment option that provides an additional layer of protection for borrowers behind on property charges.