WASHINGTON – May 2, 2011 – The Department of Housing and Urban Development has thrown out a rule it put in effect in 2008 for reverse mortgages, which was causing grief for some homeowners and their heirs.
The rule reversal came about in response to litigation by the AARP Foundation, which sued HUD on behalf of three spouses of deceased reverse-mortgage borrowers. The spouses were put in danger of foreclosure because of the rule.
Reverse mortgages are loans available to seniors age 62 or older who have equity in their homes. The loan typically makes cash or a line of credit available to the homeowner based on the equity in their property and their age. Seniors have been warming to reverse mortgages because the obligation to repay the loan is deferred until they die, sell the home or move out. Before the 2008 rule change, the practice stipulated that spouses, who might have been removed from the title so the elder partner could qualify for the reverse mortgage, could purchase the home for 95 percent of the property’s true market value.
Read More at:
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=259380
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The rule reversal came about in response to litigation by the AARP Foundation, which sued HUD on behalf of three spouses of deceased reverse-mortgage borrowers. The spouses were put in danger of foreclosure because of the rule.
Reverse mortgages are loans available to seniors age 62 or older who have equity in their homes. The loan typically makes cash or a line of credit available to the homeowner based on the equity in their property and their age. Seniors have been warming to reverse mortgages because the obligation to repay the loan is deferred until they die, sell the home or move out. Before the 2008 rule change, the practice stipulated that spouses, who might have been removed from the title so the elder partner could qualify for the reverse mortgage, could purchase the home for 95 percent of the property’s true market value.
Read More at:
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=259380
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