The US Urban Housing and Development has halted their foreclosures on the widowed spouses of people who hold reverse mortgages. HUD changed their policy which in 2008 which now requires the heir of the mortgage holder to pay off the full balance of the loan even if the home is at lower value. The policy was changed in 2008. The AARP sued HUD for the policy change that forced many homes into forced foreclosure from which retaining a foreclosure attorney is advised. The suit against HUD allowed three defendants to avoid foreclosure because the policy change violated previous contracts.
To qualify for a reverse mortgage also called a Home Equity Conversion Mortgage, the applicant must be 62 years of age. For this type of loan no repayment is required unless the mortgage holder no longer uses the home or dies. Their heirs or spouses who wish to purchase the home are required to pay the entire loan amount even if the house sells for less, according to the 2008 policy change. In this current environment where many homeowners have been foreclosed on driving the value of homes down, the new policy enacted by HUD has put many spouses in a bind and they faced foreclosure, necessitating a foreclosure lawyer.
The original 1989 rule stated that the mortgage holder’s heirs would never owe more on the house than it was worth. The ruling today may bring many of those heirs out of foreclosure if similar cases are won. There are many though that still face foreclosure in this country and foreclosure attorneys will still be needed for future litigation.
