New Protections for Older Homeowners with Home Equity Conversion Morgage (HECM) Reverse Mortgages

The U.S. Department of Housing and Urban Development (HUD) recently made significant improvements to the options available for reverse mortgage borrowers at risk of foreclosure due to property charge default. The agency enhanced the program by eliminating the ban on successive repayment plans for larger arrears and clarified that HOA and condominium fees may be included in a repayment plan, at the servicer’s discretion.

HUD has also improved the “At-Risk Extension” option that allows a reverse mortgage servicer to delay foreclosing when the borrower in default on property charges is over age 80 and either they or another member of the household has a critical health circumstance. Under updated rules announced in a new version of the FHA Servicing Guide that takes effect April 29, 2024, the At-Risk Extension stays in place for as long as the borrower is residing in the home, removing any need for an annual renewal.

To read more and learn about other protection for reverse mortgage borrowers, please review the practice tip by the National Center of Law and Elder Rights.

Nassau Suffolk Law Services’ Foreclosure Prevention Project provides free legal services to homeowners hoping to prevent foreclosure of their homes.

Services provided include:

• Legal representation at the various stages of the foreclosure process, including at mandatory court settlement conferences, drafting pleadings, and drafting and opposing motions
• Assist borrowers pursuing loss mitigation options, including loan modifications
• Advice and Counsel

The Project is part of the HOPP network, a Statewide coalition that includes HUD-certified housing counseling agencies. As such, we will make referrals to and collaborate with HOPP-funded, non-profit housing counseling agencies. Clients must reside in the homes subject to foreclosure and have low to moderate income for Long Island as annually set by HUD. Nassau residents can call (516) 292-8100 and Suffolk residents can call (631) 232-2400 to be screened for eligibility.