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Attorney General Josh Stein Calls on Federal Government to Protect Seniors’ Homes During COVID-19 Pandemic

For Immediate Release:
Friday, May 1, 2020

(RALEIGH) Attorney General Josh Stein today called on the U.S. Department of Housing and Urban Development (HUD) to take immediate action to protect senior citizens from homelessness as a result of the COVID-19 pandemic. In a letter to HUD Secretary Ben Carson, Attorney General Stein and a coalition of 26 attorneys general recommend specific steps that HUD can take to ensure senior citizens with reverse mortgages do not lose their homes to foreclosure.

“Older North Carolinians are among the most at risk during this pandemic,” said Attorney General Josh Stein. “We must do everything we can to protect them from economic struggles so they can focus on protecting their health. I urge HUD to take additional steps to make sure seniors don’t lose their homes during this crisis.”

Reverse mortgages in the United States 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.

While the multistate coalition applauds HUD’s efforts to implement relief for reverse mortgage borrowers as included in the federal CARES Act, today’s letter outlines additional steps that would bolster the effectiveness of HUD’s existing actions. The coalition 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 Stein is joined in sending today’s letter by the Attorneys General of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, the District of Columbia, and Puerto Rico.

A copy of the letter is available here.

More on Attorney General Stein’s work to protect North Carolinians during the COVID-19 pandemic:

Contact:
Laura Brewer (919) 716-6484

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