Crisis in reverse mortgages? Some say yes

The Federal Housing Administration says an insurance program backing reverse mortgages is “losing money and can no longer remain viable in its present form.” So it implemented new rules in October.

News Story (Florida)

Charles Elmore
Seattle Times
December 9, 2017

Tags: Housing: Mortgage

Organizations mentioned/involved: Jacksonville Area Legal Aid (JALA)


Foreclosures in reverse mortgages climbed to more than 3,600 a month last year, up from less than 500 a month in previous years, according to government data analyzed by nonprofit groups.

 A 92-year-old Florida woman with a reverse mortgage faced a foreclosure filing because she owed 27 cents, a legal-aid group said.

The legal-aid organization said in some instances it has helped win court orders to let seniors return to or stay in their homes, but the cases point to serious risks with reverse mortgages — including aggressive tactics by mortgage servicers.

“Wrongful reverse-mortgage foreclosures are at a crisis stage and there are very few, if any, protections from the bad practices of the servicers,” Jacksonville Area Legal Aid said in a statement.