New Reverse Mortgage Law Can Help Save Your House for Your Spouse

New Reverse Mortgage Law Can Help Save Your House for Your SpouseUnited States’ HUD department has again made changes in its reverse mortgage rules with regards to the rights_ of surviving spouses. The new changes allow loan servicers to allow back a reverse – mortgage loan to the HUD where there is still a living spouse. The reverse mortgage lender can after that make financial-claim against FHA – Insurance Fund.

The Nation’s Housing After Marciano passed away in 2014, Alva, his widow, got bad news from her mortgage company. She was informed that if she didn’t have $18,000 (the principal amount) the loan fees as well as the accrued interest which had built up from the reverse mortgage of the house they had owned for over 20 years, they would like foreclosure on the house. Unfortunately, Alva didn’t have the money, so she started preparing for eviction. Alva’s experience is comparable to that of more than 12,000 windows and widowers all over the country. As a surviving spouse whose name isn’t on the loan contract, Alva had no any rights of staying in that property although it once belonged to her husband who was the sole signer of the Home -Equity Conversion – Mortgage Loan. Previously, they had been guaranteed severally that in the event of Marciano’s passing, Alva_ would comfortably stay in that house indefinitely, but she had no protection in reality as the sole signee of the property was dead and no longer staying in that home. The mortgage company eventually sent her a letter demanding her to pay up or face foreclosure noting that this was a requirement under the federal senior reverse mortgage rules. Had this occurred five years ago, Mrs. Marciano would have been unlucky because the mortgage policies that didn’t favor widows. Marciano died when courts had developed the deep interest in HECM loans, and they ruled out that FHA must do what is needed to prevent such types of foreclosures. Note that reverse- mortgage was created so that seniors who are 62 years or older can comfortably withdraw or take out money against equity placed on their houses, and they don’t need to pay any money back until they move out, sell or die. There has been an increase in cases challenging the contentious HUD rules regarding widowed spouses or partners who live in such houses and whose names weren’t included on reverse – mortgage documents. But with the current changes, a surviving non-borrowing spouse is covered under the newly updated HUD policy. A reverse mortgage lender can now allot back a loan to HUD and also make a financial claims FHA –Insurance Fund.