Your Dec. 18 editorial points to problems in HUD’s reverse mortgage program, and the reform that is taking place is indeed long overdue. But in this process, it is critical to address the needs and concerns of senior citizens, whom the program was intended to serve, and not just the concerns of HUD and mortgage bankers.
While many reverse mortgages are in default, as you note, the overwhelming majority are not. Meanwhile, the reality is that accessing their home equity is many seniors’ best and only option to meet critical medical and other expenses. Before HUD began insuring reverse mortgages in the late 1980s, there simply was no market for the product.
So mend it, don’t end it. One of HUD’s highest priorities should be protecting borrowers and their spouses while they are still living in their homes. We represent individuals who were defrauded by mortgage lenders into taking their name off their deed, and discovered too late that HUD would not protect them from foreclosure when their spouses died. HUD needs to enforce the statutory protection that Congress gave these spouses, and not force them out on the street.