In response to the District of Columbia City Council’s proposed Reverse Mortgage Foreclosure Prevention Act of 2017 (B22-0505), National Reverse Mortgage Lenders Association Executive Vice President offered testimony in support of the bill’s intention to keep borrowers in their homes, but also raised concerns that unclear legislative language could potentially create undue economic hardship for reverse mortgage borrowers who are behind on taxes and insurance.
As introduced, this bill seeks to establish a new program in the Department of Housing and Community Development (DHCD) called the Reverse Mortgage Foreclosure Prevention Program. The program would provide financial assistance in the form of a zero interest loan to seniors who meet the eligibility requirements. The max amount that can be provided to a single homeowner over a five year period would be $50,000.
“We applaud the efforts of the committee to enhance reverse mortgage borrower safeguards and to offer assistance to those reverse mortgage borrowers who may have issues with their required property tax and hazard insurance payments,” testified Irwin. “There are, however, some potential unintended consequences in the Bill as currently drafted. We would like to offer the resources of the National Reverse Mortgage Lenders Association to work with the Committee, and to coordinate with HUD, to develop a program which truly delivers the intended benefits and not place a reverse mortgage borrower at greater risk.”