AS THE U.S. reeled from the COVID-19 pandemic in 2020 and 2021, federal, state and local governments moved in to aid homeowners at risk of falling behind on their forward and reverse mortgages. The help included direct payments to households, as well as moratoriums on foreclosures. This year, the federal government rolled out a nearly $10 billion package called the Homeowner Assistance Fund (HAF). Created by the American Rescue Plan Act, the fund is designed to provide relief to vulnerable homeowners across the U.S. Under HAF, each state is operating its own plan for helping homeowners and establishing its own rules for eligibility. While the relief has been welcome, the program has encountered some snags, particularly in the way it applies to borrowers with reverse mortgages. Some states, for example, initially ruled out aid for HECM borrowers, according to industry observers. In other states, the eligibility requirements were not always a good fit for people with HECMs. The requirements, for example, may use a measure for delinquency that works for forward mortgage payments but not for the property tax and other charges used in reverse mortgages. “We believe that the majority of those impediments or barriers have been resolved,” says NRMLA President Steve Irwin. “There may be a state or two that are outliers, but those continue to be worked on.” The next hurdle is time, which can be critical for borrowers on fixed incomes, says Sarah Bolling Mancini, a staff attorney for the National Consumer Law Center. “They really need the help.” Helping Reverse Mortgage Borrowers Impacted by COVID A Guide to the HAF Program By Joel Berg 20 REVERSE MORTGAGE / SEPTEMBER–OCTOBER 2022
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