The most popular reverse mortgage program is the Home Equity Conversion Mortgage (HECM), which is insured by Housing and Urban Development (HUD).
New rules from HUD add protections for certain surviving spouses after the death of a reverse mortgage borrower. Until recently, if the non-borrower spouse was not on the loan, he or she was not entitled to remain in the property following the death of the borrower. But under HUD’s new rules, non-borrowing, surviving spouse can remain in the home if specific conditions are met. These changes apply to reverse mortgage loans in which the borrowing spouse applied for a reverse mortgage before August 2014. In addition, the couple must have resided in the property as their principal residence throughout the duration of the HECM, and taxes, property insurance and any other special assessments that may be required by local or state law must have been paid.
The concern regarding non-borrowing spouses has been a source of many reverse mortgage issues. Here’s why: The amount of money a reverse mortgage borrower can draw is based in part on the age of the youngest borrower—and unless all borrowers are 62 or over, they would not qualify for a reverse mortgage.
For more information:
Reverse Mortgage Information
- Ask students to comment on the statement: “While a reverse mortgage can be used to supplement monthly income, some borrowers may face unintended obstacles and consequences”. What might be those consequences?
- Are the new rules from HUD effective in protecting senior citizens? Why or why not?
- Why should you talk to a qualified professional before deciding to get a reverse mortgage?
- Where can you find HUD-approved HECM Counseling Agencies near you?
How can you verify whether or not a debt collector is legitimate? Below are a few warning signs that signal a debt collection scam:
- The debt collector threatens you. Legitimate debt collectors probably won’t claim that they will have you arrested or claim that they or their employee are law enforcement officers.
- The debt collector refuses to give you information about your debt or trying to collect a debt you do not recognize.
- The debt collector refuses to give a mailing address or phone number.
- The debt collector asks you for sensitive personal financial information.
Tell the caller that you refuse to discuss any debt until you get a written “validation notice.” This notice must include the amount of the debt, the name of the creditor, and a description of certain rights under the federal Fair Debt Collection Practices Act.
For additional information and to learn more on debt collection practices, click here.
- Ask students to draft a sample complaint letter explaining that the debt is not legitimate and demanding the debt collector stop contacting you.
- Ask students to compile a list of governmental and nongovernmental agencies where consumers can send debt collection complaints.
- Do all states require debt collectors to be licensed?
- If the debt collector is licensed in your state and he/she is not acting properly, what are your remedies?
- Who enforces the Fair Debt Collection Practices Act and how this law protects consumers?