The government-backed reverse mortgage program provides a crucial safety net for older adults, allowing them to close the gap between their income and expenses by converting their home equity to cash. But in recent years, the program has been threatened by surging insurance claims, on the one hand, and a rising tide of defaults on the obligation to pay property taxes and insurance, on the other. The Department of Housing & Urban Development (HUD) has responded to both of these crises by implementing new origination rules that limit access to the reverse mortgage product for the low-income borrowers most in need of the financial relief that reverse mortgages can provide. Rather than curtailing the program for those that need it most, more focus on reverse mortgage servicing and on implementing robust loss mitigation could reduce property charge foreclosures while also preserving the core mission of the Home Equity Conversion Mortgage program (HECM) to allow vulnerable elders to tap into home equity while aging in place.



Sarah B. Mancini is of counsel at the National Consumer Law Center.

Odette Williamson is a staff attorney in the National Consumer Law Center’s Boston office.

The writing of this article was made possible by a grant from the Borchard Foundation. The authors thank Tara Twomey for her extensive editorial help, Alys Cohen for reviewing the draft, Emily Green Caplan and Ana Giron Vives for their assistance, and Todd Kaplan, Sarah White, Brenda Grauer, Connie Cline, Christena Durost, Lynn Drysdale, Kevin Stein, Beth Shay, Joanne Savage, Amy Mix, Rachel Scott, Nancy MacLeod, Michael Froehlich, Rachel Labush, Peter Schneider, Jennifer Levy, Julie Nepveu, Sandy Jolley, and other advocates throughout the country for informing and inspiring us with their ongoing, tireless work on behalf of older homeowners. All errors and omissions remain those of the authors.