Reverse-Mortgage Defaults Increasing

May 5, 2013
Wall Street Journal  
mortgage lending news

With an increasing number of reverse mortgage borrowers becoming delinquent on these home loans, a little-known federal guideline could give many of them some relief from financial difficulties. Under 2011 guidelines released by HUD, lenders -- prior to initiating foreclosure proceedings -- are required to notify reverse mortgage borrowers who fall behind of free financial counseling. These sessions can help them get back on course financially by tapping benefit programs for some older individuals, among other strategies. Ramsey Alwin, senior director of economic security at the National Council on Aging, laments that many older borrowers unfortunately "don't know about these programs." Of the nearly 600,000 reverse mortgages outstanding, 9.8 percent are presently delinquent -- an increase from 8 percent in 2011.
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