Senators Want Trump to Uphold Eviction Protections for Seniors

WASHINGTON – Sens. Marco Rubio (R-Fla.) and Catherine Cortez Masto (D-Nev.) last week asked that the Trump administration refrain from altering eviction protections for seniors who hold reverse mortgages on their homes.

As recently as 2015, reverse mortgage regulations dictated that if the owner of the loan died, the loan was immediately due, meaning the surviving spouse had to pay in full or face eviction. The Federal Housing Administration has since reformed its reverse mortgage program, allowing for displacement protections, so long as the so-called “non-borrowing” spouse maintains the property and pays taxes and insurance.

Rubio and Cortez Masto noted last week in a letter to Housing and Urban Development Secretary Ben Carson and Office of Management and Budget Director Mick Mulvaney that President Trump’s fiscal 2018 budget proposes altering the reverse mortgage program. The senators asked that the administration leave the safeguards in place, provide verification that it’s fulfilling the request and submit additional information about provisions on the president’s fiscal year 2018 budget proposal.

Rubio’s state has particular interest in reverse mortgages, as Florida has the greatest percentage of elderly residents.

“While reverse mortgages can provide an important source of financial security for seniors by allowing them to tap the value of their home and age-in-place, they have also raised a number of concerns,” the letter reads. “Given the gravity of potential changes to this law, we therefore request a written response outlining the rationale underlying this proposed change. We also urge that you continue to ensure that widows do not face eviction in these circumstances.”

Based on eligibility requirements for the program, the non-borrowing spouse, in order to remain in the property for life, must obtain or be able to obtain a marketable title for the property within 90 days of their spouse’s death.

Richard Glover, director of the reverse mortgage division at American Fidelity Mortgage, said in an email Monday that the Trump administration’s budget proposal would codify current HUD guidelines relative to non-borrowing spouses. He added that Rubio and Cortez Masto’s concerns have been addressed.

Jessica Eden, a branch manager at AmCap Mortgage who has spent six years working with reverse mortgages, said that the program reforms have allowed for smoother conversations with seniors who might be nervous about the loan process. Before the reforms, couples were required to have a letter from an attorney stating that both spouses understood the consequences if one spouse were to pass away, she said. The potential changes cited in the senators’ letter are both “fascinating and scary,” she added.

“So if (the administration) is changing it so that it doesn’t protect the non-borrowing spouse, then there’s definite issues,” she said. “Definitely some concern there.”

So long as the surviving spouse is maintaining the program, Eden said there should be no issue in that person staying in their home, though they might not be entitled to additional funds that the deceased spouse was receiving through the reverse mortgage.