HUD Appeals Non-Borrowing Spouse Ruling
The Department of Housing and Urban development is not giving up without a fight and has appealed the October court decision that found them liable for foreclosing on the homes of non-borrowing spouses whose spouse had a obtained a reverse mortgage.
According to an article published by Reverse Mortgage Daily, the appeal, filed by HUD Secretary Shaun Donovan, was submitted by Assistant Attorney General Stuart F. Delery on November 26.
The plaintiffs, Robert Bennett of Maryland and Leila Joseph of New York, filed the lawsuit against HUD after they foreclosed on their homes when the loan became due and payable upon their their spouse’s passing. Both spouses had their names removed from the home’s title so that their spouses could obtain the most money possible when they applied for a reverse mortgage.
When the plaintiffs won the lawsuit, AARP was hopeful that this ruling would force HUD to find a solution to non-borrowing spouses whose names had been removed from the title. While the appeal is probably not what AARP had in mind, it is within HUD’s rights to fight the decision.
However, I think we’d all be better off finding a solution to the problem instead of waging a war with each other. If consumer protection is the name of the game, then fighting with each other is not the way to find a solution, especially considering that everyone’s circumstances are different.
Personally, I find that waiting until both spouses are of age works best, but even then, some clients prefer to the older spouse is the borrower in order to obtain more money. I think that’s perfectly fine but there are unpredictable circumstances that make bring more hardships later.
A possible solution is refinancing the home with the non-borrowing spouse so that may be able to age in place but this isn’t always possible. The home value may not have risen in value over the years or the expected interest rate has risen above 5.06%. Whatever the reason, refinancing may not longer be possible. That doesn’t mean the non-borrowing spouse should find themselves without a home though.
If you are a non-borrowing spouse it may serve you well to speak with a reverse mortgage expert and discuss your options, especially if your spouse is already a borrower. If you are of age already, you may want to consider refinancing with your spouse just in case.
There will need to be a clear cut solution in the future for non-borrowing spouses, here’s hoping the solution comes sooner rather later.