Don’t Hold your Breath: New York’s Cuomo will make Reverse Mortgage reform a priority — really?

Gov. Cuomo and state lawmakers are finally making reverse-mortgage foreclosure reform a priority this year — following continuing coverage of a crisis by The Post.

Last week, the governor announced plans to provide reverse-mortgage holders the right to a mandatory foreclosure settlement conference with their lender, overseen by the court, just as traditional mortgage borrowers have, and to update regulations to prevent reverse-mortgage foreclosures.

The governor announced these measures amid a raft of new proposals in his State of the State speeches. His reverse-mortgage proposals have similar intent as legislation introduced last year by Assemblywoman Helene Weinstein and state Sen. Jeff Klein in the wake of a July report by The Post about a dramatic spike in foreclosures on reverse mortgages — risky home-equity loans made to senior citizens.

“Attention has been focused, by The Post particularly, highlighting some tragic situations individuals found themselves in, and it has really bumped the problem of reverse-mortgages to one of the top agenda items as we go into the legislative session,” Weinstein said.

Reverse-mortgage loans were created to allow seniors to tap equity in their homes without selling, but have turned into a nightmare for legions of New Yorkers, including Howard Beach homeowner Frederick Feil. Last July, The Post covered Feil’s struggles with his lender, Finance of America Reverse, and servicer, Reverse Mortgage Solutions, to allow him to catch up on payments missed due to illness, and keep his home.

After the story, Finance of America Reverse worked out a deal with Feil and his attorney at JASA Legal Services for the Elderly. His loan has been reinstated and he is up-to-date on property tax payments, but Feil says he’s still in foreclosure hell because Reverse Mortgage Services has not officially discontinued the foreclosure.

“You get nervous wondering what’s going on, is it settled or not? Until I get complete paperwork in my hand … the mortgage company is still driving me nuts,” Feil said.

A spokeswoman for Finance of America Reverse said she expects the necessary paperwork to be completed “in the very near future.” Reverse Mortgage Solutions did not respond to a request for comment.

Klein is drafting other bills aimed at better regulating marketing and origination of reverse mortgages, and improving default procedures. Both he and Weinstein are working on legislation to provide seniors with clear, comprehensive information before they take out reverse mortgages.

With the governor’s support, stronger protections for reverse-mortgage holders — which failed to pass last year — are likely to finally become law. But it’s unclear who will underwrite free legal services like the ones JASA provides once money from the 2012 National Mortgage Settlement — a major source of nonprofit foreclosure-prevention and assistance funds — runs out this fall.

While legislative efforts heat up, the New York State Department of Finance continues its probe of Reverse Mortgage Solutions and Champion’s reverse-mortgage operations in New York state, launched after The Post’s story last July.

2 Responses

  1. These financial institutions are in the business of making money thru deceit and it needs to STOP NOW. Anyone that deals with a lender is a slave to them. They set u up to fail. And to have to maintain insurances because u have a loan especially in florida, the windstorm coverage alone is unaffordable to the average homeowner and they talk about why home ownership is at its lowest. Homeownership has become a neuse around one’s neck. Wheres the pride in that. Dont feel like you havent been successful just because u dont own a home. You are not giving yourself enough credit. Dont make any deals with the devil (crooked, corrupt banksters)

  2. Questions,

    1. What commonalities do a reverse mortgage and a purchase mortgage (reverse purchase & sale into trust) have?

    2. What is the difference between a promisarry note and a mortgage note?
    The Note & Mortgage Note.

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