How can I prevent foreclosure with a reverse mortgage?

Many senior homeowners with reverse mortgage loans are at risk of foreclosure, often because of non-payment of taxes or property insurance. Check out these tips and facts to better protect your home against foreclosure when you have a reverse mortgage.

• Your lender could foreclose on you if you don’t pay your property taxes, homeowner’s insurance, condo or homeowner association fees, water and sewer charges or flood insurance. If you’ve fallen behind, you may be able to get back on track with emergency assistance or a repayment plan.
• Reverse mortgage borrowers must continue to occupy the home (with exceptions for medically-related absences). If you fail to do so, or to submit paperwork to your lender confirming that the home remains your principal residence, your lender can try to foreclose on your home.
• Before a lender can start a foreclosure case in court, it must send you a special reverse mortgage “pre-foreclosure notice” at least 90 days before going to court. If you get a “90-Day Notice” seek help as soon as possible. Free housing counseling or legal advice may be available.
• If you get court papers from your reverse mortgage lender, you have the right to “answer”—to respond in writing and tell the court your side. There may be important legal defenses to the case which can be lost if you do not “answer” the court case promptly. Additionally, if the lender has not complied with New York consumer protections for reverse mortgage borrowers, you might have a claim for damages against your lender. So it is important to seek help and have your case evaluated right away!
• Reverse mortgage borrowers (and in some cases their heirs, if the borrower has died) have a right to a settlement conference in court, where it may be possible to negotiate a solution. If you receive notice from the court scheduling a settlement conference, do not ignore it! At your first settlement conference, you will have one more opportunity to “answer” the complaint, and help may be available to help you “answer” the complaint.
• If you think your lender is making mistakes with your account, you have the right to require that your lender investigate those mistakes and report to you on its investigation. 

For free legal help, call Legal Services NYC at 917-661-4500 Monday through Friday from 9:30 a.m. to 4 p.m. Learn more about our intake process here.

* The information does not constitute legal advice. You should always consult an attorney regarding your matter. Legal help subject to capacity and location.