AARP Claims Victory in Reverse Mortgage Lawsuit

The AARP claimed a “win” its case against the Department of Housing and Urban Development (HUD), following a federal court’s ruling earlier this week in favor of two non-borrowing reverse mortgage spouses.

This week, a federal trial court in Washington, D.C., ruled that HUD violated federal law when it did not protect surviving spouses of reverse mortgage holders, according to an article from AARP.

Represented by the AARP Foundation Litigation, the plaintiffs in the case had their names taken off the deeds to their homes so that their spouses could obtain the reverse mortgage, leaving them to incur the debt of the loan when their spouses died or face foreclosure. 

AARP argued that forecloses were illegal because HUD’s regulations and mortgage documents conflicted with a law Congress passed authorizing the federal reverse mortgage program.  

“The court’s decision is clear that the law gives our clients and others like them protection from foreclosure,” said Jean Constantine-Davis, a senior attorney with AARP Foundation Litigation. “We are hopeful that HUD will act quickly to broadly implement this protection.”

The D.C. court told HUD that it had to find a way to fix the problem, though it is unclear how the agency will do that. One thing is for certain, according to AARP, in that spouses will not have to worry about losing their homes when their reverse mortgage-holding spouse dies.

Read the AARP article.

Written by Jason Oliva

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