HUD: LGBT Protections ‘Baked Into’ Reverse Mortgage, Housing Programs

In the wake of the landmark Supreme Court ruling late last month, which gave same-sex couples the right to marry nationwide, organizations and agencies across the country have had to adjust their policies to accommodate expanded protections and opportunities for the LGBT community.

But one agency won’t have to alter any of its books: the Department of Housing and Urban Development (HUD). That’s because it already has protections built into its policies for all housing programs, including the reverse mortgage program, a spokesman tells RMD.

“Equal access for all persons is baked into all of HUD’s programs already so there’s no need to extend these important protections in the wake of the Supreme Court’s ruling,” HUD spokesman Brian Sullivan says.

In fact, in February 2012, HUD published a final rule titled “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” — otherwise known as the “Equal Access Rule” — which ensures that housing across agency programs is open to all eligible individuals without regard of sexual orientation, gender identity or marital status.

Again earlier this year, HUD issued Mortgagee Letter 2015-05 to increase awareness of the Equal Access Rule, while revising certain definitions and adding provisions.

And as part of Monday’s White House Conference on Aging, a once-a-decade event that’s been credited for giving birth to such programs as Medicare and Medicaid, HUD issued further guidance to better serve and help avoid discrimination to LGBT Americans seeking HUD-assisted or HUD-insured housing.  The guidance is intended to help clarify the Equal Access Rule.

“Every American deserves to live with dignity, regardless of who they love or who they are,” said HUD Secretary Julián Castro, in a statement. “HUD is committed to fighting unjust discrimination and to expanding housing opportunity for all.”

Under other federal regulation, such as the Fair Housing Act, the LGBT community is not a protected class. While that law protects individuals from housing discrimination based upon their race, religion, gender, color and national origin, it is silent on their sexual orientation or gender identity.

Despite this, HUD has rules of its own that protects the LGBT community. And those rules also apply to the reverse mortgages program.

In early June, HUD issued Mortgagee Letter 2015-15, which expanded options for reverse mortgage non-borrowing spouses, and provided protections for same-sex couples.

The mortgagee letter states that a non-borrowing spouse could remain in their home following the death of the reverse mortgage borrower if they were “engaged in a committed same-sex relationship with the borrower akin to marriage but were prohibited under state law from legally marrying the borrower at the time of the loan’s origination, but became legally married prior to the death of the borrower.”

For reverse mortgage lenders, the Supreme Court ruling is welcome news.

“Overall, I see it as a positive thing,” says Mike Gruley, director of reverse mortgage operations at 1st Financial Reverse Mortgages, a division of Success Mortgage Partners.

The high court’s decision might even give way to a fairly untapped reverse mortgage market, given that roughly 15% of same-sex couples in the U.S. were householders age 65 and older in 2013, according to the most recent data available from the Census Bureau’s American Community Survey (ACS).

“A reverse mortgage makes sense [for this demographic] because a lot of them have no heirs,” says Greg Shearer, a loan officer with Senior Equity Group Inc., who directly targets the LGBT market. “I think it’s a great product for that particular community, and I don’t think it has reached its potential.”

Written by Emily Study

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