Surviving Spouses File Reverse Mortgage Lawsuit Against HUD

Four surviving spouses of reverse mortgage borrowers filed a lawsuit this week against Department of Housing and Urban Development Secretary Shaun Donovan claiming they faced undue harm due to reverse mortgage statute.

The lawsuit comes several months following a previous suit filed by AARP on behalf of non-borrowing spouses of reverse mortgage borrowers, in which a court ruled against HUD and granted relief to the plaintiffs, to be determined by the agency. HUD appealed the ruling, but the appeal was later thrown out.

The new suit seeks relief for a class of borrowers who faced situations similar to those detailed in the earlier lawsuit; namely those who faced foreclosure of their homes because they had been removed from the home title or were not named on the title prior to the closing of the reverse mortgage and had survived their borrower-spouses.

Plaintiffs Charlie Plunkett of Miami, Florida; Winnie Barlock of Las Vegas; Clarisa Welte of Temecula, Calif.; and Roselaine Labonte of Haverhill, Mass., “challenge HUD’s failure to protect them and other surviving spouses of reverse mortgage borrowers from foreclosure and displacement, as required by the reverse mortgage statute,” according to the filing.

The plaintiffs are represented by the AARP Foundation Litigation, which also represented plaintiffs in the past related case, and are seeking relief for themselves as well as those who are similarly situated but who are not named in the case.

“The motion is filed under federal law to say whatever relief these folks [in the past case] are getting will be extended to those similarly situated,” says Craig Briskin, an attorney representing the plaintiffs.

HUD has not specified relief in the previous case.

The class is not yet certified or named, but the filing states there could be thousands of individuals who have faced similar situations.

Written by Elizabeth Ecker

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