Unpaid taxes and insurance led to 13,000 reverse mortgage loan defaults
09/27/2010
By Credit.com Staff
The subprime crisis sparked millions of foreclosure filings - including mortgage loan default notices, schedule auctions and bank repossessions - that continue to affect countless homeowners. But a new report shows the reverse mortgage industry is seeing its default rates grow, largely as a result of unpaid property taxes and insurance.
The Department of Housing and Urban Development, which conducted the report, told Senior Housing News they have tried to defer foreclosures for elderly homeowners. However, the Department issued an alert notifying mortgage loan guarantors that they will not accept foreclosure deferrals for homeowners that have failed to pay taxes and insurance after April 30, 2009.
Although unpaid taxes have resulted in nearly 13,000 reverse mortgage defaults, the HUD has no procedure for handling reverse mortgage loans that are in default due to taxes.
Older Americans have been largely impacted by the economic collapse and recession, and many lost their retirement and savings funds. As a result, more older Americans have been forced to delay retirement and return to work.
