Seniors Rejoice As Reverse Mortgage Foreclosures Face New Restrictions In The City Of Brotherly Love
Unpaid taxes are one of the most common excuses lenders give for initiating reverse mortgage foreclosures. Yet, lenders don’t take into consideration that most counties or major cities allow people to pay their taxes in installments.
It also seems like lenders don’t realize payment plans are common in major cities. Especially for seniors with reverse mortgages and people with serious health issues.
Unfortunately, most reverse mortgage servicers don’t care about the payment arrangements made by the municipality. Mortgage servicers will use the unpaid portion of the tax bill as an excuse to foreclose.
Philadelphia is about to put a stop to this shady practice by mortgage servicers. Philadelphia City Councilwoman Cherelle Parker has introduced a bill that would prevent the spread of reverse mortgage foreclosures in the city.
The bill states that a reverse mortgage borrower is not considered delinquent on real estate taxes if they are in a payment arrangement with the city.
As a result, her bill closes the loophole lenders use to exploit in order to foreclose on reverse mortgage borrowers.
Parker said that reverse mortgages have been a scourge in some of the city’s neighborhoods because of the unscrupulous practices of mortgage servicers.
Unpaid taxes are one of the many ways seniors find themselves in foreclosure with a reverse mortgage. A reverse mortgage does not require a homeowner to pay a mortgage payment. Yet, a homeowner must maintain the property and pay the taxes.
Many times seniors pay the taxes but the servicer doesn’t always properly apply the payment to the transaction history. As a result, the mortgage servicer’s payment history doesn’t match the information from the county or local taxing authority.