AARP has filed suit against the Department of Housing and Urban Development with respect to how HUD treats reverse mortgages. A reverse mortgage allows a person over age 62 to borrow against the equity in their home in either a lump sum or monthly payments, and continue to reside in the home. AARP alleges that HUD has changed the rules with respect to surviving spouses who still live in their homes, but who were not on the loan documents. Many of these homeowners are facing foreclosure because their home values have dropped, and the value of the reverse mortgage is greater than the worth of the home.
NY Times
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