Homeowners in Default on Reverse Mortgage Loans Can Call CredAbility for Free Financial CounselingThursday, January 27, 2011

Many Homeowners with Reverse Mortgage Loans Owe Taxes, Insurance Payments; Nonprofit Counselors Can Help Them Determine Options to Avoid Foreclosure

ATLANTA – Homeowners with reverse mortgage loans who are in default on their property taxes or homeowners’ insurance payments can contact CredAbility to receive free financial counseling.

This relatively new mortgage product – the reverse mortgage or Home Equity Conversion Mortgage (HECM) – is only available to homeowners age 62 and older. It has enabled many seniors to remain in their homes, in spite of significant financial burdens, such as sudden or significant medical expenses.

One stipulation of these loans, however, is that the homeowner must remain current on taxes and property insurance. Today, it is estimated that 30,000 homeowners nationwide with reverse mortgages are in default.

During the past few years, some lenders have advanced property taxes, insurance and other property charges to borrowers who were unable to pay them. However, the US Department of Housing and Urban Development (HUD), which insures these mortgages, is now requiring lenders to collect these payments. Borrowers who are unable to repay these advances may be in jeopardy of losing their home through foreclosure action.

Between late January and early April, homeowners will be sent a letter explaining that they are in default, advising them to call a nonprofit reverse mortgage counseling agency.

CredAbility is one of only five national nonprofit housing counseling organizations approved by HUD to provide free counseling to any homeowner struggling with these tax and default issues. Homeowners can schedule an appointment with a reverse mortgage counselor by calling CredAbility at 888.395.2664. They can also learn more about CredAbility at www.CredAbility.org.

“Reverse mortgage counselors at nonprofit housing counseling agencies have special training in these unique products, and can help homeowners understand all of their options when faced with the possibility of foreclosure,” said Michelle Jones, senior vice president of Counseling for CredAbility. “We will review each homeowner’s financial situation in detail, explaining the options that may be available to them to help save their home. We provide education on the process and recommended action steps based on their individual needs and goals.” In addition, for consumers who need help paying utilities, buying low-cost groceries, or meeting other essential needs, CredAbility counselors can help consumers locate these resources through referrals to other human service agencies.

Homeowners can call CredAbility 24 hours a day, seven days a week to schedule an appointment with a housing counselor.