Foreclosures of Conventional Mortgages May Be At A Standstill But Not So For Reverse Mortgage
The COVID-19 pandemic has resulted in a vast change of scenery for the world. The legal field is not exempt from the pandemic’s impact.
While moratoriums were put in place to keep mortgage servicers and lenders from filing foreclosure actions, this only applied to certain mortgage types.
Ironically, the most vulnerable population - the elderly - were faced with the unabated and unrestricted filing of foreclosure actions on their reverse mortgages. The major issue with reverse mortgages rests with the grounds upon which a servicer/lender may be permitted to call the loan due, as known as foreclose on the property.
Generally speaking, there are three (3) ways a servicer/lender can foreclose on a reverse mortgage loan: 1. A borrower passes and there is no other surviving spouse who is a borrower on the loan; 2. A borrower fails to pay the taxes and/or insurance; or 3. A borrower fails to occupy the property as his/her principal residence.
The majority of the issues arise in the third (3rd) ground for reverse mortgage foreclosure actions being filed. Many times, the servicer/lender relies on faulty “intel” as to the occupancy status of the property. In many instances, the servicer/lender will commence the action only to find out that the borrower resides at and has always resided at the mortgaged property.
Should one find himself/herself in a situation where he/she resides at the mortgaged property yet the foreclosure action is filed on the basis that the borrower “moved-out” or no longer occupies the mortgage property, The Town Law will be eager to provide a gratuitous, cost-free consultation. After reviewing the case in detail, the borrower will be informed whether or not there is a basis for the attorney to contest the action filed against the borrower as well as seek to have the servicer/lender be liable for the attorney fees, costs, and any damages incurred by the borrower. This will allow for the us to handle your case with no costs out of your pocket.
Legal representation is vital in dealing with reverse mortgage foreclosure actions. Here at The Town Law, we take a special interest and have successfully handled actions where the foreclosure action was improperly brought against a borrower.
We can be reached at 917-974-6091. We have attorneys licensed in New Jersey and Pennsylvania. Call us today.