Philadelphia Law Would Crack Down on Reverse Mortgage Foreclosures

"A new bill before the Philadelphia city council would close a loophole that its author says unfairly targets reverse mortgage borrowers.

The proposed legislation, introduced by Councilwoman Cherelle Parker, would prevent reverse mortgage lenders from foreclosing upon homes whose owners have entered into payment plans for back property taxes.

“I know all too well the scourge that reverse mortgages have been on certain neighborhoods in the city,” Parker said in a statement announcing the law. “Unfortunately, it has been quite common for reverse mortgage lenders to swoop in and pay off any remaining real estate tax balance of homeowners even if they are in a payment plan and not delinquent — and then use this as an impetus to foreclose on these homeowners.”

Home Equity Conversion Mortgage borrowers are required to maintain property tax payments and homeowners insurance costs throughout the loan, and can face foreclosure if they become delinquent on those payments..."

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