Litigation involving reverse mortgages is prevalent, yet many plaintiffs' attorneys misunderstand the FHA Home Equity Conversion Mortgage (HECM) program’s regulatory framework. This government-regulated program mandates servicers to adhere to strict compliance guidelines, including borrower counseling sessions and notices. By demonstrating compliance, servicers can effectively counter litigation claims. Additionally, issues such as non-borrowing spouse rights are addressed through options like the Mortgagee Optional Election (MOE) assignment, allowing non-borrowing spouses to retain homes after the borrowing spouse's death, thereby resolving disputes amicably.
While understanding that the Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM) program serves a vulnerable population, these attorneys tend to overlook the nature of the program itself.
By following for compliance, you're able to demonstrate very credibly to plaintiff's attorneys that this was done exactly as the government required...the government believes is beneficial to that population.
In a lot of the situations that we've seen, it's been foreclosure filed due to the death of the borrowing spouse...MOE assignment program to resolve the litigation.
The Mortgagee Optional Election (MOE) assignment, introduced in 2015, is a chief example...resolves the foreclosure issues for non-borrowing spouses.
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