"The court ruled that just because a homeowner has access to funds through a HECM doesn't mean those funds can be garnished until the homeowner actually requests a draw."
"Florida's constitution broadly shields homestead property from forced sale or creditor claims, with limited exceptions, and this protection extends to undisbursed reverse mortgage funds."
"The ruling marks a question of first impression in Florida, offering new legal clarity on how reverse mortgage credit lines are treated in creditor disputes."
Jhelum Enterprises LLC won judgments against Oceanside Automotive Service and Towing LLC, leading to a court ruling on the garnishment of reverse mortgage funds. The court found that funds from a Home Equity Conversion Mortgage (HECM) line of credit are not subject to garnishment until the homeowner requests a draw. Florida's constitution protects homestead property from creditor claims, extending to undisbursed reverse mortgage funds. However, once funds are withdrawn, they lose this protection. The ruling clarifies the treatment of reverse mortgage credit lines in creditor disputes.
Read at www.housingwire.com
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