WASHINGTON–Two U.S. senators are asking questions around a small change in wording that they suggest could undo some protections around reverse mortgages.
At issue is a proposed budget request for the Department of Housing and Urban Development that potentially increases the chances that a surviving spouse who did not sign mortgage documents could lose a home in a foreclosure.
Sending the letter to HUD Secretary Ben Carson and Office of Management and Budget Director Mick Mulvaney were Sen. Marco Rubio (R-FL) and Sen. Catherine Cortez Masto (D-NV) who want to know whether the agency is seeking to reverse an earlier policy change, according to The New York Times.
The senators have yet to receive a response from the housing agency about its intent for reverse mortgages.
“Our sense is it is bad drafting, but when bad drafting goes through, it can lead to bad policy,” Alys Cohen, a staff lawyer in Washington with the National Consumer Law Center, told The New York Times. “And you can lose control of things once you have new language.”
Before a change in policy two years ago, a surviving spouse who had not signed the mortgage document often had to pay what was left on the loan in full or risk being evicted in a foreclosure, noted the Times. In their letter, the senators referred to the old policy as a “loophole” that had “compounded the stress faced by widows and widowers at a time when they were already grieving the loss of their spouse.”