The reverse mortgage sector has faced some criticism over the years for foreclosure cases. Now, a Philadelphia bill proposed by the city council is taking aim at "unfairly targeted reverse mortgage borrowers."
“I know all too well the scourge that reverse mortgages have been on certain neighborhoods in the city,” said Councilwoman Cherelle Parker, who introduced the legislation, according to Reverse Mortgage Daily.
“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.”
Foreclosure is implemented on Home Equity Conversion Mortgage borrowers if they become delinquent on payments for property taxes and homeowners insurance cost, according to the report.
The report continued to cite various cases that have been opened up against reverse mortgage lenders as well as statistics that showed a 646% increase in reverse mortgage foreclosure transactions.
To learn more about the bill and what could happen if it is passed, click on the image above.