ELDER LAW NEWS
On April 4, HUD published Mortgagee Letter 2011-16 which reimposed its original non-recourse policy for the Home Equity Conversion Mortgage (HECM) reverse mortgage program. Now the HECM borrower or their estate
is protected by the non-recourse provision of the program no matter who purchases the home at the time of repayment, even if that homebuyer is a surviving spouse, family member or relative.
Mortgagee Letter 2011-16 rescinds Mortgagee Letter 2008-38 (issued in 2008) which limited the non-recourse feature to arms-length purchases.
This policy shift most likely occurred as a result of the recent suit filed against HUD by the AARP.
This is great news for HECM borrowers and their families.
Thanks to NAELA for this update!