CFPB calls out reverse mortgage servicing problems
As part of its ongoing effort to keep tabs on loan servicers, the Consumer Financial Protection Bureau released a report this week that highlighted problems with the servicing of reverse mortgages. According to the bureau, a recent examination brought to light the fact that some reverse mortgage servicers have issued misleading statements to the heirs of deceased reverse mortgage borrowers. When a borrower passes away, the servicer is required to contact the heirs to notify them of their right to repay the loan or place the property up for sale. Alternatively, the property moves into foreclosure. In this instance, the Department of Housing and Urban Development allows for up to two 90-day extensions to grant the heirs time to make a decision.