‘ELMORE’ to Help Florida Residents in Default on Reverse Mortgages

Program using Hardest Hit Funds will be a ‘model’ for other states to follow

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Florida seniors in default on their reverse mortgages because of unpaid property-related expenses can now get relief from the newly announced Elderly Mortgage Assistance Program (ELMORE).

Florida Housing Finance Corp. (Florida Housing), Florida Department of Elder Affairs, Fannie Mae, and other agencies announced the program on Nov. 12. ELMORE will make $25 million from the state’s Hardest-Hit Fund (HHF) available to help eligible homeowners catch up on past-due property-related expenses, such as property taxes, homeowners insurance, and homeowners and/or condo association fees.

“This is an innovative approach and the first time a state has leveraged its Hardest-Hit Funds to help reverse mortgage homeowners,” said Robert Greenbaum, director of Communications and Marketing at Fannie Mae.

Why Florida?

Many seniors in Florida struggle to pay property taxes and homeowners insurance (also called T&I), as required by their reverse mortgage.

“Florida has been hit by hurricanes and natural disasters, and the cost of homeowners insurance there has gone up quite a bit in the last five to10 years, and these folks are hurting,” explained Greenbaum. “These homeowners are typically on fixed incomes.”

ELMORE provides an upfront, forgivable two-year loan of up to $25,000. The money is used to pay past-due expenses and also can be used to pay those expenses going forward for up to 12 months.

In early 2013, more than 15,000 reverse mortgages in Florida were in default, according to data from the U.S. Department of Housing and Urban Development.

David R. Westcott, director of Homeownership Programs at Florida Housing, expects ELMORE to help about 2,500 households, with an average payout of $10,000.

Why Now?

According to Westcott, the idea for ELMORE came about through conversations with stakeholders including reverse mortgage servicers, Fannie Mae, and the state’s Department of Elder Affairs.

The conversations provided a sense of the hardships seniors were facing on their mortgages, he said.

“It was through those conversations that we discovered there were problems with the HECMs (Home Equity Conversion Mortgage) — the reverse mortgages,” Westcott said. Not paying property charges puts a reverse mortgage in default, which can result in the vulnerable senior population losing their homes to foreclosure, he noted.

How to Qualify

To qualify for ELMORE, homeowners must have suffered a hardship, such as emergency medical expenses or home repair costs related to natural disasters. Once they get caught up on payments they need to have the financial wherewithal to make future payments.

Westcott said Florida Housing is very interested in helping people who just need help catching up on past-due expenses. He noted, “We are fairly broad in the types of hardships that will qualify.”

As part of the application process for ELMORE, seniors will be given a free “benefits checkup” to see if they might qualify for other assistance to help with the cost of food or medicine, for example.

Homeowners can find out about their eligibility and apply for ELMORE funds by calling 800-601-3534. This application/information line is open and staffed with live certified ELMORE advisors Monday – Friday, 9:00 a.m. – 8:00 p.m., and on Saturday from 9:00 a.m. – 2:00 p.m. (Eastern Time). More information is also available at www.FloridaELMORE.org or KnowYourOptions.com/reverse.

Notifying Eligible Borrowers

Fannie Mae is working with reverse mortgage servicers in Florida to notify eligible homeowners about ELMORE, Greenbaum said. In addition, Fannie Mae is contacting senior homeowners, with loans owned by Fannie Mae, directly about the program.

Cecka Green, communications director at Florida Housing, noted that the Florida Department of Elder Affairs is helping distribute ELMORE materials using its network of service providers.

“The elderly population tends to be the population that is most taken advantage of by unscrupulous businesses and in some cases the mortgage industry and unsavory people who are trying to scam them,” Green said, adding that the Florida Department of Elderly Affairs is a name seniors will recognize and are likely to trust the program.

Fannie Mae’s Greenbaum sees Florida as a test-bed for how states can use HHF to help reverse mortgage homeowners in T&I default. “Based on the success of ELMORE, we hope to see the idea spread to other states,” he said.

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How are Hardest Hit Funds being used to help borrowers in your state?  Would a program like ELMORE work for you?

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