The communities engulfed in the Los Angeles-area wildfires continue to recover and pick up the pieces. And representatives of Los Angeles County have signaled they want to provide specific guidance for impacted reverse mortgage borrowers to navigate issues that arise with these loans in disaster areas.
The county’s Aging and Disabilities Department will host a special event on Saturday, May 10. The event is designed to help older Americans whose homes were damaged by the Eaton Fire, and who may be facing property damage or loss while maintaining a Home Equity Conversion Mortgage (HECM).
“The workshop will help participants take the first steps to better understand their existing reverse mortgage agreements and the financial and legal implications tied to disaster-related property damage,” according to an announcement distributed by the Arcadia Chamber of Commerce.
The event will take place at the MonteCedro Senior Living Community in Altadena on May 10 Saturday from 10 a.m. to noon local time. It will include a group workshop led by Aimee Williams, associate vice president of justice for tenants, homeowners and unhoused individuals at Bet Tzedek Legal Services in Los Angeles.
“Ms. Williams will provide critical guidance and answer questions related to reverse mortgages in the context of disaster recovery,” the announcement explained. “There will also be representatives from various housing and legal services agencies — including the Federal Housing Administration (FHA), U.S. Department of Housing and Urban Development (HUD), and pro bono legal private firms — on hand to help with more individualized consultations.”
Kathryn Barger, the chair of the Los Angeles County Board of Supervisors, said that reverse mortgage borrowers are in particularly unique circumstances as they aim to recover from the devastation of the fires.
“Seniors navigating the aftermath of the Eaton Fire shouldn’t have to face uncertainty alone — especially when it comes to complex issues like reverse mortgages,” Barger said.
“That’s why I’ve brought together the Los Angeles County Department of Aging and Disabilities, the Los Angeles County Development Authority and the Department of Consumer and Business Affairs to partner with local experts for this workshop.”
The overarching goal is to “offer clarity, guidance and trusted advice to help seniors make informed decisions during a challenging time,” she added.
Barger added it’s critical for reverse mortgage borrowers to know that there are resources they can call on if needed.
“We need to ensure older residents in our community know they’re not alone,” she said, according to a report by the Colorado Boulevard. “Recovering from a disaster is hard enough. Understanding reverse mortgages and legal obligations shouldn’t add more stress. That’s why we’re bringing experts together to offer meaningful, hands-on support.”
In the immediate aftermath of the fires, representatives from reverse mortgage lenders and servicers told HousingWire’s Reverse Mortgage Daily (RMD) that it’s imperative for borrowers to let their servicer know about anything that could impact the occupancy of their property due to the terms of FHA-backed reverse mortgages.
This led to guidance on the issue from the National Reverse Mortgage Lenders Association (NRMLA), L.A.-area based lenders HighTechLending and New American Funding (NAF), and individual loan originators who were in contact with their impacted clients.
Jared Skrabala, who oversees servicing and asset management at Reverse Market Insight (RMI), told RMD that “HUD does not require servicers to follow separate occupancy requirements for natural disaster victims; however, they do provide some relevant guidance for servicers on properties impacted by a Presidentially-Declared Major Disaster Area (PDMDA).”
According to data from HUD, there are more than 5,000 HECM originations and nearly 4,600 endorsements in the Los Angeles-Long Beach-Glendale metropolitan statistical area. California has long served as the most dominant state in the country for reverse mortgage business.
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