WASHINGTON — The Department of Housing and Urban Development is implementing reforms to its reverse mortgage program and providing more counseling resources for seniors who are considering the product, Secretary Ben Carson said Monday.
As reverse mortgages have become more popular, "we have learned more about the needs of seniors," Carson said.
The additional funding for counseling will help more people age in place, he said. "There will be more financial freedom, more responsible practices and greater security for seniors," he said.
HUD first introduced a reverse mortgage product called the Home Equity Conversion Mortgage in 1987. But the housing crisis exposed several problems with the program that needed to be corrected, Carson told the Leading Age Florida Convention and Exposition.
"For example, some seniors accessed the maximum amount of their equity upfront, leaving them without sufficient resources to pay their taxes or insurance," Carson said. "Some borrowed so much they were unprepared for the financial turbulence in 2008."
Adjustments were made and HUD finalized a new HECM rule in January.
"We are implementing these changes between now and September, and will provide guidance to help lenders and service providers. Loan documents will be updated and system requirements will reflect these changes," Carson said.
Carson also noted that one of the leading causes of disability and death for seniors is injury from a fall. "Approximately one-third of adults age 65 or older fall in their homes. One-third," he stressed.
HUD released a report last month about the health of seniors and preventing falls.
"We found that many strategies were overlooked, especially in the design of affordable care facilities, assisted living facilities, and other buildings. So, we recommend that government at all levels and philanthropic organizations integrate fall prevention strategies and support efforts in every situation to help seniors stay safely in their homes," Carson said. "They also must remain safe in every building outside the home."