AARP sues Obama Administration over reverse mortgage policy change [View All]

[Bluebear]

The largest advocacy group for U.S. seniors sued the Obama administration on Tuesday over policy changes it says make it easier for older Americans to lose their home to foreclosure.

AARP, formerly known as the American Association of Retired Persons, sued Housing and Urban Development Secretary Shaun Donovan in federal district court through its charitable arm, the AARP Foundation, on behalf of three homeowners facing foreclosure and then eviction.

"HUD changed the rules in the middle of the game without following federal law and told people they had to pay far more than they were promised," said Jean Constantine-Davis, a senior attorney at the AARP Foundation...

"HUD has basically ignored the protections guaranteed for spouses of borrowers as well as the borrowers themselves," Constantine-Davis said. A stranger, perversely, could purchase the home that was worth less than the loan amount for market value and the FHA insurance fund would kick in the difference.

http://www.reuters.com/article/2011/03/08/us-usa-housing-seniors-idUSTRE72773820110308