PHILADELPHIA – Councilwoman Cherelle L. Parker (9th District) today introduced a bill to help prevent the spread of reverse mortgage foreclosures by closing a loophole used by some lenders when a homeowner is in a payment agreement.
The legislation states that a homeowner who is in a payment agreement for real estate taxes on their home shall be deemed not delinquent on his or her real estate taxes, matching new Philadelphia Department of Revenue regulations that went into effect last week. A requirement of reverse mortgages is to remain current on your real estate taxes, and the legislation, which amends the Philadelphia Code, provides further clarification to lenders on a homeowner’s payment status.
“I know all too well the scourge that reverse mortgages have been on certain neighborhoods in the City. Unfortunately, it has been quite common for reverse mortgage lenders to swoop in and pay off any remaining real estate tax balance of homeowners even if they are in a payment plan and not delinquent, and then use this as an impetus to foreclose on these homeowners,” Parker said. “I want to thank housing advocates, such as Community Legal Services, for first raising this issue, and commend Revenue Commissioner Frank Breslin and his team for changing the regulations.”
In 2016, as a result of a resolution introduced by Parker, Council held a hearing to explore the impact of reverse mortgages on Philadelphia homeowners. A recent report by the California Reinvestment Coalition and Jacksonville Area Legal Aid indicated that reverse mortgage foreclosures in the U.S. increased by an astronomical 646 percent in 2016 as compared to the previous seven years.
“It is my hope that these new regulations and my accompanying legislation will protect homeowners by finally putting an end to some of the more unscrupulous practices we have seen from reverse mortgage lenders,” Parker said.
Councilwoman Cherelle L. Parker represents the 9th District, which includes East Mt. Airy, West Oak Lane, East Oak Lane, Lawncrest, Burholme, Olney and parts of Oxford Circle and Logan. She is Chair of Council’s Committee on Labor and Civil Service and Vice Chair of Council’s Committee on Commerce and Economic Development.