Fewer than 250 senior homeowners approved for reverse mortgage help

Sept. 03--Fewer than 250 of Florida's senior homeowners have been approved for a reverse mortgage assistance program since the debut of the $25 million plan in November as officials work to increase awareness and help with applications.

The Elderly Mortgage Assistance Program, or ELMORE, is one of five foreclosure prevention options under Florida's$1 billionHardest Hit Fund. It is expected to reach an estimated 2,500 homeowners, who can receive up to $25,000 to pay such housing-related expenses as taxes, community association dues and insurance.

Through August, 245 seniors were accepted into the program statewide, receiving a total of $3.28 million, or an average of $13,136 each.

About 1,760 seniors had applied through April, including 140 Palm Beach County homeowners.

Reverse mortgages, available to people at least 62 years old, allow seniors to convert their home equity into cash, paying out either in a lump sum or monthly installments. But borrowers remain on the hook for other property costs. Not paying those expenses can lead to foreclosure.

"Our goal is to keep people in their homes as long as possible, and that whole mission is predicated on there being a home," Florida Department of Elder Affairs Secretary Charles Corley said at ELMORE's launch last year.

But working with the senior community can be challenging, including making homeowners aware of the program and gathering application information, said Kim Clawson, director of the Helpline at the Aging and Disability Resource Center in West Palm Beach.

The center, part of the Area Agency on Aging, is brainstorming ideas with the Florida Housing Finance Corporation on how to increase ELMORE participation. Florida Housing oversees the Hardest Hit Fund.

Although seniors can apply for the program by phone, getting bank account documents, mortgage statements and other financial records assembled to qualify can be difficult.

"We're still trying to determine how best to assist people with this," Clawson said. "There are probably going to need to be people who can go into the homes and help seniors gather proof of income and find the required documentation."

About 73,000 Florida homeowners have a reverse mortgage, according to the U.S. Department of Housing and Urban Development. There are an estimated 582,000 reverse mortgages nationwide.

Reverse mortgages can be a boon for some homeowners who want to use the money they've built up in equity for their retirement and defer payment until they die, move, or sell the home. Because it is a non-recourse loan, the lender cannot seek repayment from any source other than the property.

But the Consumer Financial Protection Bureau has warned that homeowners largely don't understand reverse mortgages. They are taking them out at younger ages, leaving them fewer resources to pay for expenses later in life.

And more borrowers -- 70 percent -- take the lump sum payout rather than an income stream, which can put them at risk of defaulting on future insurance and tax payments.

The Elderly Mortgage Assistance Program can be applied for only by phone at 800-601-3534, but more information can be found online at www.floridaelmore.org.

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