The Next Crisis for Puerto Rico: A Crush of Foreclosures
- 6 years ago
The Next Crisis for Puerto Rico: A Crush of Foreclosures
Sara Sefcovic, a Finance of America spokeswoman, said the firm could not speak
about specific cases, but “foreclosure is a last resort for our company.”
She added that the firm is “required to follow federal guidelines for this program
and have virtually no discretion over whether or not to initiate a foreclosure proceeding.”
To file a foreclosure for any reason other than the death of the borrower, a reverse mortgage lender must get
approval from an outside mortgage-servicing firm working for the Department of Housing and Urban Development.
There are 10,000 reverse mortgages in Puerto Rico, and Finance of America controls about 40 percent of the market, according to the Department of Housing and Urban Development, which oversees the government insurance fund
that guarantees a lender will be repaid on a reverse mortgage.
The moratorium imposed by the Department of Housing
and Urban Development on the more than 117,000 mortgages it insures in Puerto Rico, such as the reverse mortgage on Mr. Gonzalez-Lopez’s home, will expire on March 18.
Blackstone owns a company, Finance of America Reverse,
that specializes in a type of home loan called a reverse mortgage, which is guaranteed by the federal government.
Many offshore lenders like Finance of America file foreclosure lawsuits in federal court
in San Juan, where proceedings move much faster than in the island’s territorial courts.
Sara Sefcovic, a Finance of America spokeswoman, said the firm could not speak
about specific cases, but “foreclosure is a last resort for our company.”
She added that the firm is “required to follow federal guidelines for this program
and have virtually no discretion over whether or not to initiate a foreclosure proceeding.”
To file a foreclosure for any reason other than the death of the borrower, a reverse mortgage lender must get
approval from an outside mortgage-servicing firm working for the Department of Housing and Urban Development.
There are 10,000 reverse mortgages in Puerto Rico, and Finance of America controls about 40 percent of the market, according to the Department of Housing and Urban Development, which oversees the government insurance fund
that guarantees a lender will be repaid on a reverse mortgage.
The moratorium imposed by the Department of Housing
and Urban Development on the more than 117,000 mortgages it insures in Puerto Rico, such as the reverse mortgage on Mr. Gonzalez-Lopez’s home, will expire on March 18.
Blackstone owns a company, Finance of America Reverse,
that specializes in a type of home loan called a reverse mortgage, which is guaranteed by the federal government.
Many offshore lenders like Finance of America file foreclosure lawsuits in federal court
in San Juan, where proceedings move much faster than in the island’s territorial courts.