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Legal Aid

Dear Ms. Smith,

This letter is to confirm the assistance and advice I have provided in your case, and to confirm that your file will be closing in two weeks, if you do not decide to follow the resolution I have obtained for you. As you know, you contacted our office concerning the funds that should be available for you to draw on your reverse mortgage. You are one of a few reverse mortgage homeowners who have had their loan for such a long time and have not yet exhausted the available line of credit funds. However, because the balance of of your loan has growing more than anticipated at the time the loan was originated, the loan balance is now far more than the amount originally listed in the security deed. Accordingly, HUD, as the owner of the loan has refused to allow you to draw any additional funds.

I research the terms of the loan, which anticipate  this type of event and the solution. Under the loan agreement, you sign, when the balance of the long gross be greater than the amount and the security listed, the lender, ,(here HUD) can require you (as a Borrower) to sign an extension agreement to increase the amount listed in the security instrument. The purpose of this is to ensure that HUD (as a lender) maintains a security interests in the property against additional advances of funds on your line of credit.

Because this is an unusual circumstance that has not been dealt with before. I had to do a lot of

advocacy with HUD, and prepare an extension agreement on your behalf to submit to HUD as a solution contemplated by your loan agreement. I discuss with you the solution I was proposing and my efforts on your behalf. Hud finally agreed and signed the extension agreement. However, when I met with you to review and sign the agreement, and in falling up conversation, since then, you have indicated that you are not willing to sign this agreement.

As we have discussed, come the reverse mortgage contract contemplated the signing of this agreement, and you refuse to do so means that HUD will be justified in continuing to refuse to make any additional advancements on your line of credit. Credit. I urge you to cooperate with signing this agreement, as you promise to do so when you sign the first mortgage. The extension agreement does not change anything else about the terms of the loan, other than your ability to again make drawers request on your available credit line. The extension agreement only concerns that the reverse mortgage on the property will continue to grow to be more than the amount of 157,500 as the original listed. I chose a new maximum amount of $450,000 as a high number to allow for continuous new growth. Are your loan balance and your additional draws on your credit line, in order to give you a loan plenty of room to grow so you don't run into this issue again. Signing this extension agreement does not change the balance of the loan. I sincerely believe that signing the extension agreement is in your best interest, and would not recommend that you sign it otherwise.

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As we have discussed, your refused to sign this extension agreement (which you promise to  cooperate in doing when you sign the original reverse mortgage document) will undermine any future claim you might want to raise against HUD in this matter. If you make any further complaints, HUD will only respond that they provided you the extension agreement as required by the contract, that you refuse to sign and breach of your promise to do so, and that they are not required to disburse any additional funds to you due to your refusal to corporate. 

In our last conversation, you and I discuss all of these points, but you still said that you would not sign the extension agreement. As a matter of principal. I urge you to reconsider; so that you can draw the remaining funds that should be available to you on the loan. I will keep your case open for two more weeks, until October, the 8th, 2021, and the hopes that you might change your mind. If you have not agreed by that date to move forward with signing the agreement, then there will be nothing further for me to do on your behalf and I will be closing your file once your file is closed. The document and information will remain on file for a period of 7 years, after which time they will be destroyed to protect your privacy. If you have any questions you would like do to discuss father You are welcome to contact me. 

Sincerely, 

Rachel Scott

Attorney