Judge Suspends Crackdown on Estate Planners
A federal judge here Friday blocked new housing Secretary Andrew M. Cuomo from trying to stop companies from charging elderly homeowners excessive fees for information about reverse mortgages that they could get from the government for free.
U.S. District Judge Harold H. Greene issued a preliminary injunction halting the Department of Housing and Urban Development’s month-old crackdown on “estate planning companies,” saying the agency failed to follow proper federal rule-making procedures.
“HUD officials claim that they intended to protect those senior citizens, a laudable intent, but they have done so in the wrong manner,” Greene said in his 14-page order in favor of Patriot Inc., a San Juan Capistrano-based firm that offers estate and financial planning to senior citizens.
The ruling was a setback for Cuomo, who took office two months ago.
At a highly publicized news conference March 17, Cuomo warned lenders that they would lose the right to make Federal Housing Administration-insured loans if they did any business with “estate planning” companies that charged consumers large fees for referrals to lenders issuing FHA-backed reverse mortgages.
Reverse mortgages are designed to aid cash-strapped elderly homeowners who owe little or nothing on their homes.
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