Rep. Neguse asks federal housing officials to protect Marshall Fire victims from foreclosure risk

By: - March 17, 2023 3:40 pm
Marshall Fire aftermath

Laurie Silver of Lafayette takes in what remains of her cousin’s condo in the aftermath of the Marshall Fire on Dec. 31, 2021, in Louisville. (Marc Piscotty/Getty Images)

U.S. Rep. Joe Neguse of Colorado is asking housing officials to update federal mortgage guidelines that are leaving Marshall Fire victims at risk of foreclosure.

In a letter sent this week to Federal Housing Administration Commissioner Julia Gordon, Neguse, a Lafayette Democrat, requested that the agency change its Home Equity Conversion Mortgage occupancy requirements for victims of natural disasters like the Marshall Fire. HECMs are federally insured reverse mortgages available to people aged 62 and up, and borrowers are required to live on the property as a primary residence.


Current regulations for HECM loans say that if the borrower does not live on the property for more than a year, mortgage companies are able to foreclose and sell the property, regardless of the reason. Neguse’s letter said occupancy requirements are the reason behind most HECM defaults.

“Over a year later, many of my constituents are still unable to return to their homes because they are either under construction or in the process of selling the property,” Neguse said in the letter. “Regardless of these special circumstances, individuals with a HECM reverse mortgage are at the risk of foreclosure on account of current Department of Housing and Urban Development (HUD) guidelines. In fact, one Marshall Fire victim in this position has already been subject to foreclosure.”

He asked the FHA to consider updating current guidelines to allow for a “situational prohibition” on foreclosure for Marshall Fire victims and those in similar circumstances from future disasters. 

“Natural disasters have the power to reshape our communities for years to come,” Neguse wrote. “Many families and senior citizens in my district are still recovering from the Marshall Fire. They should not face reverse mortgage foreclosures while acting in good faith to either rebuild or sell their property.”

CBS Colorado reported on one 80-year-old victim’s experience wherein his house was at risk of being foreclosed on because of conditions in his reverse mortgage agreement. The company decided to rescind the foreclosure because of the circumstances. 

The Marshall Fire, the most destructive blaze in Colorado’s history, started on Dec. 30, 2021, destroying nearly 1,100 homes and businesses in Boulder County and killing two people.


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Lindsey Toomer
Lindsey Toomer

Lindsey Toomer covers politics, social justice and other stories for Newsline. She formerly reported on city government at the Denver Gazette and on Colorado mountain town government, education and environment at the Summit Daily News.