The Federal Housing Administration (FHA) needs to provide guidance to servicers to address an increasing number of seniors who are defaulting on their federally insured reverse mortgages, according to the Department of Housing and Urban Development's Office of Inspector General (HUD IG) .

HUD IG auditors discovered that four servicers are holding 1,300 FHA-insured home equity conversion mortgages (HECMs) where the borrowers had technically defaulted by not paying the real estate taxes and insurance on their homes.

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