Reverse mortgage holders likely to remain in program

Important filing deadlines are approaching for the state's Senior and Disabled Citizens Property Tax Deferral Program.

People currently part of the program who need to recertify their eligibility this year with the Oregon Department of Revenue have until April 8 to file the necessary paperwork, according to Bronson Rueda, the unit manager for the program.

"Those asked to recertify need to meet the deadline or they'll lose their active status," Rueda said. "If that happens, the state will not pay their property taxes due in November."

In addition, new applicants to the deferral program face an April 15 deadline to file their paperwork with their county assessor's office if they want to be eligible to have their property taxes paid this year, he said.

The Oregon State Legislature established the Senior and Disabled Citizens Property Tax Deferral Program in 1963 to help qualified citizens pay their county property taxes. Essentially, the state agrees to make property tax payments on behalf of eligible participants. A lien is placed on their property, and all taxes and fees with interest must be repaid before the lien is removed.

This is the second year the state of Oregon has asked participants to recertify their eligibility for the program. Prior to changes made during the 2011 Legislature, no recertification process existed; once applicants gained admission to the program, they would remain active until they either died, transferred their property to someone else, or moved from their property for reasons not related to health.

Applications and information about the program can be obtained from County Assessor's Offices or online at

At a March 25 Senate Revenue Committee work session March 25, members unanimously approved HB2489, a bill that permanently reinstates an estimated 1,500 senior homeowners who were removed from the state’s property tax deferral program in 2011 because they had reverse mortgages.

“The vote pretty well guarantees that the bill will be passed by the full Senate and signed into law by Gov. Kitzhaber later this year,” said David Raphael, a spokesman for the Alliance of Vulnerable Homeowners, which has fought for the reinstatement of senior and low-income families who were abruptly dropped from the program two years ago.

The alliance endorsed HB2489 at committee hearings that preceded Monday’s mark-up session. While expressing its support for the measure, which had been passed unanimously in the House earlier in March, the group reminded committee members that there remain “other low-income and distressed former program participants who will not be covered by this bill.”

As pleased as advocates are with the passage of the House bill, the alliance statement expressed hope that lawmakers would consider expanding the reprieve later during the legislative session, including providing an opportunity for others with special hardships to apply for recertification.

Fortunately, Raphael said, recent analyses by the Department of Revenue and Revenue Committee staff showed that there would be sufficient funds in the program’s revolving loan account to meet current obligations and to cover deferral payments of reverse mortgage holders who will be grandfathered in, as well a limited number of additional distressed homeowners with the most limited resources.

On March 15, the House Revenue Committee approved an amendment to HB2489 that would appear to permanently reinstate people with reverse mortgages, including everyone who received a temporary extension last year, into the program.

"The amendment that was attached to House Bill 2489 was adopted during a surprise work session scheduled by the committee," said Raphael.

"Initially, it appeared that lawmakers were only prepared to extend the earlier temporary reprieve for an additional two years. However, the amendment that actually was passed puts no time limit or other conditions on the reinstatement, so at this point it appears that the prohibition against reverse mortgages that was adopted in 2011 will not be applied retroactively to existing program participants but only to new applicants going forward.

"This is a huge victory and is one of the key items we have been fighting for over the past two years. However, the committee stopped short of accepting the other provisions of our bill - HB2510. One of the other groups that the bill sought to reinstate was homeowners who had been removed retroactively because they had not owned their homes for at least five years."

Raphael said that his group is not through fighting the battle.

"Keep in mind that this is not the end of the line for our efforts this year," he said. "The committee has indicated that it may consider other amendments to the property tax deferral program later in the legislative session. In addition, we will have an opportunity to expand on any amendments approved by the House when the bill moves to the state Senate for its consideration.”

On Feb. 22 Raphael was one of several people to testify at the Capitol in Salem before the House Revenue Committee in support of HB2510, saying, "We try to serve as a voice for the more than 5,000 older and vulnerable homeowners who lost their deferral assistance…

“Over the past year and a half, we have heard from countless desperate homeowners whose lives were turned upside down by losing their deferrals. Some had borrowed against the equity in their home just to live on.

"By combining tax-deferral benefits with the proceeds of a reverse mortgage, they thought they would be secure in their homes until the end. Others had downsized, and were able to buy their retirement home only with the help of property tax assistance from the state.

“And still others were simply confused when they received notice from the Department of Revenue that they needed to be recertified in order to keep their deferral, or they had been actively discouraged from reapplying.

"But regardless of the reason for their dismissal, they all had this in common: They had assumed that, once accepted into the property tax deferral program, they could rely on Oregon's commitment to them. A promise was a promise, they thought. It was the resulting shock and fear of eventually losing their homes that motivated us to form the alliance… "

The 1,500 or so reverse mortgage holders who received temporary extensions last year make up less than one-third of all the households that were originally dropped from the program in 2011. One of the provisions of HB2510 asks the Department of Revenue to go back and check on some of those who were terminated simply for lack of response - to find out what happened to the nearly 2,600 participants who failed to reapply.