Johnson v. World Alliance Financial Corporation, - F.3d -, 2016 WL 3900824, No. 15-50881 (5th Cir. July 18, 2016) was a Fifth Circuit decision determining that HUD regulations did not grant a reverse mortgage holder a private right of action unless those regulations are expressly incorporated into the reverse mortgage lender-borrower agreement. The federal Home Equity Conversion Mortgage ("HECM") or "reverse mortgage" program was authorized by the Housing and Community Development Act of 1987, Pub. L. No. 100-242, 101 Stat, 1815 (1988). It allows older homeowners to access their home equity the risk of foreclosure and eviction. An HECM is a first mortgage and reverses a traditional mortgage because the homeowner's loan balance increases over time, only becoming due and payable if one of several specified events occurs. See 12 U.S.C. § 1715z-20(j).
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