AARP Virgin Islands is informing the community of a newly filed nationwide class action lawsuit alleging that several major reverse-mortgage companies charged illegal and prohibited fees to older Americans with federally insured Home Equity Conversion Mortgages. Although the case was filed in New York, the issues raised may directly impact older homeowners here in the U.S. Virgin Islands.
The lawsuits—brought by AARP Foundation, Tusa P.C., and Giskan, Solotaroff & Anderson LLP—claim that the companies improperly billed seniors for fees that federal law and the HECM contract strictly forbid. These include attorneys’ fees, property inspection fees, property preservation fees, and appraisal charges, which can sometimes total thousands of dollars per borrower. By adding these fees to homeowners’ loan balances, the companies potentially increased interest and mortgage insurance costs, stripping borrowers of the very equity meant to help them age securely in their homes.
“Reverse mortgages are meant to help older adults stay in their homes, not drain the very equity they’re counting on,” said William Alvarado Rivera, Senior Vice President of Litigation for AARP Foundation. “When companies pad these loans with illegal fees, they deplete the homeowner’s hard-earned assets and, in many cases, put them at risk of losing their homes. Enforcing these laws is essential to protecting older homeowners’ financial security.”
Why This Matters to the U.S. Virgin Islands
HECM reverse mortgages are common in the Virgin Islands, where many seniors rely on them to supplement retirement income, repair storm-damaged homes, and remain in the family properties they’ve built over generations. Because HECMs operate under uniform federal rules, any nationwide violations may also have occurred here in the territory, especially if the same mortgage services manage loans for USVI residents.
Improper fees of this kind can unjustly raise loan balances and even push seniors toward foreclosure—an issue of particular concern in the Virgin Islands, where homeowners may already face challenges such as high insurance costs, property-tax pressures, and lingering post-hurricane repairs. AARP VI is committed to ensuring that older adults in our community remain protected from unlawful servicing practices that threaten their homes and financial stability.
AARP Virgin Islands Urges Local Homeowners to Review Their Accounts
AARP Virgin Islands encourages anyone with a reverse mortgage to:
• Check their loan statements for unexplained or escalating fees.
• Confirm which company services their loan, particularly if it is one of the companies named in the lawsuit.
• Seek immediate assistance if they have received letters regarding delinquency, foreclosure, or repayment demands.
• Contact local HUD-approved housing counselors, Legal Services of the Virgin Islands, or the Office of the Lieutenant Governor – Division of Banking, Insurance & Financial Regulation for help.
AARP VI will continue monitoring developments in this case and will share updates as more information becomes available. Protecting older Virgin Islanders, especially those striving to age with dignity in their homes, remains our top priority
