SALEM, Ore. (Legal Newsline) - Senior citizen groups in Oregon are asking state Attorney General John Kroger to stop new reverse mortgage provisions in state law from being implemented.

They also want Kroger to immediately reinstate all low-income homeowners who have been terminated from the state's Senior and Disabled Property Tax Deferral program because of their reverse mortgages, according to a two-page letter sent to the attorney general Monday.

The letter was signed by the Elders in Action Commission, Impact NW, South East District Senior Advisory Council, the Oregon State Council of Retired Seniors, Tax Fairness Oregon, United Seniors of Oregon and Patty Brost, a member of the Governor's Commission on Senior Services.

"We believe that (the state Department of Revenue) has misinterpreted the language of Section 16 of the Act, which added a new section -- ORS 311.700(2) to the statute -- and by applying it to existing program participants has created enormous harm and put some of Oregon's most needy residents at risk of losing their homesteads," the groups wrote.

They argue that the language in House Bill 2543 does not give the department authority to terminate existing tax deferral program participants with reverse mortgages, or participants who had such mortgages before enrolling.

"The most natural reading of this language is that it applies only in the case of new pledges of property that have already received tax deferments," they wrote.

The groups also note that no administrative rules were published by the department, outlining how it planned to implement the new provisions of the bill or allowing for public comment.

"If we and other organizations representing seniors, people with disabilities and other lower income homeowners had an opportunity to comment, we might have been able to prevent the crisis that now threatens the ability of many participants in the tax deferral program participants to remain in their own homes -- a crisis that DOR has created through its unsupported interpretation of this Act," they wrote.

A spokesman for Kroger told The Oregonian he couldn't comment on the letter and didn't know whether the attorney general would take action.

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