A Florida appeals court has ruled that creditors cannot garnish undisbursed funds from Home Equity Conversion Mortgage (HECM) lines of credit, extending the state's homestead exemption protections to unused reverse mortgage proceeds.
The decision specifically applies to reverse mortgage borrowers in Florida who maintain undisbursed credit line balances. Under the court's interpretation, these unused funds receive the same legal protections as the underlying homestead property, preventing creditors from accessing them to satisfy debts.