Non-Borrowing Spouses Now Protected in Reverse Mortgages

On April 25, 2014, the Department of Housing and Urban Development (HUD) issued a mortgagee letter announcing new changes for reverse mortgages that will protect non-borrowing spouses for new case numbers issued after August 4, 2014.

In the past, spouses of individuals who took out a reverse mortgage faced uncertainty in their housing situations after the borrowing spouse passes away. Per current FHA rules, the loan does not become due until the last borrower on the loan passes away. If a non-borrowing spouse is unable to make amends with the loan by paying it off or by selling the home, they may unfortunately face foreclosure.

With the new changes, as long as they are married to the borrower at the time of closing and provide their marital status via certified letter, the non-borrowing spouse will be able to defer the loan repayment and are able to continue living on the property. However, it is important to note that these changes are only available to new borrowers and will begin on August 4, 2014.

Interested in learning about the Reverse Mortgage program and the new changes? Our Senior Advisors are there to help you with anything you need to know about reverse mortgages. Call us today at 1-888-QUALIFY.