I am often asked, "how long do my heirs have before they have to pay off the reverse mortgage?" A reverse mortgage becomes due when a "maturity event" occurs. In most cases this is either when the home is sold or the last borrower passes away. Each lender's requirements are different. Here is what one lender had to say about repayment:
When we are notified that the borrowers have passed away we ask the estate for a decision of intention to be made with 30 days. A letter is actually mailed to them. IF the heirs decide to refinance the property themselves we ask for a "Good Faith Effort" and documentation of effort. As long as communication is kept up the lender will work with the estate and their progress of their refinance. On a situation where the estate is selling the home, if it does not cell after 6 months, the lender has to file an extension with HUD, when approved the extension is an additional 90 days. The lender will also often request a copy of listing contracts in the case of a sale. The lender and HUD are looking for "Good Faith Efforts" and consistent communication on the part of the estate during the settlement process.
If you have a reverse mortgage question, call Angella 866-949-7030 or log onto www.reverse-your-mortgage.com