Mortgage Miracles Happen
Mortgage Miracles Happen

Borrower’s obligations for Reverse Mortgage

What events can cause the loan to be called due/ When is the loan to be Paid Back?

With a Reverse Mortgage loan you will never have to make a mortgage repayments for as long as you live in your home. The borrower remains responsible for required payments include: Property taxes, homeowners insurance, and any maintenance costs. Also, complying with the loan terms is also required.

There are some circumstances that will cause the loan to mature and the balance to become due and payable.

Here are some of the most common reasons:

  • The last remaining titleholder sells the home before he or she dies.
  • The last remaining title holder passes away.  At this time, the loan then becomes due, since the original signatories are no longer alive. This is how the bank & HUD get’s repaid.
  • The title holder(s) fails to live in the home for more than 12 consecutive months
  • Not paying property taxes, homeowners insurance or maintenance costs.
Other circumstances that may cause the loan to become due include:
  • You transfer the title to another person or entity (Trust). You CANNOT transfer title to a Trust nor to ANYONE after your closing. Period! This will result in your loan being called due.  If you cannot pay the loan off, the bank or HUD has the legal right to Foreclose.  Be careful, DO NOT transfer title after the closing of your Reverse Mortgage!
  • Failure to pay property taxes – You must pay property taxes every year. It is the home owners responsibility to pay property taxes.
  • Failure to maintain home owners insurance (not keeping / not paying home owners insurance).
  • You do not maintain and/or repair the home


Disclaimer: “These materials are not from HUD or FHA and were not approved by HUD or a government agency.” (ML 2014-10).