The Consequence of a Reverse Mortgage if One of the Borrowers Dies
If one of the surviving borrowers dies, the surviving borrower need not worry about eviction. He or she does not need to worry about repaying the loan or even losing his or her house. Any loan will not be paid by the surviving borrower; instead, the lender will reclaim the amount from the federal insurance which accompanies the home.
The Consequence of a Reverse Mortgage if Both Borrowers Decided to Relocate or Stay in a Nursing Facility
If on the other hand, the borrowers decide to leave their primary residence and transfer to a different house, then they are required to pay for the full amount of the loan. The same goes if they do decide to live in a nursing facility. According to the rules of reverse mortgage, if the borrower dies, sells the house, moves out of his or her primary residence, fails to pay the property taxes of the house, and fails to maintain the good condition of the house, then the lender may ask the borrower to pay for the full amount prior to the payable date of the loan.
The Consequence of a Reverse Mortgage if Both Borrowers Die
If both of the borrowers die, then the heirs of the estate will decide if they still wish to keep the property. If they do, then they will pay for the full amount of the loan; but if they do not wish to keep it, then they are free from any debt incurred by the reverse mortgage.
The above mentioned consequences are explained in full detail when applicants attend a reverse mortgage counseling session, which is one of the requirements of HUD. This is being implemented to guarantee that the senior citizens are well informed with all the details of their reverse mortgage.
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