All Mortgage and Home Equity Loans Have Borrower Obligations
Not fulfilling the borrower obligations under any mortgage or home equity loan, including any type of reverse mortgage, may lead to serious consequences—even foreclosure. That is why reverse mortgage borrowers are required to take part in pre-loan counseling (which details the loan’s commitments and conditions) before being approved for a reverse mortgage loan. And reputable reverse mortgage lenders, like Reverse Mortgage Funding LLC (RMF), will make every possible attempt to educate borrowers regarding their options to avoid a reverse mortgage foreclosure should the loan become due and payable.
As with any mortgage—forward or reverse—you must meet your borrower obligations throughout the life of the loan, including but not limited to: keeping current with property taxes, insurance, and maintenance of the property. In addition, the property must be the borrower’s primary residence throughout the duration of the reverse mortgage loan. If any of these obligations are not met, the loan will become due and payable.
The truth about reverse mortgage foreclosures is that foreclosure is often the natural resolution of a reverse mortgage after the borrower passes away. When the last surviving borrower passes away or there is no next of kin to handle a sale, the estate will simply allow the home to go into foreclosure, with no penalty to the estate.