If Your Spouse Passes Away
If my spouse passes away or moves to a elderly care facility, what will happen with my reverse mortgage loan?
Answer:
It depends on whether or not you as well as your spouse are co-borrowers on the Corvallis reverse mortgage loan, and when the mortgage loan was applied for.
The vast majority of reverse mortgages that home owners apply for are generally Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. Within the rules governing HECMs, if you reside with a spouse, it is a good idea to make your spouse a co-borrower whenever you apply for a HECM if you both meet the qualifying age of 62. If you’re a co-borrower, you can continue residing in the property even though your spouse passes away or moves into a care home. A surviving co-borrower also can receive money from the mortgage.
Occasionally, just one of the spouses shows up as a borrower on the mortgage. For instance, one spouse may not have been 62 at the time of application, and wouldn’t have been eligible to be a HECM reverse mortgage borrower. In this situation, what happens to a surviving non-borrowing spouse depends the timing of when they got the HECM.
Any HECM loans with case numbers issued on or after August 4, 2014, allow qualified non-borrowing spouses to stay in the property after a borrower passes away as long as they fulfill particular preliminary and ongoing requirements. To become qualified as an “eligible non-borrowing spouse,” you will need to:
Be married to the borrower during the time of the home loan funding and stay married to the borrower for his/her life-time;
Note: If you happen to marry the borrower AFTER he/she gets a HECM, you will not be eligible to remain in the home.
Be specifically identified as as a non-borrowing spouse in the HECM docs;
Occupy, and continue to occupy the house as your primary residence; and
The borrower must certify at the time of the loan closing, and each and every year afterwards, you are her or his spouse; you must certify at the time of closing that you are an eligible non-borrowing spouse.
If you are a non-borrowing spouse, make sure your spouse sends the annual certification and also you follow all the requirements applicable to you so that you can be qualified to live in the house once the borrower passes away.
When you have satisfied each of the obligations above, you as an eligible non-borrowing spouse may stay in the property if the borrower passes away if you:
Are in a position to prove legal ownership or receive the legal right to live in the home (for instance, a lease) within Ninety days of the borrower’s death.
Note: Ensure that you meet this qualification while the borrowing spouse remains living, due to the fact 90 days is a short period of time. You may have to talk with your lawyer.
Fulfill the obligations of the mortgage loan to pay property taxes and insurance and maintain the property.
Annually certify that you are the late borrower’s non-borrowing spouse, and reside in the property, securing the loan as your primary residence.
Be aware that while you might be in a position to live in the house, you will not be eligible to have any funds from the reverse mortgage, including any funds remaining in a set-aside account set up for the payment of property taxes and insurance coverage.
To ensure you and your spouse understand these rules and meet these requirements, speak with your lender or servicer, a housing counselor, or legal representative – they will assist you to be ready should the borrower pass away before you.
If you are a non-borrowing spouse or partner in a home with a HECM with a case number issued before August 4, 2014, you might not be capable of retain your Corvallis Oregon property without paying back the loan except for when your loan provider or servicer elects to apply to HUD to allow you to remain in the property after the borrower dies. It is advisable to get hold of your lender or servicer to ask if they might get this endorsement for you. You and the lender or servicer must meet a variety of conditions within particular time frames, and HUD must accept the application form.
If you feel it’s possible you’ll be qualified for this benefit, not only should you contact your mortgage provider or servicer, but also a housing counselor or even an law firm to assist you with this process.
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