If the borrower took a line of credit, that line will be closed. (Lenders keep track of databases that note deaths and will send a notice to heirs if records indicate the last borrower has died.) Loan proceeds disbursed as monthly payments will stop. When the last owner dies, the estate's executor should contact the lender. ![]() If there is leftover equity after the loan is paid off, that money goes to the estate. The difference is covered by federal mortgage insurance, which the borrower pays while holding a HECM. "The estate can never owe more than the value of the property," says Gregg Smith, president, and chief operating officer of One Reverse Mortgage. ![]() That means if the loan amount exceeds the home's value, the lender cannot go after the rest of the estate or the heirs' other assets for payment. The good news for heirs is that reverse mortgages are "nonrecourse" loans. Consider this from Gregg Smith of One Reverse Mortgage: that is technically true as a non-recourse loan, however, it does NOT mean the loan does not have to be repaid or the house forfeited to the bank. ![]() In response to some who say the heirs are not responsible to pay the Reverse Mortgage debt. You can contact us at 1-80 or reach us by email at. Consider this from Gregg Smith of One Reverse. In response to some who say the heirs are not responsible to pay the Reverse Mortgage debt.
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