Surviving Spouses and Reverse Mortgages
What you need to know when a non-borrowing spouse lives in a home that has a Reverse Mortgage.
In the past, when one of the married couple was under the age of 62, a homeowner's choices were to either
A: postpone applying for a reverse mortgage until the younger spouse became eligible or
B: take the risk of getting a reverse mortgage on just one of them.
With Option B, there was a chance that the non-borrowing spouse could become homeless if there was not enough life insurance or other assets to pay off the loan in the event of the borrower's death.
Easing the terms for Reverse Mortgages as related to Surviving Spouses is a good thing. The non-borrowing spouse (NBS) is not a borrower and is not on title. However he or she may continue to live in the home after the death of the borrowing spouse. The age requirement for eligibility for a reverse mortgage has been and remains at age 62.
From "Origination News" (an industry magazine for lenders), author Brad 
Finkelstein writes.
"A non-borrowing spouse, specifically named in the HECM documents and continuing to occupy the home as the principal residence, will not be required to repay the loan right away as long as he or she continues to meet certain criteria. These include maintaining the primary residence and paying taxes and insurance on the property."
- the NBS is married to the borrower at the time of the loan closing (and remains married to the borrower for the duration of the borrower's lifetime)
- their spousal status is disclosed at the time of the closing
- the NBS is named in the loan documents
- theNBS has occupied, and continues to occupy, the property securing the HECM as his/her principal residence
- the NBS establishes legal ownership (or another ongoing legal right to remain in the home) within 90 days of the death of the last surviving borrower, and
- the NBS meets all of the obligations described in the loan documents. See HUD Mortgage http://www.nolo.com/legal-encyclopedia/new-rule-spouses-not-named-reverse-mortgages-are-protected-from-foreclosure.html.
The age of the NBS will be the age used to calculate the dollar amount of the reverse mortgage.
The NBS will not be allowed to draw further on any existing line of the credit in the HECM. The primary reason for extending the age to these younger spouses is to prevent homelessness caused by the death of the older spouse.
If you have considered a Reverse Mortgage and your spouse is not yet 62, talk to a Reverse Mortgage Specialist and find out the details as they apply to your situation.
To learn about Reverse Mortgages and senior safeguards click here.
Surviving spouses and reverse mortgages.
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