WASHINGTON (6/18/15)--The Federal Housing Administration (FHA) has extended options in its revised policy deferring reverse-mortgage foreclosures against eligible non-borrowing spouses that normally would be triggered by the death of the last surviving mortgage borrower.
In FHA’s revised policy under its Home Equity Conversion Mortgage (HECM) Program, issued last week, the program gives FHA-approved lenders expanded options to allow the non-borrowing spouse to remain in the home after the death of the borrower, said a Department of Housing and Urban Development (HUD) press release.
Last year FHA amended its HECM policies to allow the deferral of foreclosures, or “due and payable status,” for eligible non-borrowing spouses for case numbers assigned on or after Aug. 4, 2014. The latest revision extends the policy to those eligible with FHA case numbers before that date.
FHA lenders will be permitted to submit claims on the expanded group of cases in accordance with the terms of the mortgagee letter by:
Under MOE, lenders may assign an eligible HECM to HUD despite the death of the last surviving borrower and regardless of its unpaid principal balance. Surviving non-borrowing spouses may remain in their home if: