What should I do if I have a reverse mortgage loan and I received a notice of default or foreclosure?

There are several ways you may have fallen into default on your reverse mortgage loan.

• You were late or missed paying your property charges, which includes,
  • property taxes,
  • homeowners hazard insurance premiums,
  • flood insurance premiums,
  • ground rents,
  • condominium fees, and
  • homeowners’ association fees.
• You failed to keep your home in good repair, or
• You did not occupy your home as your principal residence.

Unless you take steps to fix your default, the lender can start foreclosure proceedings and you may lose your home. Depending on the reason for the default, there are some actions to take, based on the situations described below.

Failing to pay taxes or insurance

If failing to pay taxes or insurance is the basis for the default here are some options to consider.

• If you can afford to pay your taxes and homeowners insurance, do it right away. Find out where to send your payment. You may need to submit your payment to your reverse mortgage servicer or directly to the tax authority or insurance company.
• If you can’t afford to pay your taxes or homeowners insurance and have received a notice of default or foreclosure, you should immediately seek advice from either a reverse mortgage housing counseling agency or an attorney.
• State and local assistance programs may also be able to help pay for missed property charges. Area Agencies on Aging (AAA) generally have information about these programs. To find the nearest AAA, call (800) 677-1116 or visit the eldercare website  .

Failing to keep your home in good repair

If failing to keep your home in good repair is the basis of your default here are some options to consider.

• Contact your servicer to learn what repairs are needed and request that your servicer send you a list of the required repairs in writing.
• If you can afford to pay for the repairs, shop around by getting estimates from several contractors on how much they think the work will cost. Make sure that the written contract of work matches the verbal promises made by the contractor.
• If you can’t afford to pay for the necessary repairs, contact your state Area Agency on Aging (AAA)  to see what programs are available to assist older homeowners with home repair costs.

Failing to occupy your home as your principal residence

If failing to occupy your home as your principal residence is the reason for your default here are some options to consider.

• Reverse mortgage borrowers are required to certify each year that their home is their principal residence and their contact information is up-to-date.
• If you did not receive the annual certification or failed to return it, contact your servicer and ask what steps you must take to verify that your home is your principal residence.

Note: This information only applies to Home Equity Conversion Mortgages (HECMs), which are the most common type of reverse mortgage loan.