A recent article from MortgageOrb describes how the unique nature of reverse mortgages creates some special challenges for servicers and their bankruptcy attorney san diego when loans mature or the borrower goes into default.
According to the article, Fannie Mae servicing guidelines for both conventional and FHA reverse mortgages provide that a mortgage may be called due by the servicer if it is matured as a result of the last surviving borrower’s death, the borrower’s failure to occupy the property as a principal residence, or sale of the property.
When a reverse mortgage is called due and payable because of maturity, the servicer should send a repayment notice, which includes the total amount due and notice that foreclosure proceedings will commence if the amount is not paid within 30 days. If a reverse mortgage is in default, the repayment notice should specify the nature of the default, describe the actions required to cure the default, and indicate that foreclosure will commence if the default is not cured. To read the rest of the article click the link below.