March 26th, 2015 9:11 AM by Juan Luis Rodriguez-Kohly
NON-Borrowing Spouses that had to be removed from Title on Reverse Mortgages that Closed prior to August 4th, 2014, SO-SO GOOD NEWS.
HUD has issued a Letter (ML2015-3) to Lenders stating the if the Borrowing spouse passes, the Lender may, at their choosing ELECT to DEFER the "due and payable" clause in the mortgage. This, if elected by the lender, would allow an "eligible surviving NON-Borrowing spouse" the opportunity to remain in the home, despite their non-borrowing status and not being on Title.
To qualify for the deferral period, the eligible surviving spouse must:1) Have been legally married or in a committed relationship akin to marriage, to the Borrower at time of Closing and at the passing of the Borrower.2) Currently reside the property as principal residence.3) Obtain within 90 days of the passing, good, marketable Title to the property.
Please remember that the Lender MAY elect to do it or not.
This can be great news for Surviving spouses, but it is not Guaranteed. That is why I say So-So Good news
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