Spouses Not Named On Reverse Mortgages Are Protected

Federal Courts Have Provided Spouses Not Named On Reverse Mortgages Protections From Foreclosure

Non-Borrower Spouses whose names were not on Reverse Mortgages were pretty screwed when the spouse died. However, in 2013, the federal court in the District of Columbia handed down a landmark ruling.

The ruling recognized the need to protect surviving spouses in this situation. Bennett et al. v. Donovan forced FHA to change the rules of reverse mortgages to better protect non-borrower spouses when their the borrower passes away.

Reverse Mortgages

Reverse mortgages allow older homeowners to draw upon the equity in their home. This type of mortgage is different from a traditional mortgage because, instead of you paying the bank, the bank pays you. The payment to the borrower comes in the form of a lump sum, monthly amounts, or a line of credit.


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