How to use a Reverse Mortgage in a Divorce Settlement

September 23, 2023

While the concept of a reverse mortgage is often associated with bolstering financial stability for retirees, its utility extends beyond mere retirement planning. Beyond its ability to aid those meeting the 62-year-old age requirement in enhancing monthly cash flow or eliminating mortgage payments, there exists a lesser-known yet significant application: navigating divorce situations.

For couples facing the complexities of asset division, particularly when substantial home equity is involved, a reverse mortgage can serve as a vital financial tool. By tapping into home equity, it offers a lifeline during the intricate process of asset distribution, alleviating financial strains and fostering equitable living arrangements for both parties.

In this article, we dive into the often-overlooked role of reverse mortgages in divorce scenarios, exploring how they can streamline financial negotiations and provide a pathway to a more secure post-divorce future for all involved.

Table of Contents

• Maintaining Independence: Reverse Mortgages for Separate Living Arrangements

• Exploring the Reverse Mortgage for Purchase Option During Divorce

• If you get divorced and already have a reverse mortgage

• Managing a Reverse Mortgage During a Divorce

• Options for Dividing Home Equity in Divorce: Selling, Refinancing or Reverse Mortgage

• Top FAQs

Maintaining Independence: Reverse Mortgages for Separate Living Arrangements

Navigating a separation later in life often brings significant financial adjustments, particularly when it comes to sustaining a household once supported by dual incomes. In such circumstances, a reverse mortgage emerges as a valuable solution, offering flexibility and financial stability during this transitional phase.

A reverse mortgage provides individuals with the freedom to access their home equity in various ways, tailored to their specific needs. Whether opting for a lump sum, periodic payments, or a combination, the reverse mortgage can empower individuals to manage their finances effectively, especially when one spouse intends to maintain residence in the home but struggles with monthly mortgage obligations.

Consider this scenario: You own a $300,000 home with an $80,000 mortgage balance at age 72. With a reverse mortgage, you can access over $200,000, using $80,000 to settle the existing mortgage while retaining $120,000 for other purposes. Notably, funds can even be disbursed to the departing spouse at the loan’s closing, facilitating a smooth transition. It’s essential to note that during the loan term, the departing spouse must be removed from the home title, a process often streamlined alongside loan initiation.

However, it’s important to recognize that like all reverse mortgages, repayment becomes due upon the borrower’s relocation or passing. Additionally, borrowers must fulfill obligations such as property tax and homeowners insurance payments throughout the loan duration. This arrangement enables one spouse to enjoy a mortgage-free existence while the other can allocate resources towards savings or other financial priorities, fostering financial independence and stability for both parties.

Exploring the Reverse Mortgage for Purchase Option During Divorce

Amidst a divorce, a ‘Reverse Mortgage for Purchase‘ can be a strategic financial tool if neither spouse wants to stay in the family home. This innovative option combines the purchase of a new home with the benefits of a reverse mortgage, all in one transaction.

This approach can be particularly advantageous for a divorcing couple. It enables one spouse to seamlessly transition to a new residence using a reverse mortgage, while the other may receive a portion of the cash proceeds. This solution is especially fitting for those considering downsizing.

Leveraging a reverse mortgage for purchase can simplify the property division process in a divorce, ensuring both parties can move forward with their new living arrangements and financial independence.

If you get divorced and already have a reverse mortgage

When a couple with a reverse mortgage together decides to get a divorce, they must submit the divorce decree to the loan servicer. At that point, one of the spouses will be permitted to be removed from the home title, keeping the loan in the remaining spouse’s name.

Managing a Reverse Mortgage During a Divorce

For couples who are undergoing a divorce and already have a reverse mortgage, it’s important to understand the necessary steps to manage this financial arrangement. Upon deciding to divorce, the couple must provide their divorce decree to their loan servicer. This is a key step.

Following this, the process allows for one spouse to be officially removed from the home’s title. Consequently, the reverse mortgage loan will then be solely in the name of the remaining spouse. This procedure ensures that the reverse mortgage terms are appropriately adjusted to reflect the new ownership status, providing a clear path forward for both parties in managing their joint financial commitments post-divorce.

Options for Dividing Home Equity in Divorce: Selling, Refinancing or Reverse Mortgage

Option	Description	Pros	Cons	Key Considerations
Selling the Property	Selling the home and dividing the proceeds.	Clear and immediate division of assets; liquidation of equity.	Both parties must relocate; dependent on market conditions.	Timing, market conditions, and potential capital gains taxes.
Refinancing	Obtaining a new mortgage to pay out the spouse’s share.	Retain ownership of the home	Qualification for a new mortgage required; potential closing costs and higher mortgage payments.	Credit score, income stability, and ability to manage increased mortgage debt.
Reverse Mortgage	Taking out a reverse mortgage to pay the spouse’s share of asset.	No monthly payments required; allows one spouse to remain in the home.	Depending on the occupying spouse age, may not qualify for full 50% loan-to-value to split asset evenly.	Age requirements (usually 62+); suitability for the remaining spouse's long-term financial plan.

This table can help someone in a divorce situation evaluate the best method for dividing home equity according to their specific circumstances. The content should be adjusted based on the particular details of the situation and legal advice.

Top FAQs

What happens to a reverse mortgage in a divorce?

If a married couple has a reverse mortgage and goes through a divorce, there can be many different outcomes depending on how the reverse mortgage was set up and the plans for the residence. For example, suppose both spouses were borrowers on the loan. One will stay in the home after the divorce, and the other will move out. In that case, the loan is still in good standing because one of the original borrowers still lives in the home as their primary residence. If only one of the spouses was a borrower on the reverse mortgage loan, and the spouse is moving out of the property after the divorce, the reverse mortgage must be paid off by refinance or selling the home.

Can a reverse mortgage be taken to fund/settle the divorce payout?

Yes. The spouse who wishes to remain in the property can apply for a reverse mortgage and use the available proceeds to pay the other spouse to complete the divorce settlement. A written agreement outlining the terms must be filed with the court to accomplish this.

How does my existing reverse mortgage affect my new spouse?

If a homeowner obtained a reverse mortgage before a new marriage, the new spouse was not factored into the terms of that loan. Therefore, the spouse has no spousal protection or deferral period to remain in the home with the reverse mortgage in place if the borrowing spouse were to pass away first. The only way to protect a new spouse is to refinance your reverse mortgage to a new one with the new spouse included in the terms.

Will a divorce cause my reverse mortgage loan to be called due and payable?

Not necessarily. If you were a borrower on the reverse mortgage and lived in the property as your primary residence, your loan will not be called due and payable. Suppose you were not a borrower on that loan, and you were the one who wished to stay in the home. In that case, you must pay off the reverse mortgage loan, or it will be due and payable after the borrowing spouse no longer occupies the property as their primary residence.

If I divorce, can I get a new reverse mortgage of my own?

Yes. To be eligible to get your reverse mortgage after the divorce, you will need to be able to supply your divorce decree finalized with the court. The agreement will have to have specifically awarded the property to your ex-spouse and named them solely responsible for that reverse mortgage. Without this documentation, you cannot get a new reverse mortgage.

If you are co-borrowers and separate, and one buys a new house, does the reverse mortgage become due if the other stays in the reverse house?

When co-borrowers part ways and one of them purchases a new home, the reverse mortgage on the original property remains unaffected as long as at least one of the initial borrowers continues to use the original house as their primary residence. The loan’s status remains in good standing and does not become due and payable until the property is sold or no longer serves as the primary residence of any of the original borrowers.

ARLO recommends these helpful resources:

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Have a Question About Reverse Mortgages?

Look no further. Michael G. Branson, our CEO, brings a wealth of knowledge directly to you. With a robust 45-year tenure in mortgage banking and 20 years dedicated solely to reverse mortgages, he's the expert you want on your side.

Post your question in the comments below and anticipate a personalized response from Mr. Branson himself, typically within one business day. He's here to illuminate all angles of reverse mortgages, ensuring you're equipped with the knowledge to make informed decisions. Take this opportunity to gain insights from a seasoned professional.

115 Comments on this Article

Steve D.
April 30th, 2024

I'm 67. Divorce cleaned out savings. I have a rental income of $7000 and Social Security ($1400). I hoped to get a reverse mortgage to pay tax and insurance on the house, valued at least $1.3 million with a mortgage balance of $225k. My credit took a hit because credit cards (used by my construction company) went bad during the divorce when my child was taken illegally. I want to zero the mortgage and obtain a $100k hard money loan at $325k. Based on those numbers, where do interest and fees get me in 20 years? I hope my heir can sell the investment property to repay the reverse mortgage. Am I dreaming? The investment property value is currently $650k.
Reply to Steve
- Michael Branson
  April 30th, 2024
  
  Steve, it's important to understand that a reverse mortgage offers you flexibility. You can run the numbers on our website based on your unique scenario. This will help you see if you're comfortable with the amortization schedule and loan balance, considering the amounts you want to borrow. With a reverse mortgage, you're not tied down to monthly mortgage payments. As long as you live in the home and pay your taxes and insurance, you're mortgage payment free. And here's the best part: there's never a prepayment penalty. You can make any payment you choose at any time, giving you full control over your financial situation.
  Payments of interest only or some portion thereof will keep the interest from accruing as quickly, so you can determine if your goal is more geared to keep the balance lower or to stay in the home payment free so that your income can be saved and invested in other ways. You can make payments of more than interest only, and then, just like a traditional forward mortgage, the balance will begin to decline. But the point is, it's always your choice. Since there is no payment required, you choose when you want to make a payment and how much...or not.
  We've developed an amortization calculator that's available for you to use. This tool allows you to see how different payments would affect your loan. You're in control of the variables- you can change the interest rates and the amounts you borrow or repay and see how it affects the balance owed over the years. Unlike the standard HUD and most lender calculators, our program shows results for all draws of payments, not just the first one. If you're interested in seeing these additional results, be sure to request the information when you visit our site.
  Reply to Michael
Debbie S.
December 8th, 2023

I am getting divorced and need money to buy my husband out of the house. I was thinking of taking a reverse mortgage, but I don't know if it would be good for me. The house is worth about $260K I only owe $30K for it. I would like to take $100K to pay off the $30K and give him $70K. I do have heirs would anything be left for them? I am 70 years old.
Reply to Debbie
- Michael Branson
  December 8th, 2023
  
  Hi Debbie,
  
  How much money would be left for heirs is a function of the market, interest rates, how long you continue to live in the home without making any payments, etc. With a reverse mortgage, you would never be required to pay a mortgage payment for as long as you live in your home and pay your taxes and insurance in a timely manner. But you can choose to pay any amount at any time. There is no prepayment penalty on a reverse mortgage so you can choose to pay monthly, quarterly, annual, or payments in any amount up to and including payment in full at any time with no penalty.
  
  With the schedule you describe, you would be taking less than half the value of your home in loan proceeds and then your interest would accrue on that amount. You can visit our calculator at https://reverse.mortgage/calculator and see how that would work for you based on today's rates and your circumstances. However, should you choose to take any additional money later, that would change those results but on the other side of that coin, if you are more concerned about leaving a larger asset to heirs, you could choose to pay interest and MIP accrual only so that the balance never grew. Or if it is within your ability and comfort, you could pay a little more and the balance would begin to decline just like a traditional or forward loan.
  
  The beauty of a reverse mortgage is that there are no payments due, so there are no due dates and never a late charge if you can't make a payment one month because something comes up. Since there are no payments due, you are in total control of anything you want to pay or pay nothing at all - it's your call. Some people have chosen to make no payments and have put their money into other investments or bank accounts leaving them to heirs rather than a property. That's your call but with a reverse mortgage, unlike other loans where you must make the payment on time or take the chance of having late fees or even possibly face foreclosure for non-payment, you decide if you want to make any payments on the loan or not. Just remember that like any other loan, you are responsible for continuing to pay your taxes, insurance, and any other property charges in a timely manner (i.e. HOA dues if any).
  Reply to Michael
David B.
July 19th, 2023

Hi Arlo,

My wife and I divorced two years ago. She moved out, and I continued to live in our house. We are both on the title. I want to use a reverse mortgage to buy her out per the terms of our divorce decree and remove her from the title simultaneously. Can I do this without her knowing I am using a reverse mortgage to pay her off? I would prefer she not know about my finances and affairs now.
Reply to David
- Michael Branson
  July 25th, 2023
  
  Hello David,
  If she is on the title when you apply for the loan, she would also need to consent to the loan and attend the HUD counseling. Since she is not living in the home, she would not be a part of the loan or have spousal rights. Still, as a co-owner of the property, the financing cannot be kept from her and cannot be placed on the home without her consent. You can buy her out with the loan proceeds, but that would only negate her need to be a part of the transaction as a current owner if you can remove her from the title before the start of the transaction.
  Reply to Michael
Christine T.
February 14th, 2023

Hi Arlo,

I am a 60 yr old female veteran and domestic violence survivor. I am currently divorcing my husband. He is trying to force the sale of the house during the divorce in order to access the funds that would be available. We owe $100,000 on a $500,000 house. Since 2016 he has systematically and deliberately destroyed my credit so that I could not refinance the house. This is obvious by the fact that my credit score has suffered major blows and his has suffered none. Is a reverse mortgage an option for me?
Reply to Christine
- Michael Branson
  February 14th, 2023
  
  Hello Christine,
  This is a tough question for me to give you a short, definitive answer. The HECM (HUD reverse mortgage) is the best reverse mortgage for a property valued at the amount you list. HUD also does not utilize credit scores but does have a financial assessment portion of their underwriting that does take overall creditworthiness into consideration so depending on how many credit accounts have been paid late there is a possibility that money would need to be set aside to pay future tax and insurance payments.
  However, you would not be eligible for the loan until you turn 62 years of age. There are private programs that may meet your needs that will accommodate younger borrowers, but they also will not give loan amounts as high as a percentage of the property's value so I have no way of knowing if those loan amounts would meet your needs (or if your credit would meet the program requirements since those programs are a little more credit sensitive).
  So the best thing I can suggest is that you visit our online calculator and plug in your information to see if the programs and amounts would even meet your needs based on the property value, your age and the current interest rates. If you decide to go further from there, let the originator know what credit issues you have had in the past (especially in the 24 months and if there have been any late payments on mortgage payments, taxes, homeowner's insurance or HOA payments during this time) so they can also run your numbers with a set aside for payment of your taxes and insurance to let you know what you would most likely receive from the loan.
  The worst you can do is decide that the loan is not right for you or would not meet your needs but then at least you will know.
  Reply to Michael
Wendy
December 31st, 2022

Hello Arlo,

I am going through a divorce and will need to sell my current home. I plan on moving in with my mom who currently has a reverse mortgage on her home. Is there any benefit to buying her home now to put in my name or should she just keep the reverse mortgage.

She currently owes about $500k, and her house is probably worth about $800-850k. Also, if I am not paying mortgage (if I do not roll my profits from existing house into a new house - is it true that I will be taxed and lose a lot of money)?
Reply to Wendy
- Michael Branson
  December 31st, 2022
  
  Hello Wendy,
  It's difficult for me to advise you one way or the other on something like this not knowing your circumstances. Your mom continues to accrue interest on her loan and part of your decision would depend on whether you intend to stay with mom for the rest of her life or if it is a temporary situation.
  Also, I don't know what your liquidity will be when you move in with mom or any other facts. And finally, I can't give you tax advice by law so I would encourage you to speak with an accountant about the tax implications in your case if you do not put your sale proceeds back into another home within the period established by tax law.
  What I can throw out for thought though is that you need to talk to an accountant so that you can discuss all possible tax ramifications for both you and mom before you do anything. It may be better for mom to sell you her house, but then again, you may create a bigger tax liability for her. I don't know and can't advise you.
  What I can tell you is that you can always apply for a reverse mortgage of your own later if you feel you need funds that you used to purchase the home if you are not yet 62. But for accounting advice, you really need to speak to someone in that field who can assess the impact on both your and your mom's situations.
  Reply to Michael
Marie
October 12th, 2022

Hello Arlo,

My spouse needs a reverse mortgage to pay off a divorce and pull money out for his home care. I would be a non-borrowing spouse, but I am also a nonresident spouse. I want nothing to do with his loan, house whatever, it will be sold and given to another relative. Why must I be included since I am so young? We married for other reasons and in name only. I am trying to help him get care. I don't even live there. Are payout going from $85k to $4k. He needs the money for home care. He is 87.
Reply to Marie
- Michael Branson
  October 12th, 2022
  
  Hello Marie,
  
  I think you should talk with another company. If you are not living in the home and can establish this, you are considered a non-eligible non-borrowing spouse and therefore, your age should not be taken into consideration on the loan. I obviously have not seen your loan file or your documentation, but it seems that you may benefit from a second opinion.
  Reply to Michael
Jerry
March 22nd, 2022

Hi Arlo, I'm 69 and my non-borrowing spouse is 57, If we divorced can I reapply for a new reverse mortgage since the amount of available funds was significantly less due to her age? Thank you!
Reply to Jerry
- Michael Branson
  March 22nd, 2022
  
  Hello Jerry,
  
  You can always refinance the loan at any time and the proceeds would be determined by the current parameters in effect at the time you apply for the new loan.
  If the property is solely in your name and you are a single individual, the loan would be determined based on your age.
  Reply to Michael
Lynida
March 2nd, 2022

Can my partner be on a reverse mortgage with me even though we are not married? And if he is not on the title does this give him power over what happens if I die first?
Reply to Lynida
- Michael Branson
  March 2nd, 2022
  
  Hello Lynida,
  
  As long as he lives in the home with you and you are willing to add him to title, he can also be on the loan with you even if you are not married. He cannot be on the loan if he does not live in the home or if he is not on title to the property.
  With regard to what power or other rights this gives him, I would strongly suggest that you contact an estate attorney to determine what rights you want him to have, what safeguards you want to be sure you have and if you have any other heirs, what you want to do for their sake.
  Reply to Michael
Chris
March 2nd, 2022

Hi Arlo,

If a couple divorces after having a reverse mortgage, can the co borrower on the loan remain in the home and remove the borrower from the deed and loan?
Reply to Chris
- Michael Branson
  March 2nd, 2022
  
  Hello Chris,
  
  I guess the answer to your question is yes and no. As long as one original borrower remains in the home and on title, the loan is still valid.
  Therefore, you can record a Deed to change the title to just one of the original borrowers as long as that borrower remaining on title is still living in the property.
  However, you cannot change the names on the loan. The loan documents do not change even if you do change the title.
  Reply to Michael
Stacey
December 19th, 2021

Reverse mortgage in a couple's name and they divorce. No one notifies the reverse mortgage company of the divorce. The one living in home remarries. Is this an event that would trigger loan being due?
Reply to Stacey
- Michael Branson
  December 19th, 2021
  
  Hello Stacey,
  
  This will not have any effect on the loan at all. As long as at least one of the original borrowers on the loan still live(s) in the property as their primary residence (and they still pay the taxes, insurance and other property charges and maintain the home in a reasonable manner), the loan will remain in good standing.
  Reply to Michael
Ashley S.
July 21st, 2021

Surviving on one income can pose some significant financial challenges for retired divorcees, especially if they have been accustomed to sharing income with their former spouses.
Reply to Ashley
Gregg T.
June 29th, 2021

My wife and I are awaiting final divorce decree deadline for court 7/5. She has agreed to sell our primary to me in which I live. She will not go through a class. We do have a contract allowing me to purchase. What do I need to begin the process? I'm 66, house has substantial equity. She just won't go through the class. Can we start the process now? wait until decree is final? Does she have to be off title?
Reply to Gregg
- Michael Branson
  June 29th, 2021
  
  Hello Greg,
  
  Some of the answer would depend on in which state the property is located. But if she is still on title and you are still married, there is no way for you to begin without her also doing the counseling and signing some of the forms at the start.
  Since you are so close to the final settlement date, I would tell you that if she were unwilling to participate and attend the counseling, wait the two weeks and start then.
  Reply to Michael
Ida N.
April 27th, 2021

I have mortgage with my ex-husbands name on it and he passed away 3 yrs ago I want to pay off the mortgage and get reverse mortgage, but company won't talk to me because he never opened estate. Any suggestions?
Reply to Ida
- Michael Branson
  April 27th, 2021
  
  Hello Ida,
  
  Due to financial privacy laws, lenders must be careful not to divulge information on a loan to any third party who has not been previously authorized by the borrower to receive such information or from whom the lender has received adequate documentation that they are the current owner (heir) of the property.
  You should have no trouble receiving a Demand for payoff just by providing them with the documentation of the owner's passing and your ownership of the home now.
  Reply to Michael
David
March 4th, 2021

I inherited the family home free and clear. I want to live there as my primary residence, but my wife does not. She wants to keep our current home as her primary residence. Can I get a reverse mortgage on the family home without getting a divorce?
Reply to David
- Michael Branson
  March 4th, 2021
  
  Hello David,
  
  Yes, you can. She will still be involved in the loan and will need to attend the counseling to acknowledge the terms and that she understands she has no protection as a non-borrowing spouse, but it is possible to do the loan this way. I do need to caution you.
  The single largest incidence of fraud with reverse mortgages is occupancy fraud. The lender will probably require you to occupy the home before you apply and will require documentation of your occupancy.
  They may want to see bank statements and other exhibits that verify that you live I the home in addition to your license stating that address.
  Even then, you may be on an annual or a schedule with even more often occupancy inspections and failure to occupy the home would cause the lender to call the Note due and payable which if you failed to pay when called would lead to a foreclosure.
  Reply to Michael
Margue
February 20th, 2021

I'm considered a non borrower on our hecm loan. My husband is the borrower. If we divorce and he moves out, can I still stay in the home until I die?
Reply to Margue
- Michael Branson
  February 20th, 2021
  
  This is a great question and good that you are looking into it now. The eligible non-borrowing spouse designation protects spouses who were not old enough to go on the loan at the time the loan closes in the event of the death of the borrower.
  It does not allow the non-borrowing spouse to remain in the home if the borrower simply moves out. If the borrowing spouse leaves the home for any other reason, the loan would be called due and payable.
  That means that if you plan to make any life changing decisions that would affect the borrower's occupancy, you should keep this in mind and plan accordingly before you are contacted by the lender and notified that the loan must now be repaid. You may need to plan to refinance the loan with a standard or forward mortgage, refinance with a new reverse mortgage in which you are a borrower if you are eligible now or a sale and move.
  The sale and move may not be something you want to do, but it would be much more advantageous for you to be able to do it on your own terms and at your own pace rather than to be under the pressure of a looming foreclosure later if the lender has already called the loan due and payable.
  Reply to Michael
Linda
February 11th, 2021

My husband and I are divorcing- the divorce will be finalized in a few days.
My spouse wants to take a reversal mortgage to pay me a small percentage now. The reversal company will only give home so much now and the rest in a year. How do I protect myself to make sure I get what is do to me in a year.
Reply to Linda
- Michael Branson
  February 15th, 2021
  
  Hello Linda,
  
  This is a question for your attorney. We cannot advise you in this matter because your question does not pertain to the loan, but rather to your marital settlement and falls under the heading of general legal advice and not information regarding reverse mortgages which would be a subject we are not licensed to address.
  The loan will not allow you to put another lien on the property at the time you close a reverse mortgage but you can put another short-term loan on after the loan closes so you may want to discuss that possibility with your attorney but here again, I can only help you with informing you of the reverse mortgage requirements as they relate to secondary financing.
  Your attorney may be able to suggest other ways you can assure yourself of payment in full when your spouse (soon to be ex-spouse) has access to the remaining funds or he/she may advise that you not agree to wait at all for some reason or another. But getting the additional perspective is a great idea so you know any possible snags either way.
  Reply to Michael
Mary
November 4th, 2020

In 2017 I separated from my husband and in 2018 filed for divorce but it is not finalized yet. Now my husband wants to get a reverse mortgage and wants me to go on his certificate. I am not sure if I do that, I will lose my right to get a reverse mortgage for myself in the future year. Appreciate your time.
Reply to Mary
- Michael Branson
  November 4th, 2020
  
  Hello Mary,
  
  If you are not living in the house and are only going on as a non-borrowing, non-eligible spouse (due to the fact that you are not an eligible borrower on the loan and do not live in the property), you do not need to worry about future reverse mortgage eligibility because you are not a part of the loan itself and you would be eligible for your own loan should you decide to apply later.
  HUD requires that since you are still married now though, you must attend the counseling even though you will not be on this loan so that you know what your rights are and what protections you are not going to receive as a non-borrowing spouse.
  Many people start a divorce and then for reasons of their own, decide to reconcile and you need to know that if you do the same, you are not covered under this loan.
  The fact that you filed for divorce in 2018 and it is still not final indicates that there may still be some unresolved issues but wither way, you need to be certain that you are willing to give up all protections of the reverse mortgage on this property and the only way to be sure you know all your rights is to require you to attend the counseling.
  If you refuse, he would be required to wait for the divorce to be final.
  Reply to Michael
Todd S.
September 27th, 2020

I own a home with my ex-husband (we are divorced now). He is 73 and I am 54, we both are on current mortgage and deed. He continues to live on property, I do not. We have about $60,000 equity in home and owe $210,000 on loan. He wants to investigate reverse mortgage to help him with mortgage payments. Would this even be possible?
Reply to Todd
- Michael Branson
  September 27th, 2020
  
  Hello Tammy,
  
  Since he is no longer married, if you agreed to the loan (since you are also on title), he would be eligible for the loan with you as a non-borrowing additional title holder.
  As a non-borrowing title holder, you do not sign any of the loan documents, but you would need to attend the counseling session and sign some of the documents that indicate you are aware of the loan terms and consent since you are on title as well.
  Now to the larger problem.
  Your equity position would need to be higher for him to qualify for a reverse mortgage.
  He currently owes almost 80% of the value of the home and the reverse mortgage will not lend that great a percentage since borrowers never need to make a mortgage payment while they live in the home.
  You can check to see what he could expect to receive on our refinance calculator but you will find that it would not be sufficient to pay off the current lien of $210,000 on a $270,000 value and all current liens on the property would need to be paid in full with the reverse mortgage proceeds for the loan to work.
  Reply to Michael
Al
September 14th, 2020

Hello ARLO!

My wife and I are getting divorce and I are trying to buy out her home share (1/2 out home value) via a reverse mortgage and have a few questions. The house has an in-law unit.

Can I live in that unit and rent the rest of the house? Would it be possible to borrow less than I qualified for the reverse mortgage?

If I am qualified for $800k, can I just borrow $200k? I know that the reverse mortgage rate is higher than regular loans. What percentage is higher. Are there rate changes like regular loans, conforming and jumbo.

Can I pay a monthly payment toward the reverse mortgage so that I can deduct the interstate from my taxes?
Reply to Al
- Michael Branson
  September 14th, 2020
  
  Hello Al,
  
  There are several questions here so let me address them individually.
  Firstly, the terms of the reverse mortgage state that you must live in the home as your primary residence. HUD intends that you live in the main structure and that you follow any local ordinances and zoning laws about the rental of other structures.
  I know that if you are living in an accessory dwelling unit (ADU) at the time you apply for the reverse mortgage, the loan would not be approved. If you later moved into the ADU but were still living in the home, I cannot tell you what the lender would do. I have never heard of a loan being called due and payable but I can see how that might create problems if an occupancy inspection was done and the inspector reported back that you were not living in the property.
  
  The line of credit on a reverse mortgage does exactly what you are looking to do. It allows you to take draws or a portion of the loan up to your available limit while leaving the remainder available on the line without any cost to you or interest accrual on the funds you do not use. Therefore, you can borrower just a portion of the loan available to you, leave the rest on a line of credit available to you later if you wish and if you never borrow the funds, it never costs you anything to have the funds available.
  
  Reverse mortgage loans are very competitive with forward or traditional loans. To get a quote for today's rates, please feel free to visit our calculator to see what rates, loan amounts and program options are available to you.
  If your home is valued at $800,000, you would benefit most from the HUD HECM loan and not a jumbo program so you do not need to worry about jumbo program rates but the online calculator will show you the different options available to you based on your parameters. While there are no payments required with a reverse mortgage, you can pay any amount at any time up to and including payment in full without penalty.
  So yes, you can make payments of any amount and with any frequency you wish to pay the interest, the interest and principal or whatever amount you desire. And since there are no payments due, if you want to pay less one month or skip a month, there are no adverse ramifications to doing so.
  As far as interest deductibility, you would need to speak with your accountant or tax professional since the laws have changed so much over recent years regarding interest deductibility and I cannot give you tax advice.
  Reply to Michael
Phyllis O.
September 1st, 2020

My husband moved out of our home, divorced me and for almost two years has been living in the home of his new wife. Has he lost his right to occupancy? If I should predecease him, can he and his new wife return to my home.
Reply to Phyllis
- Michael Branson
  September 1st, 2020
  
  Hello Phyllis,
  
  Technically, he no longer meets the requirements of the loan because he has not maintained the occupancy requirements of the program.
  However, just being honest with you, if he was already back in the property by the time the lender did any occupancy inspections and if he is still on title, they may not even know he was ever out of the property.
  If he is no longer on title to the property though, he would not be able to keep the reverse mortgage active and the ownership of the home would be dependent on the passing of the title in accordance with heirship rights.
  I cannot answer the legal questions, but the loan may or may not be called due and payable depending on who was on title and who was occupying at the time the lender was doing all their inspections.
  Reply to Michael
Rebecca S.
August 1st, 2020

How to stop my spouse from borrowing more money from our home during divorce proceedings?
Reply to Rebecca
- Michael Branson
  August 1st, 2020
  
  Hello Rebecca,
  
  I think you should contact an attorney to get a clear answer on this question.
  If you are also on title, your spouse should not be able to take out new loans without your participation, if you are referring to a loan that is already on the home and you have already given the lender approval to advance additional draws with only one spouse's signature in the past.
  I am not sure what the best way would be to withdraw that authorization but I would suggest you contact the lender and send them written notice of the situation and tell them that as a borrower on the loan you do not authorize any further draws without your signature as well.
  But again, you really need to contact an attorney to determine the best legal way to prevent further indebtedness on a joint asset.
  Reply to Michael
Robert
July 8th, 2020

My previous wife quick deed the house to knowing that house would go to our children, I had to get a reverse mortgage. I remarried now getting divorced, does my new wife any claim to house?
Reply to Robert
- Michael Branson
  July 12th, 2020
  
  Hello Robert,
  You really need to direct this question to an attorney in your area. The loan has no effect on marital rights/community property rights or heirship.
  Whether she has any claim on the property or not depends on state laws and whatever guidelines they impose to determine the rights of spouses in such situations.
  I am afraid I cannot give you this legal information and it really has nothing to do with the loan on the property.
  Reply to Michael
Stacy L.
July 7th, 2020

My parents are both over 62 years old and are going through a divorce. Mom has moved out and wants half of what the house is worth. My dad wants to stay in the house and is taking out a reverse mortgage with a cash out lump sum to pay mom 1/2 of the house worth. My question is; since they are not divorced yet all the paperwork asks for my mom to sign as a non-borrowing spouse. Should she sign these documents even though she has not lived there for over 1 year and wants a clean break. What should my dad do to get the cash out to pay mom without having to make payments to a bank?
Reply to Stacy
- Michael Branson
  July 7th, 2020
  
  Hello Stacy,
  
  I cannot tell your mom what she "should" do, all I can do is advise about what it means if she does it. Firstly, a reverse mortgage is a non-recourse loan. Whatever she decides to do, even if she were to be on the loan with your father at the time the loan was closed and later left, the lender can only look to the property for repayment on the loan so mom would never need to worry about owing any money on that house/loan.
  As long as she truly is a non-borrowing spouse, there would also be no problem for mom under HUD's current guidelines if she wanted a reverse mortgage of her own on another property in the future but she would probably be required to provide documentation of the divorce.
  
  Dad cannot get the loan if he is still married to mom if she does not sign the paperwork. Any married individuals or people who have others on title even if they are not going on the loan will be required to sign certain documents acknowledging the terms of the loan and their approval.
  If mom does not want to sign any of the paperwork, they may need to consider a legal agreement and on that I cannot advise you. Mom should seek the counsel of an attorney to determine if there is any way she can legally structure a transaction that would protect her interest until the loan closed while removing her from title.
  One such way might possibly be mom give title to dad in exchange for dad giving mom a Deed (lien) on the property for the amount he is going to pay her and then after the divorce is final, dad could complete the reverse mortgage at that time and mom could be paid off as a lienholder with the reverse mortgage that dad gets on his own without mom involved because they would no longer be married.
  
  That is the only advice I have for doing the loan with no involvement from mom but I don't know how long it will take for the divorce to be final and how quickly you are hoping to get all this to happen.
  Reply to Michael
Susan M.
June 29th, 2020

My husband and I (both over 62) both have our names on the deed to our house. We are divorcing. Can my husband get a reverse mortgage on the house if he plans to sell the house and mainly wants the money to pay me my share of the house? We are currently separated, I am living in the house, within the next few months we would like me to move to another home and him to sell the house.
Reply to Susan
- Michael Branson
  June 29th, 2020
  
  Hello Susan,
  If he is living in the home at time of application, he can get the loan if he qualifies under HUD guidelines.
  He cannot apply before he occupies the home and if you are still on title you would also need to be involved in the process, the degree to which you would be involved would depend on your status at the time.
  For example, if you were already divorced and not living in the home but just on title, there would be the same procedures any other non-borrowing co-owner of the property would be required to do (counseling and signing some documents).
  If you are still married at the time, there would be more participation and if you are married and living in the home, you would also be required to be on the loan.
  Reply to Michael
Theata B.
June 12th, 2020

My now ex took out a reverse mortgage on our home without my knowledge or consent . In the community property settlement, I am entitled to half. Overtime the Reverse mortgage co.
gave him $175,000 of the $288,000 that the property was worth. He defaulted. The property is now in foreclosure for $220k. How and from whom do I get my half?
Reply to Theata
- Michael Branson
  June 13th, 2020
  
  Hello Theata,
  
  This is a great question for a licensed family law attorney, not a lender. What I can tell you is that whether you were on the title to the home or not, he should not have been able to obtain a reverse mortgage without your knowledge or consent as there are several steps required of married applicants with reverse mortgages, even if you were not on title.
  If you were on title to the property at the time with your ex-husband, that would be even more cause to seek legal assistance to review the legality of the loan he entered without your consent. Once the attorney has the opportunity to see who did what, he or she will be able to tell you who is responsible for what actions and who you might be able to look to for repayment if any.
  Reply to Michael
Susan F.
May 3rd, 2020

I am 62, but my husband is not. We live in Texas, so how can I get a reverse mortgage? File for divorce and then re marry my spouse?
Reply to Susan
- Michael Branson
  May 3rd, 2020
  
  Hello Susan,
  
  I do not know how far behind you your husband is in age, but I certainly would not recommend such an action without extensive legal consultation.
  With heirship rights being what they are in that state, I would not do anything without first consulting an attorney to determine both heirship and taxation issues that it would cause.
  In addition to that, if you did such a maneuver, your spouse would not be covered under the terms of the reverse mortgage and the loan would become due and payable when you permanently left the property (if you passed or had to move to a care facility, etc.).
  You are far better off to wait until the younger spouse reaches the age of 62 if that is possible.
  Reply to Michael
Richard C.
March 16th, 2020

My sister and her husband took out a reverse mortgage together 4 years ago. They are divorcing and she wants to stay in the house. Does her husband have any claims to her having to pay him for any shared equity they may have in the house?
Reply to Richard
- Michael Branson
  March 16th, 2020
  
  Hello Richard,
  I can tell you that the reverse mortgage would remain in place and valid if one original borrower on the loan is still living in the property as their primary residence. So, under the terms of the reverse mortgage where two borrowers are on title and are divorcing, if one of them remains living in the home the reverse mortgage is not required to be repaid at that time.
  I cannot tell you what property division requirements the court may impose upon the divorcing parties though. Since the property settlement of the divorcing individuals has nothing to do with the loan, I'm afraid I can't help you with this information.
  To obtain this type of information you really need the assistance of a family law attorney and in all honesty, I'm not entirely sure that individual can tell you with 100% certainty what the court would ultimately decide at the proceeding, but that would be your best place to start.
  Reply to Michael
John
November 25th, 2019

My ex is still showing up on something, so they won't do a reverse mortgage. It's been 8 years and I've sent them a certified copy of the divorce. What now?
Reply to John
- Michael Branson
  November 25th, 2019
  
  Hello John,
  
  I am sorry but this is a little too vague for me to answer. What is your ex showing up on? If you have title to the property, in other words, it was awarded solely to you in the divorce, you should have no trouble with the loan.
  If your ex is still on title and still has an interest in the property, the timeframe doesn't make any difference, you would not be able to get a reverse mortgage without her consent (or any other loan for that matter).
  You need to ask the lender or title company exactly what "she is showing up on" so you can determine what you need to do or if there is anything you can do at this point.
  It may take the assistance of an attorney if it turns out that it is a legal issue with liens in her name that don't affect you or occurred after your divorce and should not have been placed against the property because she no longer had any interest in the property. But you won't know what you need to do until you know what you are up against and I can only guess at this point.
  Reply to Michael
Judi N.
November 20th, 2019

Can my ex-husband get a reverse mortgage when I am primary on the first mortgage and we both are on the title? According to the divorce agreement, he has the "use and privilege" of the property if he maintains it and pays all payments.
Reply to Judi
- Michael Branson
  November 20th, 2019
  
  Hello Judi,
  
  If you are both on title, he would need your participation to be able to get the loan but it could be done, even without your signing off the title.
  You should make sure you understand all the terms of the loan though because there are no payments required with a reverse mortgage and the balance would increase if he made no payments which could also lower your equity in the property as well.
  Reply to Michael
Richard
November 4th, 2019

I have been separated for 10 yrs. from my wife she filed for divorce 3 years ago still in the courts can she take a reverse mortgage on the house even when my name is still on it and I don't sign anything meaning can she do that without my knowledge.
Reply to Richard
- Michael Branson
  November 4th, 2019
  
  Hello Richard,
  
  If you remain on title and the divorce is not final, she cannot take a reverse mortgage without your participation and signatures. If the divorce becomes final and she is awarded the home through the divorce, she would no longer need your participation and could get the loan on her own.
  Reply to Michael
Matthew N.
October 6th, 2019

I am divorced 8 years. My wife was fully awarded our house. My name was never removed from the loan. She never refinanced due to poor credit and low income. I have two questions: 1) Can she obtain a reverse mortgage without my signature? 2) If she does get a reverse mortgage can my name finally be removed from the loan?
Reply to Matthew
- Michael Branson
  October 6th, 2019
  
  Hello Matthew,
  
  If your ex-wife was awarded sole ownership of the home and the liability, then it should make no difference that your name is still showing on the loan itself. Once you are removed from liability and ownership by court order, no lender should ever consider this property or debt when considering your creditworthiness.
  The loan documents are recorded, and they do not change so it will still be a matter of record but if you have your divorce decree, it should not affect you. If she ever does refinance the loan, with a reverse mortgage or any other loan, that loan would be paid off and you would not show on the new loan.
  If she took our secondary financing that did not pay off the first lien, it will still be the same as we discussed above -you are not liable for the debt, but public records will still show it.
  About your wife obtaining a new loan (reverse or otherwise), if she was awarded the property and it is now in her name alone, she does not need your involvement or signature on any documents to obtain any loan at this time. Your name again would not be "removed" from the old loan, but it would be paid in full from the refinance transaction and so the old Deed of Trust or Mortgage would no longer be a lien of record.
  Reply to Michael
Dario D.
August 8th, 2019

If I remarry can my wife stay in the home on a reverse mortgage?
Reply to Dario
- Michael Branson
  August 8th, 2019
  
  Hello Dario,
  
  I am assuming you are asking if your new spouse can remain in the home with no payments on the reverse mortgage that was closed before you married her, is that correct? The answer to that would be no.
  She can stay in the house if you leave the home to her, but the loan would become due and payable and she would have to refinance the loan or pay if off with other funds available to her. She would not be able to just continue the old loan since she is not a borrower on the loan at the time the loan was closed.
  Reply to Michael
  - Yvonne Zumalt
    September 9th, 2019
    
    My husband and I are divorcing. We currently own two homes, one we are selling soon and the other is on a reverse mortgage that he wants to live in after the divorce and I can't afford. I will need to purchase another home with the equity in the non reverse home that will be sold and reverse a new home for myself. Am I understanding correctly that all we have to do is present the reverse mortgage lender the divorce decree to get my name removed from the reverse so I can then purchase another home with a reverse that is more affordable for me after the divorce? Hope this makes sense. Thanks!
    Reply to Yvonne
    - Michael Branson
      September 10th, 2019
      
      Hello Yvonne,
      
      As long as your divorce settlement papers specifically state that your ex-spouse is to retain the family residence with the existing reverse mortgage and the obligation thereon and relieves you of that property and obligation, yes, you can get a new reverse mortgage as a single individual in your own name on the new property.
      The legal docs are recorded for the existing loan and so you are not "removed" from that property and transaction, but the loan is non-recourse and the only security the lender and HUD have ultimately anyway is the property.
      Reply to Michael
Gary W.
July 21st, 2019

My wife and I were divorced four years ago in Florida. I took out a reverse mortgage two years ago in only my name. My X is now suing me for a share of the monthly payments I receive, can she win in court?
Reply to Gary
- Michael Branson
  July 21st, 2019
  
  Hello Gary,
  
  I am sorry, this is one for a licensed attorney in your area. It really has nothing to do with the loan but with legal rights and as we are not attorneys, we must refer you to a licensed attorney to answer this question for you.
  Reply to Michael
Kay O
July 20th, 2019

Husband and I are separated. If he agrees, can his name be removed from the mortgage as well as the deed? He needs to be released from the mortgage. I would remain,living in the house. No money would be exchanged. I do not want the cost to refinance in my name only. Thanks.
Reply to Kay
- Michael Branson
  July 21st, 2019
  
  Hello Kay,
  I am afraid that the original docs will remain as recorded unless you pay off the loan. As you already acknowledged, that would require you to refinance the loan or sell the house. Otherwise, there is no penalty for him leaving and you can still remain in the home, but he will still be on the loan as well.
  Reply to Michael
Gary W.
July 15th, 2019

My wife and I were divorced four years ago. I took out a reverse mortgage two years ago in only my name. My X is now suing me for a share of the monthly payments I receive, can she win in court?
Reply to Gary
- Michael Branson
  July 15th, 2019
  
  Hello Gary,
  
  I am sorry, this is one for a licensed attorney in your area. It really has nothing to do with the loan but with legal rights and as we are not attorneys, we must refer you to a licensed attorney to answer this question for you.
  Reply to Michael
Grace
June 17th, 2019

We have a Reverse Mortgage and are in the process of a divorce. Both our names are on the Reverse Mortgage, I would like to stay in our home. Do I have to "buy him out" in order to continue to keep my house with the existing Reverse mortgage under only my name?
Reply to Grace
- Michael Branson
  June 17th, 2019
  
  Hello Grace,
  
  Whatever arrangements you make between yourselves on the disposition of the property is totally up to the two of you. The loan would not be affected and would remain in place and in good standing as long as at least one original borrower remains living in the home as his or her primary residence.
  If that includes a buyout of some sort, that would be up to you to determine and may ultimately require the input of a court, but the loan would not be impacted as long as at least one of you remains in the home.
  Reply to Michael
Mary Ellen C.
June 10th, 2019

Husband & I are getting divorced and I will be moving out in a couple months. He needs to pay me off as he will be staying in the house. Do I need to get my name off the title before he can get a RM? He currently has a loan, my name is not on it but on title, and he was told by an "agent" that he would end up with only $10,000 even though there is over $300,000 in equity, & 73 yrs. old. Does this sound accurate?
Reply to Mary
- Michael Branson
  June 10th, 2019
  
  Hi Mary Ellen,
  
  I have no way to know if the numbers are accurate because the amount, he would receive is a percentage of the value of the home. If the home is worth $400,000 and he has over $300,000 equity, that would not be right. If the home is worth $800,000 and he has a large mortgage to pay off, that may be correct. I would have to see all the paperwork to determine if the numbers you cite are accurate given his age and the parameters of the loan.
  I can tell you that HUD has no requirement that your name not be on title though. There were requirements that people who were not living in the home could not be on title but that changed when HUD issued their Final Rule a couple years back. It would seem to me that there is no benefit for the reverse mortgage though if he cannot get the funds to pay you from the loan and you may both benefit from selling the home and downsizing.
  You could both take your proceeds (if you are splitting, I don't know and that's between the two of you) and buy homes if you are both now 62 and overusing the reverse mortgage for purchase program on different properties. Something to think about.
  Reply to Michael
Paula
June 5th, 2019

My husband and I bought a home and divorced 25 years later. The divorce agreement states that I could remain in the house if I wished and that he would pay the mortgage, taxes and insurance. Now, 2 years later he is trying to obtain a Reverse Mortgage. Can he do that without my signature?
Reply to Paula
- Michael Branson
  June 5th, 2019
  
  Hi Paula,
  
  The reverse mortgage requires that the borrower is on title and living in the home as their primary residence. Even if he still retains title to the property, if you are living in the home and he is not, he would not qualify for a reverse mortgage since the home is not his primary residence. If he represents to a lender that he is occupying the home as his current residence and he is not, that would be a fraudulent act.
  
  About your signature requirements, that is a whole different issue. You would be required to sign legal documents for any reverse mortgage if you were on title to the property, if you were still married, or if you had could claim any ownership interest in the home.
  If you were still married, even if you were not on title to the property, you would still be required to sign legal documents for a reverse mortgage as the spouse. If the property is in yours and your ex-husband's name, he should not be able to get any loan without your signatures as the lender cannot lend if everyone on title does not agree to the loan.
  If he is the only one on title, I cannot honestly tell you what the legal requirements are or what the lender for any other loan type would require in your state if he wanted to take out another loan to refinance the existing loan with new financing based on the terms of your divorce. For that answer, you really need to speak with an attorney in your area.
  Reply to Michael
Hilary
May 29th, 2019

My husband and I are divorcing. He wants to do a reverse mortgage to give me my half of the house. How does this leave me legally?
Reply to Hilary
- Michael Branson
  May 29th, 2019
  
  Hello Hillary,
  
  I am afraid I cannot give you legal advice. I would have to refer you to an attorney to obtain information regarding any legal dispositions. I can tell you what the reverse mortgage can and can't do and although it's not the same, it may still be of some help, even if just to give you some topics to cover with your attorney.
  For instance, I have to assume that you are asking because he wants to do the loan now, while you are both still together and living in the home and your name would still be on the house or you probably would not care what he did after you left, am I correct? Assuming that is the case, if you do contact an attorney (and I do suggest that you do), I am sure that he or she will tell you that the reverse mortgage is a non-recourse loan.
  Which means that even if you leave the home and he stays there, even if there is a shortfall or loss by the lender later the property, the lender can never look to any other assets for repayment of the loan.
  In other words, the property is their only recourse for repayment of the debt. That is strictly from a lender's perspective regarding that specific debt. Your attorney may or may not have other issues to make sure you cover but divorce is an all too common occurrence so he/she will discuss how to protect you on other issues of liability.
  
  There is a potential downside if you are on the loan and then leave if you wanted to get another reverse mortgage. While the loan remains intact if at least one original borrower remains living in the home, it also means that if you are on the reverse mortgage on one property but then leave the home, you cannot get a reverse mortgage on a second property.
  This may not even be a problem for you if you never plan to buy another home but it could keep you from getting another loan later on your next home if you think you might want a reverse mortgage after you separate for as long as the first loan is still open with your name on it.
  
  Hope this helps a little anyway. I wish you the best in all your future endeavors, regardless of what path you choose.
  Reply to Michael
Carolyn P.
May 20th, 2019

My husband and I are both on the deed and got a reverse mortgage six years ago. We are separating and he has since been living somewhere else. When he's removed from the reverse mortgage does, he still have rights to the loan money?
Reply to Carolyn
- Michael Branson
  May 20th, 2019
  
  Hello Carolyn,
  If you are going through divorce and the home is being awarded to you by the court, you need to be sure to send that information to the lender/servicer. Just by separating, he is not "removed" from the loan. The servicer should never advance funds to an account that is not the one that was originally approved with both your names on the account, or a new account with both your names and both your signatures on the request for the change though without proper documentation. But this could also affect you if you plan to change your banking. The servicer will not place themselves in a position to where they are in the middle of a dispute so you may even want to contact them, let them know what is happening and request of them what documentation they will need in advance.
  Reply to Michael
Valerie W.
May 13th, 2019

My mom and stepdad took out a reverse mortgage four years ago......before that the house was my mom's free and clear.... now he's on the deed and divorcing her. Is he entitled to 1/2 the proceeds from the house now? He wants it sold and split now he's calling the house marital assets?!
Reply to Valerie
- Michael Branson
  May 13th, 2019
  
  Hello Valerie,
  
  I am afraid I cannot help you with this question as it is a legal question and not one regarding the reverse mortgage. It may hinge on who owned the home first, it might depend on what commingled assets went into the care and upkeep of the home and none of that may make any difference at all -it might be completely covered by state and local laws.
  At any rate, your mom should contact a competent attorney in the area to get the kind of counsel and representation she needs to protect her interests.
  Reply to Michael
Vladislav
May 13th, 2019

Hello I have a co-signer as my brother to put him in Title instead of my wife (getting divorce soon). Is that smart way to refinance house now by my age 61 to get cash out, if I'm looking to make reverse mortgage soon ? Thank you.
Reply to Vladislav
- Michael Branson
  May 13th, 2019
  
  Hello Vladislav,
  
  What you do with your brother now will not affect your decision to get a reverse mortgage later. What you do with the loans though may change what you do and when. If you refinance now with a regular loan and take more than $500 cash out in the transaction, HUD requires you to have 12 months' seasoning on that loan in order to be able to pay it off with the new reverse mortgage. If you have a Home Equity Line of Credit or HELOC, and take cash out of the property, you may have to wait for 12 months to get the reverse mortgage though, depending on the amount you take out and where that puts you in relation to HUD's rules. If the cash out HELOC is less than 12 months old, you cannot exceed 60% of your available Principal Limit to pay the loan off at closing or in the first 12 months. And to throw a 3rd contingency into the mix, the jumbo or proprietary programs typically do not have this same limitation so if you are doing a jumbo reverse mortgage, you may not have any waiting requirement either way.
  
  What you have to do with your brother later will depend upon whether you intend to keep your brother on title later when you get the reverse mortgage. If your plan is for your brother to come off title then, there are no issues. If he is to remain on title but he does not occupy the home, you can still get the loan but there will be different requirements and he would not be allowed to be on the reverse mortgage. For him to be on the loan to be covered by the terms of the reverse mortgage (able to live in the property for life without making a payment on the loan as well), he would also have to qualify for the loan including be 62 years of age or older and live in the home as his primary residence at the time you get the loan and continue to do so.
  Reply to Michael
Ksmith
May 6th, 2019

Due to divorce and death, I am now the co-owner of a two family residence with my ex brother in law. We jointly have a reverse mortgage. My brother in law has been in a nursing home for nine months. If after twelve months of no longer being able to claim the home as his primary address, does his name automatically come off of the reverse mortgage?
Reply to Ksmith
- Michael Branson
  May 6th, 2019
  
  Good Afternoon,
  
  His name does not come off the loan or off title. Because he does not live in the home, that does not alter the terms of the loan nor the parties involved. The loan still includes the names of the original borrowers and if you are also on the original loan, the loan is still in good standing as long as at least one of the original borrowers is still living in the home as their primary residence.
  
  One thing you say though raises a possible red flag. You say you are "I am now the co-owner of a two-family residence". Are you on the original reverse mortgage as a borrower or an eligible non-borrowing spouse? If you are, there is no problem with your ex brother in law no longer occupying the home since there is still at least one original borrower or eligible non-borrowing spouse from the loan occupying the property as their primary residence.
  However, if you are not a borrower or an eligible non-borrowing spouse on the original loan, once your ex brother in law has been absent from the home for over 12 months, that loan becomes due and payable and the lender will call the loan as soon as they become aware of this fact. You need not even worry about it if you are an original borrower or non-borrowing spouse and you should be looking into ways to retire the reverse mortgage through refinancing the loan or possibly even sale of the home if you are not and you believe he will not be able to return to the home.
  You should not wait for the lender to notify you that they are calling the loan due and payable but should start putting the plans in motion so that you are not caught flat-footed if you know now that the loan will be due in just a few months.
  Reply to Michael
Katherine G.
April 23rd, 2019

I am divorcing my husband. He wants me to sign a reverse mortgage on a house that is on his name only and is paid for. He is pressuring me, so HE will have money!
Reply to Katherine
- Michael Branson
  April 23rd, 2019
  
  Hello Katherine,
  
  I see no question here and the basis of the remarks is really a legal issue and not of the reverse mortgage anyway. I would suggest that you contact an attorney for legal advice to see what he advises. It may affect your division of property or liability and so I would strongly advise that you obtain competent legal counsel.
  Reply to Michael
James F
November 13th, 2018

I have a reverse mortgage in my name only, since my spouse was under 62 at the time. The reverse mortgage was taken in 2012. We are going through a divorce. When I leave the home, and notify the reverse mortgage company I am gone, how long can the spouse stay in the home?
Reply to James
- Michael Branson
  November 13th, 2018
  
  Hello James,
  
  I'm sorry to hear of your circumstances but if you and your spouse plan accordingly, there should be plenty of time to act. Your spouse will be subject to the same requirements as any other reverse mortgage property on which the borrower no longer occupies the property as their primary residence.
  I assume that your spouse also has title to the property now or will by the time you leave the home? In that case, your spouse will have the option of refinancing the home with a new loan, selling the property or walking away if that is preferable. Since 2012 is just 6 years ago and most properties had not yet begun to appreciate from the market crash, the chances are very good that there has been appreciation since the time you obtained the loan and therefore, there is equity in the home now.
  Your spouse should determine what they want to do with the property and plan accordingly now. If now financing or a sale is the determined plan of action, your spouse can start even before the lender makes the initial contact and the lender will work with your spouse for up to 12 months with extensions to allow for the sale or financing to complete the action if progress is being made. I wish you both the best.
  Reply to Michael
Rebecca
October 22nd, 2018

My grandfather, upon his and my grandmothers divorce, put my brother and myself as the heirs to my grandmothers living estate.

She purposely stopped paying the loan on the home in Dec. My brother and I didn't even find out the home and property would be ours until we saw foreclosure papers.

Grandmother is very ill. So, nothing is being done. 22k owed. Would an investor buy me and my brothers share? Draw up papers and skip probate?
Reply to Rebecca
- Michael Branson
  October 22nd, 2018
  
  Hello Rebecca,
  
  You and your brother really should contact an attorney for this advice, and probably sooner rather than later if this is already in foreclosure. You have mentioned a number of terms here that I could not even begin to guess at what is really the full story and even then, I cannot advise you legally. You said your grandmother's living estate. Did your grandmother hold only a life estate to the property? If so, the title passes to someone else upon her passing and if that is you and your brother, you really should know what your rights are before it is too late.
  
  I'm also confused in that if she had a reverse mortgage, there were no payments on the loan. Is she still living in the home and was it the taxes she stopped paying? Is the title in the name of a trust with your grandmother having a life estate for as long as she lived? An attorney can tell you all of these things if you are not sure as well as who the title reverts to upon her passing.
  Until you know these things, I don't even know if you have anything marketable to sell to an investor and if the foreclosure cannot be resolved in the short term, there would be nothing left to sell after the home sold at foreclosure auction. My strong advice is to contact a real estate attorney as soon as you can to find out just exactly where you stand and what your rights and obligations are.
  Reply to Michael
James F.
October 22nd, 2018

I have a reverse mortgage in my name only, the deed is in my name only. I(we) took the reverse mortgage before my wife was 62. We are now looking at divorce. What rights does my spouse have to stay in the house after the divorce? Would the house have to be sold? Could she remain in the house? We were told her name could be added when she turned 62. When she did turned 62, we tried, but was told we would have to pay all the fees again, almost $8,000 dollars!!! Thank you!
Reply to James
- Michael Branson
  October 22nd, 2018
  
  Hi James,
  
  If you have it in writing from your previous lender that you can add another borrower to an existing loan when they turn 62, I would certainly suggest you confront them and ask them to pay the fees for the new loan because you simply cannot. You cannot just add another borrower to the loan once a loan has been closed. You can add your spouse to the title of the property which allows them to sell the home or get a new loan in their name as the property owner, but it does not allow them to be a borrower on the existing mortgage. If that were the case, there would be no reason to exclude them in the first place! After all, if you were just going to allow the borrower to be added to the loan later, why not just allow them to be on the loan from the start and call it a day?
  
  In fact, that's what HUD did in 2014 when they changed the rules for borrowers with spouses who were no yet 62 years of age. However, they also took that second spouse's age into consideration when they determined the loan amount and borrowers with spouses under the age of 62 received a lot less money on the loan due to the fact that a younger spouse could conceivably live longer and accrue more interest in a lifetime.
  Be that as it may, borrowers who received their loans prior to the change, and who now do not have their spouse as an eligible non-borrowing spouse, must refinance the loan to add the spouse at a later date if that is what they wish to do. Your options are to refinance the loan with either a forward or traditional mortgage, with a new reverse mortgage or you can always sell the home if that is your preference. But unfortunately, you cannot just add someone who was not a borrower at the time the loan was closed to an existing reverse mortgage loan.
  
  I would strongly recommend that anyone who has been told they can just be added later or thinks that is what they were told that they realize that this is not the case. Borrowers who received their loans after HUD changed their rules must realize there are stipulations to the non-borrowing spouse being able to stay in the home after the borrowing spouse leaves and they are fully spelled out in the loan documents. Even then, the remaining non-borrowing spouse does not have access to the loan, even if there were still funds available on the line of credit. I urge all borrowers and family members to fully understand what it means to be a non-borrowing spouse and make certain the terms work for you you and your circumstances.
  Reply to Michael
Nita
October 1st, 2018

My husband and I have a HECM mortgage that we took out 2 years go. I am looking to get a divorce but do not want to change anything in regards to the home. I would like to leave it that my husband can reside in the home until he passes and then I would move back in.... Not asking to change the title in any way so that he can stay, pay all expenses associated with mortgage requirements and then when he passes I would take over. Would this void our mortgage as I would not be living in the house until he passes?
Reply to Nita
- Michael Branson
  October 1st, 2018
  
  Hi Nita,
  If you are living in the home at the time the servicer receives notification that your husband has passed, you would meet the terms and there would be no problems with the loan. If you waited until sometime after the lender called the loan because they had received notification that the property was no longer occupied by either of you, that could cause you problems. I would suggest that you contact the servicer in advance to discuss your options in this matter. You are supposed to occupy the home as your primary residence and if you move out for a number of years then plan to move back, I don't know if they will consider that adequate to meet the occupancy requirement.
  Reply to Michael
Janice Goodger
January 25th, 2018

My husband and I purchased our home with a reverse mortgage using his IRA money for the down payment. We have been in the house for almost 7 years. If we divorce and I leave, what happens the mortgage, my obligation to that mortgage and can I force him to sell the house?
Reply to Janice
- Michael Branson
  January 25th, 2018
  
  Hello Janice,
  I'm sorry, but you are asking me legal questions that really do not pertain the to mortgage, but rather to the divorce laws in your state. I cannot give legal advice and would have to refer you to competent legal counsel for these questions.
  Reply to Michael
Sylvia M.
January 21st, 2018

My husband has asked that I consider a reverse mortgage, however, we are in the process of a divorce. He wants to keep the house but has lousy credit and cannot obtain a regular loan to buy me out. What are the pros and cons to considering this process? If one spouse signs a quick deed are they still responsible for the loan even though there would be a decree to be held harmless in his obligation to loan company?
Reply to Sylvia
- Michael Branson
  January 21st, 2018
  
  Hi Sylvia,
  
  There are several things to consider. Firstly, it is a felony to knowingly make a false statement in order to obtain a federally insured loan. If you get the loan and then subsequently get a divorce and move, there is no further liability as the loan is a non-recourse loan anyway (meaning the lender can only look to the property for security on the loan). However, if you secure the loan through false statements, there could be other repercussions and I would encourage you to seek legal counsel to determine your liability in that instance.
  
  A second thing to consider is if you do get the loan and then subsequently decide to divorce, you may not have any liability on the property, but your name is on the first loan and you would not be able to get a second reverse mortgage on another property if you were so inclined later. If you know you are leaving, it would be much better if your husband could get the loan on his own and then you would be eligible for a reverse mortgage of your own on another property if that was your desire. Things to consider.
  Reply to Michael
Nancy
October 19th, 2017

My husband and I have a Reverse Mortgage. I plan to leave him and give him the house. How will I go about getting my name off the Reverse Mortgage and the Title to the house? And once I do will that relieve me from all future responsibilities towards this house, thus property taxes, fire, whatever? Thank you.
Reply to Nancy
- Michael Branson
  October 19th, 2017
  
  Hi Nancy,
  
  The reverse mortgage is a non-recourse loan and the lender and HUD have no other assets from which they can seek repayment other than the property. With regard to future responsibilities, you should consult an attorney to determine exactly what the divorce will absolve you of and what you need to do to make certain you are covered.
  Reply to Michael
LeAnne V.
June 28th, 2017

My parents have a reverse mortgage for over 10 years. 5 years ago they divorced. my dad got the house in the divorce but my mom has continued to live in the house. recently my dad passed away. Both parents are on the reverse mortgage. What happens to the house and mortgage.
Reply to LeAnne
- Michael Branson
  June 28th, 2017
  
  Hello LeAnne,
  
  I am not an attorney and cannot tell you what the ramifications for the property dissolution will be but the loan is still valid for the time being if mom is still on title. The reverse mortgage requires that at least one original borrower remain living in the home as his/her primary residence for the terms of loan to be met and your mom is an original borrower still living in the home. As long as she still has some title to the property, she can continue to live in the home per the terms of the mortgage for as long as she desires. That does not override any court decisions on the title though or subsequent changes.
  
  The devil will be in the legal details. Did they transfer the title solely to dad at the time of divorce? And if so, who does it go to upon dad's death (because if mom is not included, she is no longer on title)? Once the entire title is transferred from both original borrowers, then there is a due on sale clause in the documents that would be triggered and the loan would be due and payable. The question of ownership and right to occupy is one for the courts to decide and I cannot begin to express an opinion there. The courts could side with mom and give her the right to occupy but if the title has passed and none of the original borrowers are on title any longer, the loan could still become due and payable at this time.
  
  My advice would be to seek competent legal counsel to verify your rights and obligations so that mom is not left hanging at any time. The attorney can review the current title, the loan documents (particularly the Note as it contains the language regarding the due on sale provision) and the divorce paperwork to determine where mom stands with everything at this time.
  Reply to Michael
Gary
June 3rd, 2017

My sister and her husband bought a home in 1976 in Las Vegas, Nv. They divorced in 1992. The divorce papers state that when my sister sold, she would be required to give her ex 1/3, my sister 1/3 and their 2 children split 1/3. My sister never sold it, never did a refi and paid off the home in 2006. She never intends to sell. Now she's fallen on hard times due to medical bills. She would to do a reverse mortgage, pay the ex and get a money monthly from a reverse mortgage. Ex will not reply with an answer to reverse mortgage. Home is worth approx $200k. There is one lien from sanitation district dated 1992. Is there anyway for her to obtain a reverse mortgage without ex's signature. I checked with county recorder, both names are still on there.
Reply to Gary
- Michael Branson
  June 5th, 2017
  
  Hi Gary,
  A reverse mortgage is a loan just like any other loan with the only difference being the payments or lack thereof. If your sister would like to clear title to allow for other loans to be placed on the property, my suggestion would be to consult with an attorney or with the courts. As far as I know, that would be the only way to have someone removed from title.
  Reply to Michael
Brian
December 11th, 2016

My parents (mother and step father) were divorced and then took out a reverse mortgage. My step father died then my mother. I payed off the reverse mortgage as I wanted to take possession of the house. My step siblings then said they want the money and are basing their share off of the total appraisal of the house and not the difference of what I paid to satisfy the reverse mortgage? What happens in this situation?
Reply to Brian
- Michael Branson
  December 12th, 2016
  
  Hi Brian,
  I'm sorry, this is a call for an attorney to advise you on and my take a court to ultimately make. The reverse mortgage has no bearing on this issue and I certainly cannot advise you in this area.
  Reply to Michael
Ray D.
September 5th, 2016

What if my divorce was twenty-four years ago? I let my ex-wife and kids stay in the house, assuming that one day she or they would buy me out. Two of them have moved out. They all seem to think I owe her my half, though this is not what our final judgement said. So now I'm going to court to force the sale of the house. I would actually be happy to find a way to take out half the equity (which could be up to 400K) for myself, while enabling her to stay in the home. A good friend mentioned a reverse mortgage. If she is willing, how might a reverse mortgage work for us?
Reply to Ray
- Michael Branson
  September 6th, 2016
  
  If one of you were to remain on title and remain in the home, that individual can obtain a reverse mortgage on the property but the loan would not allow her to take $400,000 as a lump sum if there are no current liens on the home. HUD changed the payout options on the reverse mortgage a few years back and now borrowers can take up to their full benefit amount, or the Principal Limit, only if those funds are needs to pay off "mandatory obligations". Mandatory Obligations are bona fide liens and mortgages against the property that would need to be paid in full in order to obtain the reverse mortgage.
  
  This further make matters a little tougher in your case, those loans must have a seasoning of at least 12 months if the loan was used to take cash out of the property. In other words, your wife could not run out and obtain a short-term loan to pay you off and then use a reverse mortgage within a few months to retire that debt. The reverse mortgage could only be used to pay off an existing lien on which money had been extracted from the property if that lien was over 12 month's old.
  
  If your ex-spouse were to take a loan out today to pay you off, she could use the reverse mortgage after 12 months to retire the loan but the gamble that you must always keep in mind is that interest rates, potential HUD changes to the program and economic changes to property values, etc. could always affect her ability to obtain that loan later. If this is the path she chooses, she needs to make sure she has a "Plan B" in the even anything were to limit or remove her ability to qualify for the reverse mortgage later if she could not continue to make the required payments on the interim loan.
  Reply to Michael
Jim McNair
May 17th, 2013

My wife and I are getting a divorce Would like to know how the equity is handled. I put cash down she traded in her house as part of the down payment
Reply to Jim
- Michael Branson
  May 29th, 2013
  
  Hi Jim,
  I'm sorry, but this is not a question for us. The equity in the home still belongs to you and your wife. Whether you choose to sell the home as part of your arrangements or whether one of you will keep it or what, the equity is still yours. If you were to sell the home now, any equity in the property still belongs to you and your wife. Any arrangements to split the equity, determine payouts, etc. are completely separate from the reverse mortgage.
  Reply to Michael
Michael Branson
May 10th, 2013

Hello Kimo,

More than you would think. Today I quoted a reverse mortgage for a couple starting divorce proceedings on a home in southern California worth approx. $1.25M. Mr. would like to stay in the home and can cash out $430k cash to Mrs. Tax free. Mr. will be able to stay in the home for life without making any mortgage payments while Mrs plans to purchase a smaller home with cash from the reverse mortgage proceeds.
Reply to Michael
Kimo Jarrett
November 8th, 2012

How many divorces occur at age 72 or even beyond 62 with spouses that own their home or have equity? Not many reverse mortgage opportunities in my opinion and neither relevant based on any reliable data or am I mistaken?
Reply to Kimo

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