The government has added further protections to reverse mortgage borrowers' spouses who are not named in the loan agreement, but placed conditions under which they are ineligible for older protections.

The rules for federally insured reverse mortgages, known as Home Equity Conversion Mortgages, used to require a surviving spouse who did not cosign the loan to repay it when the borrower died. To maximize loan proceeds, which are determined by estimating how long the last surviving borrower will live, originators would often leave the younger spouse off the loan. Last year, following litigation contesting foreclosures on surviving spouses, the Department of Housing and Urban Development changed its policy for new loans, allowing the unnamed widow or widower to defer repayment provided certain conditions were met.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry