A reverse mortgage (most are FHA-insured HECMs) lets homeowners 62+ borrow against their equity without monthly mortgage payments. But it is still a loan, and it can still be foreclosed — a fact that surprises many families.
How a reverse mortgage ends in foreclosure
Even with no monthly mortgage payment, the borrower must keep paying property taxes, homeowners insurance, and basic upkeep, and must live in the home as their primary residence. Falling behind on taxes or insurance, or being away too long, can trigger a default and foreclosure. Servicing errors make it worse: as reported by HousingWire, a Virginia widow filed a federal lawsuit after she was foreclosed on following her husband's death in December 2024, with the home foreclosed by June 2025.
The scale of the problem
A USA TODAY investigation of 1.3 million loan records found that nearly 100,000 reverse mortgages have ended in foreclosure, and that foreclosures happen about six times more often in predominantly Black neighborhoods. For many families, the loan quietly drains the equity that would have been an inheritance.
What you can do
- Stay current on taxes and insurance. This is the most common trigger — and the most preventable.
- Know the non-borrowing spouse rules. A surviving spouse may be able to stay under certain protections; get this in writing.
- If you're an heir on a deadline, you generally can sell the home to pay off the balance and keep any remaining equity, or refinance to keep it. Acting fast matters.
- Use a free HUD-approved HECM counselor (1-800-569-4287) to understand your specific options.
We help Northeast Florida families navigate exactly this — especially inherited homes and probate, where a reverse mortgage and a tight deadline collide. If you're trying to protect a parent's home or settle an estate, reach out and we'll help you understand the clock you're on and the choices you have.
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