Non-Borrowing Spouses (NBS) When Doing a Reverse Mortgage
There has been litigation involving what is referred to as a non-borrowing spouse. This is a spouse that does not remain on title and does not participate as a borrower of a Reverse Mortgage.
In the past, if a spouse stayed off title and did not participate in the Reverse Mortgage when their spouse did, the loan because due and payable when the borrowing spouse died.
HUD Mortgagee Letter 2014-07 established some new guidelines and HUD Mortgagee Letter 2015-02 updated some guidance.
In general, a spouse may stay off the loan yet will be allowed to remain in the home after the death of the borrower. However, if the borrower was taking monthly payments or had access to a line of credit, those will cease upon death. The NBS will not have access to any additional funds.
Additionally, future spouses will not qualify. The only way to do so would be to refinance the Reverse Mortgage with another Reverse Mortgage.
