A reverse mortgage borrower dies, and their non-borrowing spouse who is under 62 continues to live in the home. What is the most likely outcome?
Correct Answer
C) The spouse may be eligible for a deferral period under certain conditions
Under HUD's Mortgagee Letter 2014-07 and subsequent guidance, eligible non-borrowing spouses under age 62 may qualify for a deferral period allowing them to remain in the home without the loan becoming immediately due, provided they meet specific eligibility requirements including maintaining the property and paying obligations.
Why This Is the Correct Answer
Under HUD's Mortgagee Letter 2014-07 and subsequent guidance, eligible non-borrowing spouses under age 62 may qualify for a deferral period allowing them to remain in the home without the loan becoming immediately due, provided they meet specific eligibility requirements including maintaining the property and paying obligations.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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