When must Mortgagees submit HECM Due and Payable requests or notify HUD of Due and Payable status?

When HUD approval is required to call a Home Equity Conversion Mortgage (HECM) due and payable, Mortgagees must submit a due and payable request to HUD via the Home Equity Reverse Mortgage Information Technology (HERMIT) system within 30 days of a HECM becoming eligible for “Due and Payable” status.

Mortgagees must notify HUD within 60 days of a HECM becoming due and payable without HUD approval or the end of a Deferral Period. The Mortgagee must take whatever steps are necessary to ensure they are able to provide such notice.

Where state privacy laws impair a Mortgagee’s ability to acquire relevant information about the death of a borrower or an Eligible Non-Borrowing Spouse, the Mortgagee must:

  • notify HUD of the “Due and Payable” status within 30 days of the end of the state’s privacy law restriction on the Mortgagee’s access to the information; and
  • provide the relevant state law and a detailed explanation supporting the delay.  

When a mortgage is due and payable as a result of a borrower’s death or a Deferral Period ends as a result of an Eligible Non-Borrowing Spouse’s death, the Mortgagee may accept verbal notification of the death from the heirs or estate for “Due and Payable” purposes. Mortgagees must still obtain documentation of the death of the borrower or Eligible Non-Borrowing Spouse for foreclosure and claim purposes.

The Mortgagee must enter the borrower’s “Date of Death” and create the appropriate Due and Payable Timeline in HERMIT to provide notice to HUD. The entry of such information in HERMIT will:

  • change the loan status to “Due and Payable;” and
  • halt future scheduled loan advances in HERMIT as of the date this information is submitted.  

For more information see Mortgagee Letter 15-10 available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
Any additional questions may be directed to the FHA Resource Center at Toll-Free (800) CALLFHA (225-5342) or by email to answers@hud.gov. Persons with hearing or speech impairments may reach this number by calling the Federal Information Relay Service at (800) 877-8339.

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02440