Can a Mortgagee permit an Eligible Non-Borrowing Spouse to cure conditions that caused the Deferral Period to cease after foreclosure proceedings have begun?

Yes, even after a foreclosure proceeding has begun, the Mortgagee shall permit an Eligible Non-Borrowing Spouse to cure the condition which resulted in the Deferral Period ceasing, and to reinstate the Home Equity Conversion Mortgage (HECM) and Deferral Period, and the mortgage insurance shall continue in effect. The Mortgagee may require the Eligible Non-Borrowing Spouse to pay any costs that the Mortgagee incurred to reinstate the HECM, including foreclosure costs and reasonable attorney’s fees. Such costs may not be added to the mortgage balance and must be paid from some other source of funds. The Mortgagee may refuse to reinstate the HECM and Deferral Period if:
  • The Mortgagee has accepted a reinstatement of either the Deferral Period or mortgage within the past two years immediately preceding the current notification to the Eligible Non-Borrowing Spouse that the mortgage is due and payable; Reinstatement of either the Deferral Period or mortgage will preclude foreclosure if the mortgage becomes due and payable at a later date; or Reinstatement of either the Deferral Period or mortgage will adversely affect the priority of the mortgage lien. 
For more information see Mortgagee Letter 15-02 available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee


Any questions may be directed to HUD’s National Servicing Center at (877) 622-8525. 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-02485