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
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