Are HECM borrowers still considered in default if they bring all property charges current?

At any time prior to a foreclosure, a Home Equity Conversion Mortgage (HECM) loan will no longer be considered to be in default if a Borrower or an Eligible Non-Borrowing Spouse becomes current on all property charges, including having repaid all corporate advances made by the Mortgagee (if any) and has fully cured any outstanding reasons for default. If the loan was called due and payable, and foreclosure proceedings were initiated, HUD’s regulations regarding reinstatement found at 24 CFR §206.125 apply. Where the last surviving borrower has died and there is an Eligible Non-Borrowing Spouse, the Deferral Period Reinstatement provisions of Mortgagee Letters (ML) 15-02 and 15-15 will apply.
For more information see ML 15-15, 15-11 & 15-02  available at
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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-04998