How to Stop a Reverse Mortgage Foreclosure: Cures and Extensions

To stop a reverse mortgage foreclosure, respond to the lender’s Due and Payable notice within 30 days with one of four cures: pay the loan off, sell the home for at least 95% of its appraised value, deliver a deed in lieu of foreclosure, or fix the underlying default (usually unpaid property taxes or lapsed insurance) and enter a repayment plan.¹ Which cure fits depends on why the loan was called due and who you are in the picture: the borrower, a surviving spouse who wasn’t on the loan, or an heir.

You have more time than 30 days in practical terms. HUD gives the lender six months from the due date to actually commence foreclosure, and the lender can request up to two 90-day extensions from HUD if you can show you’re working the problem, for example by actively marketing the property.² But silence is fatal. If nobody responds inside the 30-day window, the lender is required to move forward.

The Four Cures That Stop the Clock

Every path to stopping the foreclosure runs through one of these responses to the Due and Payable notice:

Pay the loan balance in full.
Sell the home for at least 95% of its appraised value. HUD’s mortgage insurance covers any shortfall between the sale price and the loan balance if the 95% threshold is met.
Sign over a deed in lieu of foreclosure. The lender must accept a deed in lieu submitted within nine months of the due date.¹
Cure the specific default. If the loan was called due because of unpaid property charges, you can bring those charges current or enter a repayment plan with the servicer.

The last option is the one most people are actually looking for when they want to stop a foreclosure and keep the house. It only exists if the default is one you can fix — unpaid taxes, lapsed insurance, or a maintenance issue. If the loan was called due because the last borrower died or moved out permanently, the cure options belong to heirs or a surviving spouse, covered below.

Repayment Plans for Unpaid Property Charges

When you’ve fallen behind on property taxes or homeowners insurance, the servicer typically advances the overdue amount and then spreads repayment across monthly installments. Under HUD guidelines, these plans can run up to 60 months, and the monthly payment cannot exceed 25% of your surplus income.³ The plan may be shorter if your loan balance is approaching 98% of the Maximum Claim Amount, since HUD requires the arrears to be repaid before the loan hits that ceiling.

To qualify, you have to show enough residual income to cover regular monthly expenses, ongoing property charges, and the new repayment amount. HUD sets residual income standards based on household size and region; the servicer runs your numbers against the standard for your area.³

Assemble your paperwork before or alongside your first call to the servicer. You’ll need a written hardship letter explaining why you fell behind, a breakdown of monthly household income from all sources (Social Security, pensions, investment income), a list of monthly expenses (utilities, medical, other obligations), your most recent property tax bill, and your homeowners insurance declarations page. HUD recognizes hardships including job loss, reduced income, increased property taxes or HOA assessments, a natural disaster, long-term disability or serious illness, and divorce or legal separation.⁴

Once you’re on a plan, stay on it. A single missed payment can restart the foreclosure process, and you’ll also need to keep new property charges current throughout the repayment period.

At-Risk Extensions for Borrowers 80 or Older or Seriously Ill

Borrowers who are 80 or older, or who have a critical health circumstance affecting them or a household member, can request an At-Risk Extension that pauses foreclosure. Under rules updated in 2024, the extension remains in place as long as the borrower continues to live in the home, removing the older requirement to reapply every year.⁵

To request one, you’ll need medical documentation of the health impairment or proof of age. The servicer then applies to HUD for the delay. A HUD-approved counselor can help document the request if the servicer is slow to move.

If You’re a Surviving Spouse Who Wasn’t on the Loan

When your spouse dies and you weren’t listed as a borrower, you may still have the right to stay in the home. Which rules apply depends on when the loan was originated.

Loans With FHA Case Numbers Assigned on or After August 4, 2014

Under 24 CFR 206.55, the loan’s due-and-payable status is deferred as long as you continue to meet all qualifying conditions.⁶ To qualify you must have been legally married to the borrower when the loan closed and remained married until the borrower’s death, been disclosed to the lender at origination and specifically named as a non-borrowing spouse in the loan documents, and lived in the home as your primary residence continuously since closing.

Within 90 days of the borrower’s death, you must establish legal ownership or another legal right to remain in the property for life, and you must continue meeting all loan obligations (taxes, insurance, maintenance). If any condition fails, the deferral ends and the loan becomes immediately due and payable with no opportunity to cure.

Loans Originated Before August 4, 2014

Older loans don’t have automatic deferral. The lender can, however, use a Mortgagee Optional Election Assignment: it assigns the loan to HUD and you enter a deferral period on essentially the same eligibility terms as the post-2014 rule.⁷ The catch is in the name: it’s optional. The lender is not required to use it. If your spouse held a pre-2014 HECM, contact the servicer immediately, and consider bringing in a housing counselor or an attorney experienced with reverse mortgages if the servicer is unresponsive.

Under both pathways, the lender verifies occupancy annually. If you move out, fall behind on property charges, or let the home deteriorate, the deferral ends and the loan becomes due.

If You’re an Heir

If you’ve inherited a home with a reverse mortgage, the loan becomes due when the last borrower or eligible non-borrowing spouse dies. You are not personally liable for the debt. HECMs are non-recourse: the lender cannot come after your other assets or the rest of the estate if the loan balance exceeds the home’s value.⁸ You have three basic choices:

Pay off the loan and keep the home. You pay the lesser of the outstanding loan balance or 95% of the current appraised value. If the home is worth more than the debt, you pay the debt; if it’s underwater, you pay 95% of the appraised value.
Sell the property and use the proceeds to satisfy the loan. If the sale price covers at least 95% of the appraised value, HUD’s mortgage insurance covers any remaining balance.
Walk away. Provide a deed in lieu of foreclosure or let the lender foreclose. Because the loan is non-recourse, you owe nothing beyond the home itself.

You have six months from the due date to pay off or complete a sale, with two potential 90-day extensions from HUD if you can show the property is actively being marketed.² Silence forces the lender’s hand. If it hears nothing from you, it has to foreclose.

What Happens After You Apply

Send your loss mitigation package by certified mail, or through the servicer’s secure portal or fax line if offered, and keep copies of everything. Once a complete application is on file, HUD guidelines generally require the servicer to pause foreclosure while the evaluation is pending. Processing typically runs 30 to 60 days.

You’ll get a written decision. If it’s approved, read the repayment agreement carefully before signing: the terms will spell out the monthly amount, the length of the plan, and what happens if you miss a payment. If it’s denied, ask about a review and put your disagreement in writing. Forward FHA borrowers have a formal 14-day appeal window with a 30-day servicer response requirement; reverse mortgage servicing follows HUD’s own protocols, but documenting your objection and requesting a supervisor review is still the right move.⁹ A denial is also the moment to bring in a counselor if you haven’t already.

Free Help From a HUD-Approved Counselor

HUD-approved housing counselors specialize in reverse mortgage issues and can help you weigh options, prepare documentation, and push back on a servicer at no cost. They are especially useful for non-borrowing spouse deferrals, heir situations, and denials you think were wrong. Find one through the Consumer Financial Protection Bureau at consumerfinance.gov/find-a-housing-counselor or by calling 1-855-411-2372.¹⁰ Call early. The earlier a counselor is involved, the more leverage there is to work with.

1
eCFR. 24 CFR 206.125 – Acquisition and Sale of the Property
2
Department of Housing and Urban Development. HUD Handbook 7610.1
3
U.S. Department of Housing and Urban Development. Mortgagee Letter 2015-11 – Loss Mitigation Guidance for HECMs in Default Due to Unpaid Property Charges
4
Department of Housing and Urban Development. Mortgagee Letter 2025-06 – Updates to Servicing, Loss Mitigation, and Claims
5
ACL.gov. New Protections for Older Homeowners with HECM Reverse Mortgages Practice Tip
6
eCFR. 24 CFR 206.55 – Deferral of Due and Payable Status for Eligible Non-Borrowing Spouses
7
U.S. Department of Housing and Urban Development. Mortgagee Letter 2015-03 – Mortgagee Optional Election Assignment for HECMs
8
Consumer Financial Protection Bureau. What Happens if My Reverse Mortgage Loan Balance Grows Larger Than the Value of My Home
9
Consumer Financial Protection Bureau. I Applied for a Loan Modification but Was Denied Help – Can I Appeal
10
Consumer Financial Protection Bureau. Find a Housing Counselor