To many older Americans, a reverse mortgage seems like an attractive financial product to help them afford increased living and heath costs while staying in their family home. These loans, sometimes called a home equity conversion mortgage or HECM, provide that seniors 62 years old and older who borrow against the equity in their home do not need to repay the loan during their life. However, seniors who take out these loans can still lose their homes to foreclosure during their lifetime, and widowed spouses of reverse mortgage borrowers find themselves at an even higher risk of foreclosure. While U.S. Housing and Urban Development (HUD) has recently announced encouraging changes to protect widowed seniors, the risk remains for this vulnerable population.

Because reverse mortgage loans are only available to those 62 years of age and older, and because seniors get better rates on these loans the older they are, couples are often counseled by reverse mortgage companies to remove the younger spouse’s name from the deed so that the older spouse is the only “borrower” on the mortgage. Unfortunately, although reverse mortgage borrowers are required to undergo HUD-certified counseling prior to taking out these loans, seniors often do not understand the legal implications of having only the older spouse on the deed and the mortgage. Many older seniors report that reverse mortgage lenders assure them that removing one spouse from the deed is just a legal technicality and will have no impact on either spouse’s ability to remain in their family home for life.