Reverse Mortgage Servicing
No matter how nice or helpful the salesperson was who sold you the reverse mortgage their job
is done when the sale is complete. After you originate your reverse mortgage it will be
transferred or sold to a "Loan Servicer" who you will never meet in person, and who recognizes
you as a loan number and property address.
Servicing is where 99% of the problems begin and often result in foreclosure. There are 17
legal triggers that can cause the loan to be defaulted and called "due and payable" The most
common are death of the borrower, non-payment of taxes and/or insurance, non-occupancy,
failure to maintain the property to the Lender's standard.
For Federally Insured Reverse mortgages - there are very few regulations that give you any rights
or protections. The bigger problem is that HUD has no structure or system in place to audit,
regulate or enforce any of the consumer regulation rights and protections. HUD does not
address individual consumer complaints. Basically, the consumer is left on their own.
For Proprietary or Jumbo Reverse Mortgages -the Borrower has absolutely no regulatory rights
and protections and no agency to turn to for help. Federal Regulations and consumer
protections do not apply. If you are experiencing any of the common issues listed below for
Federally Insured Reverse Mortgages reach out for help!
For Federally Insured reverse mortgages the following list includes the common and consistent
Servicer violations of Federal Regulations, State Laws and Consumer Protections in
Servicing/Maturity/Foreclosure practices. Most often items 1 through 6 exist in every loan plus at
least one other item items 7 through 13. These practices result in obstruction of the
consumers right to remain in the property with their loan in good standing and ultimately end in
- Mislead/deceive Consumers in written and verbal communications and fail to inform the
consumer of their HUD rights and options;
- No Single Point of Contact, No Customer Support; refuse to provide guidance to satisfy
- Refuse to grant “HUD authorized time and/or extensions for repayment” to borrowers or
heirs; Customer Support Reps obstruct consumer from exercising their rights and deny
requests for payoff statements, appraisals, or all other rights;
- Claim they did not receive consumer documents, did not receive documents in time, or
not in the proper format;
- Legal Authority:
- Refuse to speak to consumers without proof that title has been conveyed as soon
as 30 to 60 days from the death of the borrower.
- Make a legal determination on the validity/and or legal authority of consumer
documents such as trusts, wills, or affidavit of heirship.
- Demand Trusts are recorded violating privacy rights, state laws and federal
- Refuse to speak to heirs without proof of legal authority to represent borrower’s
estate. May require the consumer to retain legal counsel, or a court order at an
unnecessary cost to the consumer;
- Refuse to wait for probate to be complete before initiating foreclosure.
- Accelerate foreclosure and auction 30 to 60 days after the death of the borrower;
- Charge consumer appraisal fees for exterior only (drive by) appraisals not in
compliance with 24 CFR 206.125 & HUD Handbook
- Refuses to perform the HUD required appraisal or provide a copy of the appraisal
to determine the 95% option.
- Inflates appraisal to prohibit consumer from the 95% option
- Claims the consumer must pay for a exterior only or HUD Appraisal.
- Force Placed insurance cost 10 to 20 time as much as the policy consumer can
- Force Place insurance when the consumer already has insurance agreed to in
the original contract
- When consumers can’t pay the force placed premium Servicer forecloses.
- Servicer receives kickbacks from the force placed premium.
- Use of State laws to violate HUD regulations to accelerate foreclosure. Example:
Servicer is required by Federal Law to communicate with all known heirs. Servicer uses
the CA Notice of Default declaration to claim they do not have to speak to anyone (heirs)
because they are not qualified borrowers.
- Refuse to allow repayment of the loan balance;
- Refuse to allow repayment of loan at the 95% (appraised value) option – short sale;
- Refuse to allow the heir a Deed in Lieu without probate (will or intestate). No benefit to
the consumer and will cost thousands of dollars to turn the property over to the Lender.
- Dual Tracking: Auction property when consumer has loan approval or sales contract
- Backdate legal documents and force placed insurance policies
- Refuse to allow HUD authorized repayment plans for Tax & Insurance defaults
- Refuse to recommend or initiate Federal Hardest Hit Fund State Programs that provide
up to $50,000 relief for Tax & Insurance defaults. ** See Regulations and Laws page
- Claim the Borrower doesn't occupy the property knowing they do.
The main Loan Servicers are: Champion, Reverse Mortgage Solutions (RMS), Reverse
Mortgage Funding (RMF), Wells Fargo, CeLink, Financial Freedom, JB Nutter,
Call or email for a free assessment of your reverse mortgage.
We will educate you on your rights and options in the servicing,
maturity, and/or foreclosure process.