July 9, 2014
A reader asks, “My mother-in-law is sole owner of her home. she remarried and acquired a reverse mortgage. She is getting a divorce. unfortunately, she was force out of her house because of his violence. My question is how long can he live in the house if she is not there?”
This situation calls for a lawyer–the laws of the reader’s state would definitely apply here. However, there is a very important FHA loan rule on HECM loans that borrowers need to be aware of and that definitely applies in this circumstance.
FHA HECM loans require occupancy. A borrower who no longer occupies the home that secures an FHA HECM loan can and at some point definitely could have the entire loan declared due in full because failure to maintain occupancy is a violation of the terms of the FHA HECM loan.
A situation like this could result in the loan being declared due in full by the lender unless steps are taken as soon as possible to correct the occupancy situation.
Borrowers in these circumstances should hire legal help, contact the lender, and discuss the situation with both the lender and the FHA to insure everything that can be done to prevent a breach of contract where the HECM loan is concerned is accomplished. The terms of your HECM loan are very specific when it comes to occupancy.
Borrowers should not take for granted that a prolonged absences from the home is not a violation of the loan agreement–it’s best to check the terms of your contract and know for sure.
Do you have questions about FHA home loans? Ask us in the comments section. You can get information about applying or getting pre-approved for an FHA loan at FHA.com, a private company and not a government website.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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