What is the foreclosure process for a reverse mortgage?

The foreclosure process for a reverse mortgage in Virginia is a bit different than the process for a regular mortgage. In Virginia, a reverse mortgage is also referred to as a home-equity conversion mortgage (HECM). Unlike with a regular mortgage, the lender can not foreclose on a reverse mortgage until the borrower dies or there is a failure to pay property taxes, insurance, and other fees associated with the loan. When the borrower passes away, the loan must be paid off or the house must be sold. If the loan is not paid off within 12 months, the lender can start the foreclosure process. The lender is required to send a notice to the borrower detailing their right to cure the default. The borrower then has 30 days to respond to the notice and cure the default. If the loan is not cured within the 30-day period, the foreclosure process can begin. The lender must then file a complaint in circuit court and the borrower has 30 days to respond. If they do not respond to the complaint, the court can issue a foreclosure order and the property can then be sold to satisfy the debt. The proceeds from the sale will first go to the lender to cover the remaining loan balance. Any remaining proceeds are then distributed to the borrowers heirs or the estate of the deceased borrower. Should the proceeds from the sale be insufficient to cover the loan balance, the lender can bring a civil action against the estate or heirs of the borrower for the remaining balance.

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What is the foreclosure process for a reverse mortgage?

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