Quick Answer
The due-and-payable process is the structured sequence through which HUD requires reverse mortgage resolution after a maturity event — including death, sale, or permanent departure — with specific notice requirements, timeline allowances for borrowers and heirs, and ultimately an orderly sale or foreclosure if the loan is not otherwise resolved.
- Maturity events: death of last borrower, home sale, permanent move-out.
- Servicer sends due-and-payable notice after maturity event is confirmed.
- Initial resolution period: 6 months.
- Extension available: two 3-month periods (to 12 months maximum) with documentation.
- During extension: home must be actively listed or financing being arranged.
- Final resolution: sale, payoff, or servicer-initiated foreclosure after timeline expires.
Key Facts
| Topic | Key Fact |
|---|---|
| Maturity events | Death, sale, permanent move-out of last borrower |
| Initial timeline | 6 months from maturity event notification |
| Extension periods | Two 3-month extensions available — maximum 12 months total |
| Extension requirement | Active listing agreement, purchase contract, or mortgage application |
| During extensions | Interest continues accruing — balance grows during resolution period |
| After timeline expires | Servicer may initiate foreclosure proceedings |
| Heir notification | Written notice from servicer — contact servicer immediately |
| FHA oversight | HUD supervises servicer conduct throughout due-and-payable process |
Detailed Explanation
The due-and-payable process is designed to provide borrowers and heirs with meaningful time to arrange orderly resolution while protecting the FHA insurance fund from extended open-ended exposure. The process is structured but not instantaneous — it provides significantly more time and procedural protection than many heirs expect when they first discover a parent had a reverse mortgage.
The process begins when the servicer receives notification of a maturity event. For death, this notification comes from heirs (or is discovered through the servicer's routine monitoring). For permanent move-out, it typically comes from the servicer's occupancy monitoring processes (failed annual certifications, property inspection findings). The servicer sends the formal due-and-payable notice after confirming the maturity event, which starts the 6-month clock.
Extensions are available and should be actively pursued when more time is needed. The servicer will grant two 3-month extensions — for a total of 12 months — when the heir provides documentation of active resolution efforts: a listing agreement with a real estate agent (for sales), a signed purchase contract (for a property under contract), or a mortgage application and appraisal (for refinancing). These documentation requirements are not onerous — a standard listing agreement from a California real estate agent satisfies the first extension requirement.
After the 12-month maximum, the servicer is authorized to proceed with foreclosure. However, HUD's oversight of HECM servicers has historically included monitoring to ensure that servicers follow the proper process and do not initiate foreclosure prematurely. The HUD rules require specific notice periods within the foreclosure process itself, providing additional procedural protection beyond the initial timeline.
Jay Zayer, CRMP — 18 Years Experience
The due-and-payable process call I receive most often involves an heir who received the servicer's initial letter and panicked — thinking they had to resolve everything within days. The reality is very different. I walk them through the timeline, help them identify whether they want to keep or sell, and direct them to the right professionals (real estate attorney for estate title issues, California real estate agent for the listing, mortgage broker for refinance). The 6 to 12 months is a meaningful window when it is used proactively.
Who This Is Right For
This may be a good fit if:
- Every heir who has received a due-and-payable notice and wants to understand the process and timeline
- Every reverse mortgage borrower who wants to understand what their heirs will face
This may NOT be the right fit if:
- There is no situation where understanding the due-and-payable process would be inappropriate — it is the most consequential administrative process in the reverse mortgage's life
Common Misconception
Myth: Heirs have only a few weeks to resolve a reverse mortgage after the borrower dies.
Fact: HUD provides 6 months for initial resolution, extendable to 12 months with documentation. The process is structured and provides meaningful time for proper resolution.
Source: HUD: HECM due-and-payable guidelines — hud.gov
Authoritative Sources
- HUD: HECM due-and-payable — hud.gov
- HUD Mortgagee Letter 2015-15 — hud.gov
- CFPB: Reverse mortgage heirs — consumerfinance.gov
People Also Ask
How does the 6-month reverse mortgage timeline work after a death?
The 6-month period begins when the servicer is notified of the death. During this period, heirs must arrange resolution: paying off the loan, selling the home, or requesting extensions with documentation.
How do I request an extension on the reverse mortgage timeline?
Contact the servicer before the 6-month period expires. Provide documentation of active resolution efforts — a listing agreement, purchase contract, or mortgage application. The servicer grants two 3-month extensions.
What happens if heirs do not respond to the servicer's notices?
The servicer will escalate through increasingly formal notices and ultimately initiate foreclosure proceedings after the timeline expires. Proactive communication with the servicer prevents this outcome.