HECM Reverse Mortgage Help — Virginia Seniors
Reverse Mortgage in Default? Virginia Seniors Have More Options Than They Think
A HECM reverse mortgage can go into default even without missing a payment — just by falling behind on property taxes or insurance. But HUD offers cure programs, and you have real options before the lender calls the loan due.
What Is a HECM Reverse Mortgage?
A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage program administered by HUD and available to homeowners age 62 and older. Unlike a traditional mortgage, you make no monthly payments — instead, the loan balance grows over time and is repaid when you sell, move out, or pass away.
The loan becomes due and payable when: the borrower sells the home, permanently moves out (including to assisted living for more than 12 consecutive months), passes away, or defaults on the occupancy, tax, or insurance requirements.
Why Virginia seniors fall into default:
- Missed property tax payments — even one year can trigger default
- Lapsed homeowners insurance policy
- Extended absence from the home (hospital, family caregiver, facility)
- Death of borrower — heirs unaware of HECM obligations
- Failure to respond to annual occupancy certification
HUD-Approved Counseling — Required Before Any Cure Program
HUD requires homeowners to speak with a HUD-approved housing counselor before entering a HECM cure program or proceeding with a short sale or deed in lieu. This is free and typically takes 60–90 minutes by phone.
HOPE Hotline (HUD-sponsored)
1-888-995-4673
24/7 — free, multilingual
Virginia Housing Counseling
1-800-227-8432
State-sponsored, Virginia-specific
National Foundation for Credit Counseling (NFCC)
1-800-388-2227
Find local HUD-approved agency
HUD Locator (online)
hud.gov/findacounselor
Search by ZIP for local VA agencies
Your Options When a HECM Is in Default
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Repayment Plan
Pay back past-due taxes and insurance in installments (up to 60 months) using remaining loan proceeds. Must be approved by the servicer and HUD.
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Tax & Insurance Set-Aside
If loan funds remain, the servicer creates a set-aside account to automatically pay future property taxes and insurance. Prevents future default.
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Keep the Home — Cure the Default
Pay all past-due taxes and insurance in a lump sum to reinstate the loan. Can be funded by family members, down payment assistance, or local tax relief programs.
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Sell the Home
If you have equity or want to move on, sell the home. Proceeds pay off the HECM. HECM non-recourse protection means you never owe more than the home is worth.
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Deed in Lieu
Transfer the property deed to the lender and walk away. Best when the loan exceeds home value and you do not want to sell. Lender releases you from any remaining obligation.
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Short Sale
Sell the home for less than the loan balance. HUD absorbs the shortfall via FHA insurance. You owe nothing and receive a HECM short sale approval letter.
HECM Reverse Mortgage — Frequently Asked Questions
Why is my reverse mortgage in default if I never missed a payment?
HECM reverse mortgages require no monthly mortgage payment, but borrowers must continue paying property taxes, homeowners insurance, and HOA fees (if applicable), and must keep the home as their primary residence. Falling behind on any of these obligations — even for one year — can trigger a default and acceleration of the full loan balance.
What happens if I default on a HECM reverse mortgage?
If you default on a HECM, the lender (servicer) sends a "Due and Payable" notice, meaning the entire loan balance is due immediately. If not resolved, the servicer can initiate foreclosure proceedings. In Virginia, this can move quickly since the state uses non-judicial foreclosure. You typically have 30 days to respond with a cure plan before foreclosure is referred.
How do I cure a HECM default in Virginia?
HUD offers a HECM Tax and Insurance Default Cure program. Options include: (1) Repayment plan — repay past-due taxes and insurance over up to 5 years from the loan proceeds; (2) Tax and Insurance Set-Aside — if loan funds remain, servicer sets aside future funds to pay these costs automatically; (3) Sell the home — if you have equity, sell and pay off the loan; (4) Deed in lieu — transfer the deed to the lender and walk away if the home is underwater. You must contact a HUD-approved housing counselor first.
Can I sell a home with a HECM reverse mortgage?
Yes. You can sell a HECM home at any time. If the sale price exceeds the loan balance, you keep the difference. If the sale price is less than the loan balance, HUD's mortgage insurance covers the lender's loss — you owe nothing additional. This is the HECM non-recourse protection.
What if a family member inherits a home with a reverse mortgage?
Heirs have several options when inheriting a HECM property: (1) Pay off the loan balance (or 95% of appraised value, whichever is less) and keep the home; (2) Sell the home and use proceeds to pay the loan — keep any remaining equity; (3) Do a deed in lieu if the home is underwater and the heirs do not want it. Heirs typically have 6–12 months to make a decision, with extensions available while actively working with the servicer.
Ready to Take the Next Step?
Whether you want to cure the HECM default and stay in your home or sell and preserve your equity, we will help you understand every option available under HUD guidelines.
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I want to keep my home
Book a free 15-minute call. We will review your HECM servicer, which cure program applies, and how to work with your HUD counselor to reinstate the loan.
Book Free Consult →💰
I need to sell and move on
Get a no-obligation cash offer. We buy HECM homes as-is, handle the HUD paperwork, and can close quickly — protecting any equity you have built.
Get My Cash Offer →