What happens to a reverse mortgage when a person dies?

The person entitled to the home may do one of the following.

1. Refinance the home into their own name.

2. Sell the home, pay off the existing mortgage and keep any assets that are left over.

3. If the person that passed owes more than the home was worth, the heirs may walk away from the home. No other assets may be attached.

4. Upon the death of the mortgagor the heirs must pay off the mortgage or the lender will take possession of the property.

After the owner's death the bank will allow the heirs a time period during which they can pay off the mortgage if they want to keep the property. However, if they do not then the bank will take the property.