When older homeowners fall behind on property charges like taxes or insurance, they may receive a notice that their reverse mortgage is in default. This can be confusing and frightening, especially for people who thought the loan meant they never had to make payments again.
That’s where reverse mortgage default counseling comes in. It’s a specialized service that helps borrowers understand what went wrong, what options they have, and how to avoid foreclosure.
Through housing counseling, homeowners can work with trained experts to explore solutions and possibly bring the loan back into good standing. This kind of support can make all the difference when time is short and stress is high.
A reverse mortgage counseling session typically begins with a review of your situation. The counselor will ask about your income, your primary residence, and any letters or notices you’ve received. They’ll go over what a reverse mortgage is, how the loan works, and why it’s now at risk.
During the session, you can expect to:
The goal isn’t just to get you through the crisis; it’s to help you fully understand what happened and what to do next.
Many people assume that if they have a home equity conversion mortgage, or HECM, they’re safe from any payment obligations. But even though borrowers don’t make monthly loan payments, they are still required to:
If any of these are missed, the loan can be flagged as being in default. Unfortunately, some borrowers don’t realize this until they receive a letter, email, or legal notice from their loan servicer.
In many cases, homeowners can fix the situation, especially if they act quickly. But ignoring the request for payment or failing to respond can lead to foreclosure.
HUD-approved housing counseling agencies like Credit.org are trained to provide hecm default counseling that meets federal requirements. These agencies work under oversight from the Department of Housing and Urban Development, and they’re required to follow strict rules and quality standards.
A good counselor will:
Counselors cannot force the lender to reverse the default, but they can help borrowers find the best path forward. Sometimes that means submitting documents. Sometimes it means selling the home or arranging for a family member to step in.
Whatever the path, the counselor’s job is to make sure the borrower understands the full picture before taking action. Learn more about how HUD housing counseling can help you get assistance.
HECM default counseling is not the same as traditional credit counseling. It requires additional training and certification, because the rules around reverse mortgage loans are complex and regulated by HUD.
As part of the HUD participating program, counseling agencies must follow the HUD Exchange HECM Counseling Handbook and track outcomes by fiscal year. This helps ensure that seniors across the country receive consistent support.
According to HUD’s official page on HECM default, common triggers for counseling include:
Counseling agencies must explain the services offered, how much time borrowers have to act, and what the consequences may be if no action is taken.
Let’s walk through a few small examples of default counseling in action.
John, age 78, received a letter saying he owed over $1,800 in property taxes. He thought his reverse mortgage covered everything and didn’t know he had to pay those bills separately. Afraid of losing his home, he contacted a housing counseling agency near him.
During his counseling session, the counselor reviewed John’s financials and helped him apply for a local assistance program to cover the taxes. They also helped him write a letter to the loan servicer explaining the delay and requesting time to catch up. John avoided foreclosure and learned what to watch for going forward.
After Maria passed away, her daughter Angela found out that Maria had a reverse mortgage. Angela didn’t know what to do. She missed the window to notify the lender and got a notice of default in the mail. She didn’t want to lose her mother’s home.
Angela found a HUD-approved agency that could provide hecm default counseling. The counselor walked her through the steps, explained the cost and timeline of repaying the loan, and helped her file a formal request to sell the home rather than go through foreclosure. Because she acted quickly, Angela was able to resolve the issue before it got worse.
These stories are typical of what older homeowners and their families face. The default process can feel overwhelming, but counseling services help simplify things and give people a path forward.
Because most reverse mortgages are part of the HECM program, they fall under the umbrella of the U.S. Department of Housing and Urban Development. HUD’s role is not just about writing policy. It also involves:
Every counselor working with HECM borrowers must be trained in the latest HUD rules. These include not only the legal aspects, but also the real-world impact of aging, fixed income, and limited equity.
Agencies like Credit.org are committed to following HUD standards and helping clients protect their homes. They participate in ongoing reviews and must report how many clients they serve, how many services they provide, and how many homeowners avoid foreclosure thanks to counseling.
HUD also gathers data on client satisfaction and loan outcomes to improve its tools and publications. These resources help borrowers search for certified counselors, understand how interest accrues over time, and explore other government programs that may be available. Tools like Investopedia’s overview of reverse mortgages as a retirement tool can provide additional insight into the long-term impact of these loans.
Not all counseling services are the same. Some focus only on giving information. Others walk with the borrower every step of the way. When choosing a provider, make sure they can:
These services are not one-size-fits-all. Counselors will help you identify the right type of support for your needs, whether that involves urgent tax help, long-term planning, or assistance for surviving spouses. Many agencies maintain a list of local resources to help with home repairs, legal aid, or property tax relief.
For seniors exploring reverse mortgage options in the first place, this kind of access to trustworthy education is essential. Articles like Credit.org’s “Debunking Reverse Mortgage Myths” can help clear up confusion and guide borrowers toward informed decisions.
According to CBS News, a growing number of seniors are entering reverse mortgages without fully grasping the risks. That makes default counseling even more important, especially for homeowners on a tight budget or living alone.
You can also check the CFPB’s official rights and responsibilities PDF to see what your lender must do, and what you’re expected to keep up with.
If you’re behind on taxes or insurance, or if you’ve received a letter about a reverse mortgage default, don’t wait. The sooner you take action, the more options you’ll have.
Reverse mortgage default counseling is not about assigning blame. It’s about understanding your situation and making a plan. Whether you’re a borrower or a family member, a counseling session can provide peace of mind, resources, and next steps.
Agencies like Credit.org have years of experience and are here to help. They’ll answer your questions, explain your rights, and work with you to keep your home.
If you or someone you love is facing default on a reverse mortgage, help is available. Credit.org is a HUD-participating agency with certified counselors trained in HECM rules and procedures.
Visit Credit.org’s Reverse Mortgage Default Counseling page to schedule a counseling session today. Our team will listen, guide you through your options, and help you take action before it’s too late.
