When the last borrower on a reverse mortgage passes away, the loan comes due. The letter from the loan servicer usually arrives while the family is still planning the service, and it reads like a countdown. It is one, but it is longer and softer than it looks, and the family has more options than the letter makes clear.

This guide covers the federally insured reverse mortgage most Fresno seniors have, the Home Equity Conversion Mortgage (HECM), insured by FHA/HUD.

First: is anyone still allowed to live there?

Before anything else, check who is on the loan.

A co-borrower (usually a spouse who signed the loan) keeps living in the home. Nothing comes due.
An eligible non-borrowing spouse named in the loan documents may be able to stay as long as they meet HUD’s conditions.
Everyone else, including adult children and other relatives living in the house, does not have a right to stay under the loan. The loan becomes due and payable.

The clock, in plain terms

Due-and-payable notice. The servicer sends it after it learns of the death.
30 days to respond. Heirs tell the servicer what they plan to do: pay it off and keep the house, sell it, or hand it over to the lender.
Up to 6 months to finish. A servicer can give heirs up to six months to sell or refinance.
Two more 90-day extensions. These can be requested, and HUD has to approve them. You have to show you are actively working on it, such as a listing, a purchase contract or a loan application.

Used fully, that is roughly a year. If the heirs do nothing, the servicer is required to start foreclosure. In California that is usually a non-judicial trustee sale, and it moves quickly once it starts.

The single most useful thing a family can do in week one is call the servicer, confirm who the heirs are, and put the plan in writing. Silence is what triggers foreclosure. A plan buys time.

The 95% rule: you never owe more than the house is worth

A HECM is a non-recourse loan. The heirs are never personally on the hook for the balance.

If the house is worth more than the loan: sell it, pay the loan off, and the rest is the family’s equity.
If the loan is bigger than the house is worth, which is common after years of interest: heirs can settle the loan by selling for at least 95% of the current appraised value. FHA mortgage insurance covers the gap. The same 95% figure applies if an heir wants to keep the house and pay it off.
If nobody wants the house: the family can sign it back to the lender with a deed in lieu of foreclosure and walk away owing nothing.

Ask the servicer for the payoff statement and order the appraisal early. The 95% number is based on that appraisal, so everyone is working from the same value.

Who can sign? Probate vs. trust in Fresno County

The person who signs the sale has to have legal authority over the house.

If the house is in a living trust: the successor trustee can usually sell without going to court. This is the fastest path.
If it is not in a trust: the estate typically goes through probate in Fresno County Superior Court before an executor or administrator can sell. Probate takes months. Tell the servicer probate is open and send the case number. An open probate with a real plan is exactly the kind of progress the extensions exist for.

Keep paying the property taxes and homeowner’s insurance while this plays out. A lapse gives the servicer another reason to push the file toward foreclosure.

Your realistic options

Keep it (pay off or refinance). Best when an heir wants the house and can qualify for a new loan. Watch: the payoff is the full balance, or 95% of appraised value if the balance is higher.
List it with an agent. Best when there is equity, the house shows well and the family has time. Watch: repairs, showings and a 30–60+ day escrow all eat into the extension clock.
Sell as-is for cash. Best when the house needs work, the heirs live out of town, or the clock is short. Watch: get a written offer and compare it to the payoff and to 95% of appraised value.
Deed in lieu. Best when the loan is far above the value and nobody wants the house. Watch: no money to the family, but no debt and no foreclosure on anyone’s record.

What we do

HTV Properties buys houses in Fresno County for cash, as-is: furniture, repairs, tenants and all. For reverse-mortgage heirs, that means:

You call or text (559) 854-1663 with the address.
We look at the house within a day or two and work from the servicer’s payoff figure, so the offer is measured against the real number.
You get a written cash offer in 24 hours, with no fees, no commission and no repairs. A signed purchase contract is also the proof of progress a servicer wants to see for an extension.
Escrow pays the reverse mortgage off at closing, and any equity goes to the estate.

No obligation. If keeping the house or listing it is the better answer for your family, we will tell you.

Frequently asked questions

Do I have to pay the reverse mortgage out of my own pocket?

No. A HECM is non-recourse. The debt is paid from the house, never from the heirs personally.

How long do heirs have to sell a house with a reverse mortgage?

30 days to respond to the due-and-payable notice, up to six months to sell or refinance, and possibly two 90-day extensions with HUD approval. That is up to about a year if the family keeps the servicer informed.

What if the house is worth less than the loan?

Selling for at least 95% of the appraised value settles the loan. Mortgage insurance covers the rest.

Can we rent the house out while we decide?

Not under the reverse mortgage. It is due once the last borrower has died. To keep the house as a rental, an heir has to pay off or refinance the loan first.

Does the reverse mortgage stop us from selling during probate?

No, but the court-appointed representative is the one who signs. Keep the servicer updated with the probate case number and your timeline.

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