On a California reverse mortgage, the lender will send out an annual affidavit of occupancy that needs to be filled out, signed, notarized and sent back to the lender in a timely fashion to answer the question, how does the lender know you still live in the property.
By you returning the completed document as instructed, the lender is ensured you still live there. If you don’t return the document, or if you accidentally threw out the document, the lender starts to think otherwise and try to contact you or your next of kin. When you filled out your final closing lender documents, there was a document requesting alternate contact information which is used in the event the lender hasn’t heard from you.
If you are to take a long vacation, say over 60 days, it’s not a bad idea to call your reverse mortgage lender and let them know in the event the affidavit sits around for an extended period of time without getting returned. Reverse mortgage lenders don’t make a habit of knocking on your door in these situations.
Nevertheless, fraud can happen if a child, other relative or neighbor stays or moves into your property upon your passing without letting the reverse mortgage lender know you have passed away and they stay rent free which is against reverse mortgage rules.
The rules state that once the last living borrower passes away, the loan must be paid off typically within 30-90 days depending on the reverse mortgage lender’s demands.
Here’s a short one-minute video I created on this subject that expands some on this issue California Reverse Mortgage – How Does the Lender Know You Are Still Living There? #reversemortgage (youtube.com)
You can watch another video on my channel that has other little known facts on reverse mortgages, https://youtu.be/V2g59GK9yU4
Another helpful video https://youtu.be/F3MRIzR5xhk explains what is the minimum age to get a reverse mortgage and other requirements.
Thanks for watching and if you have a question or scenario please call, email or fill out the form below and I will help in any way I can.
Kind regards,
Kevin Walton with C2 Reverse