If you’re dealing with a reverse mortgage on a parent’s house here in Sacramento County, the first thing that usually happens after a death is a notice from the servicer. That letter is basically the company asking to be told what’s going on and who’s handling the estate. Don’t ignore it. Read it, respond, and keep copies of everything you send. The servicer will want to see a death certificate and some proof of who has authority to act, like a will or letters from the court. What exactly they ask for depends on the situation, and if the estate is complicated or the paperwork is unclear, a lawyer is worth talking to.

The due and payable process sounds scarier than it often is. In general terms, a reverse mortgage becomes due when the last borrower dies or moves out permanently. That doesn’t mean the house gets taken the next day. There’s usually a process where the servicer sends notice and the heirs get a period of time to decide what to do. The exact timing and options depend on the loan terms and the situation, so don’t guess. A HUD-approved housing counselor can walk you through it for free, and they deal with this stuff all the time.

You basically have three paths. You can buy the house, meaning you or another heir pays off the loan, often at a discounted amount if you sell or pay it off properly, and keep the property. You can sell it, which is common, and the loan gets paid from the proceeds, with anything left over going to the estate. Or you can hand it back to the servicer, sometimes called a deed in lieu, and walk away without owing more than the house is worth, though the details matter. Which one makes sense depends on the loan balance, the home’s condition, what the estate wants, and whether anyone can afford to keep it.

Before you decide anything, get the loan payoff figure in writing and have a CPA look at the tax side, because forgiveness of debt and estate taxes can get tricky. If the estate is small or there’s no will, the county can help you understand probate basics. Take your time, ask questions in writing, and don’t sign anything you don’t understand.

There is a fuller write-up at a reverse mortgage house after a death.