When a parent with a reverse mortgage passes away, the first thing that usually happens is the servicer sends a notice. That letter is important, so don’t toss it in a drawer. It generally explains that the loan is due and payable because the last borrower has died, and it tells you what the servicer wants from the heirs. Read it carefully and respond within whatever timeframe the letter gives. If you’re not sure what it means, call the servicer and ask questions, and keep notes on who you talked to and when.

The due and payable process itself is fairly straightforward in general terms. The loan becomes due when the last borrower dies, moves out permanently, or sells the home. The servicer will usually give the heirs some time to decide what to do, and that window depends on the situation and the loan documents. You typically have options: pay off the loan, sell the home, or in some cases deed the property back to the lender. The amount owed is generally the loan balance or the home’s value, whichever is less, but that depends on the specific loan and current rules, so confirm with the servicer or a HUD-approved housing counselor.

If you want to keep the house, someone in the family can pay off the reverse mortgage, often by refinancing or using other funds. That’s a financial decision, so talk to a CPA or a lawyer before you commit. If nobody wants to keep it, selling is common. You can sell the home, use the proceeds to pay what’s owed, and keep any remaining equity, though costs and taxes can affect the math. A real estate agent and a lawyer can help you sort out the sale and the estate side of things.

Handing the house back is another path. In some situations the heirs can let the lender take the property instead of selling it themselves, which can be simpler when there’s little or no equity left. Whether that makes sense depends on the loan terms, the home’s condition, and the estate, so get advice before you sign anything. If the estate is in probate, the county and the court process matter too, and a California probate lawyer can tell you what the executor is allowed to do. In Sacramento County, the county clerk and the assessor can answer questions about records and property taxes, but they won’t give legal advice.

Whatever you choose, don’t ignore the servicer’s notices, and don’t let the house sit uninsured or unmaintained. Keep the utilities on if you can, and document everything. When in doubt, a HUD-approved housing counselor is free or low cost and knows reverse mortgages well.

This is covered in more detail at a reverse mortgage house after a death.