RMS

Servicing: Understanding Default in the Reverse Mortgage World 

Those of us in the reverse mortgage servicing business often speak a different language than our colleagues on the forward side. One example is the use of the word “default.” In the forward mortgage world, “default” generally reflects failure, as in a borrower who stops making payments or a loan that stops performing according to expectations. But in the reverse sector, that word most often means a predictable conclusion: that the senior has left the residence under several different but predictable conditions. As a result, the timing can be challenging for actually declaring a loan “due and payable” (a.k.a. in