What is required when a borrower of a reverse mortgage has died?

When a borrower of a reverse mortgage passes away, providing a notice of demise is a necessary step. This notice serves to inform the lender of the borrower's death and is crucial for the processing of the loan. The lender needs this information to manage the loan appropriately, as it affects the status of the reverse mortgage and subsequent steps that need to be taken regarding the property.

Once the notice of demise is submitted, the lender typically evaluates the situation and the heirs or estate representatives can then decide whether to pay off the reverse mortgage balance, refinance it, or sell the property to satisfy the loan. This process ensures compliance with the terms of the reverse mortgage agreement and addresses the legal and financial implications of the borrower's death.

In contrast, other options do not accurately reflect the necessary actions in this scenario. While notifying the insurance company could be part of estate management, it is not a direct requirement related to the reverse mortgage itself. Immediate payment of the loan is not required upon the borrower's death; rather, there are specific protocols that follow the notification of demise. Lastly, while some minor actions might seem allowed, it is essential to notify the lender to avoid issues with the ongoing management of the loan. Therefore, providing a notice of demise is the correct requirement