Foreclosure Attorney: HUD To Assume Loans without Requiring Non-Borrowing Spouse to Pass the Principal Limit Test
The U.S. Department of Housing and Urban Development (HUD) recently changed its policy regarding non-borrowing spouses of reverse mortgage borrowers.
Mortgagee Letter 2015-15 authorizes reverse mortgage lenders tto assign a loan to HUD if a surviving spouse is living in the home without requiring the spouse to pass the “Principal Limit Test.”
As a Maryland foreclosure lawyer, I know that the Principal Limit Test was a huge hurdle for non-borrowing spouses to clear under previous HUD policy. The new policy allows spouses with a more workable option to prevent eviction and loss of housing from foreclosure.