Following Borrower's Death:
During the tenure of a reverse mortgage, control over one’s residence remains with them. The fate post-mortem depends on various factors mainly stipulated by loan terms and conditions. Contrary to popular belief, lenders do not automatically inherit it.
Inheritor(s) can opt to settle outstanding debt thereby retaining possession. Typically this requires clearing principal amount alongside interest fees accrued overtime using personal savings or through refinancing options.
If inheritor(s) find themselves either unable or reluctant towards settling debts they have an option to auction off properties concerned; proceeds from which would be used toward repaying existing loans while surplus if any goes directly back within heir possessions.
Deed Surrendering Instead Of Foreclosure:
On occasions there are instances where heirs electively transfer deeds back unto lender hands as way out from repayment obligations thus side stepping any long drawn foreclosure procedures albeit after careful deliberations over its varied implications.
Option To Desert Property:
Given scenarios where remaining balances surpass realty worths it isn't uncommon that benevolent parties may choose relinquishment rather than pursuing further claims onto said assets wherein typically lending entities assume proprietorships relieving rightful successor(s) off any pending liabilities associated with shortages incurred thereof.