Mom Had a Reverse Mortgage. What Happens When You Sell Her House in Richmond, Texas?

Mom Had a Reverse Mortgage. What Happens When You Sell Her House in Richmond, Texas?

Last updated: November 11, 2026

The short answer

• In Texas, a federally insured reverse mortgage comes due when the last borrower on it dies.
• Heirs generally have 30 days to respond and about six months to sell, with extensions possible.
• Heirs may sell for at least 95 percent of appraised value if the loan is larger.
• The loan is nonrecourse, so heirs generally do not owe more than the home is worth.
• Linda Blackmon, REALTOR® with Keller Williams Signature in Katy, holds the SRES, CSA, and Certified Probate Specialist designations and has over 20 years of experience.

Picture a kitchen table in Richmond a few weeks after the funeral. A stack of mail sits between two siblings. One envelope is from a lender neither of them recognizes. Their mother took out a reverse mortgage years ago, and no one knew how much it had grown.

Now a letter says the loan is due. You do not need that on top of grief. You may wonder whether the bank can take the house next week. It does not work that quickly, but the clock is real. Here is the calm, plain version of what comes next. If you want someone beside you for it, start with senior real estate help in West Houston and Fort Bend County.

What happens to a reverse mortgage when the borrower dies?

When the last borrower on a federally insured reverse mortgage dies, the loan becomes due and payable. The lender does not simply take the house. The loan servicer sends a notice, and the estate or heirs then choose to sell the house, pay the loan off, or sign the house over to the lender.

A reverse mortgage is a loan that lets a homeowner age 62 or older borrow against the house with no monthly payments, while the balance grows. Due and payable means the whole balance, with interest and fees, is owed now. The common kind is the Home Equity Conversion Mortgage, or HECM, which the Federal Housing Administration insures. The National Reverse Mortgage Lenders Association says HECMs make up nearly all reverse mortgages made today. Privately issued loans can follow different rules, so read those loan papers.

Why this is so confusing

Your parent made no monthly payments, so interest and fees kept adding to the balance for years. Families often learn how large it grew only after the funeral.

Three misunderstandings cause most of the trouble. People think the bank already owns the house; it does not, and title stays with the estate until a sale or transfer. People think heirs inherit the debt personally; on a federally insured loan they generally do not, because the loan is nonrecourse, meaning the lender can look only to the house. And people think they can wait for the letter, yet HUD's guide for heirs says to contact the lender immediately.

This is common in Texas. HousingWire, reporting on the Federal Housing Administration's fiscal year 2023 report to Congress, ranks Texas third among states for new HECMs, behind California and Florida.

The process, step by step

1. Call the servicer. The servicer is the company that handles the loan, and its number is on the statements. Ask for the payoff figure and a named contact. Who: the executor or the family member managing the estate. Timing: the first days, since HUD tells heirs to contact the lender immediately.
2. Send proof of death and of who speaks for the estate. Federal rules at 24 CFR 206.125 give the servicer 60 days to report the loan as due to HUD. Who: the executor, with the attorney. Timing: the first few weeks.
3. Confirm who can legally sell. In Texas that usually means Letters Testamentary or another court approved path. Our guide to how long Texas probate takes before you can sell a house explains the timeline. Who: the probate attorney. Timing: set by the court calendar, so ask for an estimate in Fort Bend County.
4. Get the appraisal in writing. The servicer must order an appraisal from an FHA approved appraiser, and that value sets the 95 percent figure. Who: the servicer; you ask for a copy. Timing: ask for the date.
5. Answer the due and payable notice in writing. Tell the servicer your plan, even if it is only that you are preparing to sell. Who: the executor or heirs. Timing: heirs generally have 30 days from the notice.
6. List the house and request an extension early. A servicer may approve 90 day extensions when you can document active efforts to sell. They are not automatic. Who: your agent and the servicer. Timing: well before the six months run out.
7. Close and pay the servicer from the sale. The title company wires the payoff, and what is left belongs to the estate. Until title transfers, the estate keeps paying property taxes and insurance, according to HUD. Who: the title company and the executor. Timing: set by the contract.

Your four options, side by side

Costs, timelines, and numbers

• 95 percent. If the loan is larger than the house is worth, HUD's guide for heirs says the estate may sell for at least 95 percent of the current appraised value, and the lender accepts the net proceeds (HUD, 2019).
• An example, not a real client. A $420,000 balance on a house appraised at $350,000 can be settled by a sale of at least $332,500, which is 95 percent of $350,000.
• Six months. The servicer must start foreclosure within six months of the due date unless HUD approves more time (24 CFR 206.125, eCFR, 2026).
• 90 day extensions. These are possible with proof you are actively selling or arranging payoff. Several sources describe up to two, about 12 months in all. Ask your servicer which applies.

Selling costs, including the agent's commission, come out of the proceeds. Commissions and fees are not set by law and are fully negotiable.

Linda Blackmon, a REALTOR® with Keller Williams Signature in Katy, Texas, who holds the SRES, Certified Senior Advisor, and Certified Probate Specialist designations and has over 20 years of experience with life transition sellers, asks families to get two numbers in writing before listing: the payoff and the appraisal. Every pricing decision depends on them.

In Richmond, Texas

Richmond is the county seat of Fort Bend County, and a probate case is generally filed in the county where the person lived. Property records and exemptions run through the Fort Bend Central Appraisal District, at 2801 B.F. Terry Blvd. in Rosenberg.

The district's exemption forms ask for a death certificate when a homestead passes by heirship, and for an affidavit establishing ownership on heirship property. Its 2026 information form also says a surviving spouse who qualifies for the surviving spouse version of the over 65 exemption keeps the deceased spouse's tax ceiling amount while living in the home. Our guide to the over 65 tax freeze when you sell explains the transfer rules.

What goes wrong

• Waiting for the letter. Interest keeps adding to the balance while the weeks pass. Call the servicer in the first days.
• Ignoring the notice. Under Texas Constitution Article XVI, Section 50(k), as amended in 2013, a lender does not need a court order to foreclose once all borrowers have died. Answer in writing and keep copies.
• Taking the first cash offer before you know the payoff. It can cost the estate real equity. Get the payoff and appraisal first, then read what a cash offer really nets you.
• Letting a family disagreement run the clock. Extensions require proof of active effort, and a stalled sale has none. Our guide on when siblings disagree about selling a parent's house shows how families settle it.

Linda's investor open house model protects equity when a cash buyer offers less than the house is worth. It works in four steps, and no outcome is guaranteed:

1. Set the floor. Know the payoff and the appraisal first.
2. Open the door. Invite investors and regular buyers to the same open house window.
3. Let offers compete. Several bids in one window usually beat one private offer.
4. Compare net proceeds. Choose by what the estate keeps after the payoff, not by the headline price.

Frequently asked questions

Does a reverse mortgage have to be paid back when the borrower dies?

Yes. A federally insured reverse mortgage becomes due and payable when the last surviving borrower dies. The estate or heirs then sell the house, pay the balance, or sign the house over to the lender. The loan does not disappear, but heirs are generally not personally liable for more than the home is worth.

How long do heirs have to sell a house with a reverse mortgage?

Heirs generally have 30 days to respond to the servicer's due and payable notice and about six months to sell or pay off the loan. The servicer may approve extensions in 90 day steps when you document active efforts to sell. Extensions are not automatic, so ask early.

Can heirs owe more than the house is worth?

On a federally insured reverse mortgage, generally no. HUD's guide for heirs says that when the balance is more than the home is worth, the estate may sell for at least 95 percent of the current appraised value, and the lender accepts the net proceeds. Privately issued reverse mortgages can differ, so read the loan papers.

Can a surviving spouse stay in the house?

Sometimes. An eligible nonborrowing spouse may be able to remain in the home during their lifetime, but the spouse must give the lender a Nonborrowing Spouse Certification within 30 days of the last borrower's death, among other requirements. A spouse who is not eligible faces the same due and payable clock as other heirs.

Who pays property taxes and insurance while the house is for sale?

The borrower's estate does. HUD's guide for heirs states that property taxes and insurance remain the estate's responsibility until title is transferred. Keep both current and keep the house maintained. Tell your insurance agent the owner has died, because a vacant house may need different coverage.

Can I list the house before probate is finished?

Often yes, but you cannot close until someone has legal authority to sign. In Texas that is usually an executor holding Letters Testamentary or another court approved path. Talk to a probate attorney first, and once the house is on the market, ask the servicer for an extension in writing.

The house is not the legacy. The story is.

Linda Blackmon, a REALTOR® with Keller Williams Signature in Katy, Texas, who holds the SRES, Certified Senior Advisor, and Certified Probate Specialist designations and has over 20 years of experience with life transition sellers, is a founding member of the Senior Home Coach network. She serves Katy, Fulshear, Richmond, Cypress, and West Houston. Call or write when you are ready.

Linda Blackmon, REALTOR®

Keller Williams Signature

281.924.2222

Linda@LindaBlackmon.com

lindablackmon.com

TREC License 0469414

Linda Blackmon, REALTOR®, TREC License 0469414. Keller Williams Signature. 281.924.2222. Linda@LindaBlackmon.com. This article is for general information only and is not legal, tax, or financial advice. Consult a licensed attorney or tax professional about your specific situation. Commissions and fees are not set by law and are fully negotiable. See the TREC Information About Brokerage Services and the TREC Consumer Protection Notice.

Equal Housing Opportunity.