For most people holding a reverse mortgage, or handling one left behind by a parent or spouse, the AARP Foundation’s class action and the separate case against HUD and PHH Mortgage raise one practical question: does this affect me? Nobody can say yet. But there’s a concrete way to find out, and it starts before a reverse mortgage even comes due.
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The Three Choices When A Reverse Mortgage Comes Due
A Home Equity Conversion Mortgage becomes due and payable once the last surviving borrower has died. At that point, whoever inherits the property, typically an adult child or other heir named in the estate, faces three options: convert the loan balance into a traditional mortgage and keep the home, pay off the balance outright and keep the home, or let the home go rather than pay what’s owed.
Heirs typically get 30 days to respond to the servicer’s due-and-payable notice, then six months to sell or pay off the loan. Up to two 90-day extensions are available if they’re actively working toward a sale, which can stretch the window toward roughly thirteen months in total. Missing that window without a plan in place is how a manageable decision turns into a rushed one.
How To Check Whether Your Loan Is Exposed
Anyone in that position, or anyone still living in a home under an active reverse mortgage, has a straightforward first move: request a full fee itemization and payoff statement directly from the servicer, not just a current balance figure.
A balance alone won’t show that. That document should break out every charge added to the loan, line by line, and it’s the only way to see attorney’s fees, inspection fees, preservation fees, or appraisal charges that may have been billed above what HUD permits.
From there, it’s worth checking whether the servicer on the loan is one of the companies named in the current litigation. The AARP Foundation’s suit names Compu-Link Corporation (Celink), Finance of America Reverse, and Carrington Mortgage Services, with Longbridge Financial added by a related motion.
The separate case, Kendall-Mayo v. Department of Housing and Urban Development, involves HUD, PHH Mortgage Corporation, Mortgage Assets Management, and MetLife Home Loans. It turns on a narrower issue: whether a surviving spouse who wasn’t named on the original loan is protected from foreclosure the way federal law intends.
A loan serviced by any of these companies doesn’t automatically mean a borrower or heir has been overcharged or is at risk, but it’s a reason to look at the paperwork more closely rather than less.
Why Being Part Of A Potential Class Isn’t The Same As Being Compensated
Both cases remain early and uncertified. Neither has reached a settlement. A court hasn’t yet ruled on whether either case can even proceed as a class action covering everyone in a similar position.
That distinction matters for anyone hoping the litigation will resolve their own situation automatically. It won’t, not yet, and it may take years even if it eventually does. Borrowers and heirs who wait on a case to conclude before taking any action of their own could spend that time watching interest and fees continue to compound on a loan balance in the meantime.
What To Do In The Meantime
The steps that make sense regardless of how either lawsuit turns out are the same ones that would have caught an overcharge in the first place: keep every fee statement and payoff notice a servicer sends, in writing, rather than relying on a phone call or a verbal summary. Request documentation for any fee that looks unfamiliar or unusually high before assuming it’s routine.
And before signing anything that finalizes a payoff, a mortgage conversion, or a decision to walk away from the property, a consultation with a real estate attorney is worth more than it costs, the same math behind an attorney flagging an excessive fee on a deal the client was otherwise happy with, rather than working from the servicer’s paperwork alone. That advice costs a fraction of what a single disputed fee can add to a loan balance, and it doesn’t depend on how or when the current litigation resolves.
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