What Happens when a REVERSE Mortgage is MAXED OUT to the owners occupancy?

[Michael Morrongiello]

What Happens when a REVERSE Mortgage is MAXED OUT to the owners occupancy?
Situation: Years ago the owner of a property worth $1M and an elderly property owner placed a REVERSE MORTGAGE on their property which when funded allowed her to stay in her home and receive distributions from the lender up to a MAXIMUM sum of $700K. 

The owner now has "cannibalized" with this REVERSE MORTGAGE LOAN all of those sums and is NOW maxed out with the $700K being pulled out. The value of the home is worth a little more than that as given its poor upkeep over the years its value receded somewhat. The Owner STILL lives in the home and is alive and thriving.  The property taxes are current and insurance is current.

Q- Can the REVERSE Mortgage lender - call their loan due and accelerate their loan now that its MAXED OUT?

Not sure what their rights are as a lender but the owner is fearful that now that she has REACHED the Maximum funding amount the Reverse Mortgage loan would go to - that she may be forced to sell?

[Stephen Caceda]

As long as the borrower is current with taxes and insurance and continues to live in the home as their primary residence the lender cannot call the loan due. The borrower can continue to live there for as long as they are able. 

Even if the value were to decline significantly and the balance of the loan is greater than the value. 

The borrower is protected. 
-I’ve been doing reverse mortgages for over 8 years. 

[Bill B.]

The property value has dropped more than 30% in the last several years? Ouch. It should have climbed 30-100%. Sounds like she really timed that one perfectly and scored a big win. I don’t know what she did with $700k over several years but hopefully most of it’s in the bank. 

The only threat she faces is not paying property taxes or insurance. Or not keeping the property in a livable condition. Other than that the lender is going to lose their behind. 

[Michael Morrongiello]

Sort of what  I had thought - Thank you for affirming that. Yes if she has MAXED out
the Reverse Mortgage Loan Advances and the property value is < LESS than what she owes
(primarily due to poor upkeep and ongoing maintenance) - she gets NO More MOOLA $$ from the lender but then they may have trouble getting their loaned MOOLA E$$ back
in the future IF or WHEN that time comes for her to go to that great BIG escrow in the sky.

She continues to live there with no more income but as long as she pays the taxes and keeps it insured -the MAXED out lender cannot force her out....

[Stephen Caceda]

I wouldn’t worry about the lender, since the reverse mortgage is an fha insured mortgage they are guaranteed their money. They don’t care if the value goes down or the borrower lives forever. They are guaranteed their interest income. 

The borrower has nothing to worry about as long as they live there and pay taxes and insurance.