Written reverse mortgage contracts are the proof, the evidence, that protects your rights within the agreement. Read carefully before you sign. Ask questions and ask for examples. Work to understand your rights in as many of the hundreds of possible and impossible circumstances ahead as practical. What will happen and what could happen over the decades the reverse mortgage may exist?

This exercise will also prove to you the importance of staying on top of changes in law and finance, so you can anticipate complications in your life. Membership in proactive nonprofits will provide you with a loud voice to exert your rights. Here’s an actual example of how these two issues can combine. One that you can follow in the news and can contribute your comments to...

“AARP Sues HUD Over Shift in Reverse Mortgage Policies” reads the headline of the media release from AARP, formerly known as the American Association of Retired Persons. The law suit filed by AARP Foundation on Tuesday, March 8, 2011, states that older US homeowners have been and are being forced into foreclosure because of “confusing rules and unfair policies on reverse mortgages”. Three homeowners facing foreclosure and the loss of their homes are represented in the suit.
    
The nonprofit organization is suing HUD—the US federal Department of Housing and Urban Development—which regulates these mortgage products in the US. "HUD has illegally and without notice changed the rules in the middle of the game at the expense of vulnerable older people," said Jean Constantine-Davis, an AARP Foundation senior lawyer.

In 2008, HUD reversed its policy so that surviving spouses (even if they are not on the loan) must pay the full loan balance to keep the home, regardless of the home's value. So if the home loses equity and the survivor cannot repay the full loan amount when their spouse dies, eviction results.
       
In the US where many soon-to-be retirees and retirees on fixed incomes don’t qualify for foreclosure remedies, reverse mortgages, commonly known as Home Equity Conversion Mortgage Loans, have become the last save-my-home resort for those over the qualifying age of 62. Reverse mortgages usually end when the home is sold, the homeowner moves out, a previously-agreed upon deadline is reached, or the homeowner dies. For couples, this should be the death of the surviving spouse.

For more on the Canadian viewpoint on what a reverse mortgage is, why the older the homeowner the more can be borrowed, and when reverse mortgages end, see Reverse Mortgages: Best Friend, Worst Enemy...Your Choice!

Reverse mortgages, backed by the US Federal Housing Administration, include nonrecourse clauses which limit the collectable portion of the continually-growing loan amount to the value of the home at the time of termination. This protects the borrower and the borrower's heirs.

According to Reuters’ Corbett B. Daly, “The lawsuit alleges that the Bush administration in late 2008 changed HUD practices so that a surviving spouse who is not on the mortgage would be required to pay the full loan balance, even if that balance was for more than the home's value…A stranger, perversely, could purchase the home that was worth less than the loan amount for market value and the FHA insurance fund would kick in the difference.”

For more detail:
HUD Targeted in Suit for Illegal Reverse Mortgage Foreclosure Actions
AARP Sues HUD Over Shift in Reverse Mortgage Policies