In short: Not in Smith. When a surviving spouse signed the reverse mortgage as a “Borrower,” the lender had to prove she had died or no longer lived in the home before it could foreclose. In Smith v. Reverse Mortgage Solutions, Inc., Celia Smith signed her husband’s HECM reverse mortgage but not the note, and the lender foreclosed after he died. On September 21, 2016, ruling on rehearing, the Third District reversed and remanded for entry of judgment in her favor.
The Facts
According to the opinion, on May 8, 2008, Kenneth Smith signed an adjustable-rate note secured by a home equity conversion mortgage, a federally insured reverse mortgage known as a HECM, on the couple’s Miami-Dade home. His wife, Celia Smith, signed the mortgage but not the note. The home was their homestead and principal residence.
The mortgage’s opening paragraph named Kenneth, “a married man,” as the “Borrower.” But Mrs. Smith’s name was pre-printed in the signature block under the words “BY SIGNING BELOW, Borrower accepts and agrees,” and both spouses signed before two witnesses and a notary. Paragraph 9 allowed the lender to call the loan due if a Borrower died and the property was not the principal residence of at least one surviving Borrower.
Kenneth Smith died in December 2009. Reverse Mortgage Solutions sued to foreclose, alleging he was the sole borrower and that his death triggered acceleration. Mrs. Smith denied the conditions precedent and pleaded that she was alive and still living in the home. After a bench trial, the court entered a form final judgment of foreclosure for $248,403.59 with no findings on conditions precedent. There was no trial transcript in the appellate record.
The case was argued in 2014. The points below are what the lawyers argued.
- Mrs. Smith’s lawyer, Julie Kronhaus, argued that a HECM must comply with federal law, which bars HUD from insuring a reverse mortgage unless repayment is deferred until the homeowner’s death and defines “homeowner” to include the homeowner’s spouse.
- One judge pointed to the HUD regulation requiring the mortgage to say the loan becomes due if a mortgagor dies and the property is not the principal residence of at least one surviving mortgagor, and asked whether the lender’s use of “Borrower” instead of “mortgagor” conflicted with it.
- The lender’s lawyer argued Mrs. Smith signed only to join in the homestead mortgage, not as a borrower, and that the federal defense was not pleaded. He also told the panel the property had been sold to a third party after the judgment, a fact not in the appellate record.
The Decision
The Third District first reversed in an opinion dated July 15, 2015, which remanded for a new trial limited to whether the home was still Mrs. Smith’s principal residence. On rehearing, the court denied the lender’s motion but withdrew that opinion and substituted a new one on September 21, 2016. On October 27, 2016, the court granted the lender’s motion for clarification and corrected one sentence of the remand instruction. The mandate issued November 14, 2016. One judge dissented.
The court held that Mrs. Smith “was a ‘Borrower’ as that term is contemplated in Paragraph 9” of the mortgage. Three things supported that reading: she signed under the Borrower acceptance language; Florida’s Constitution required her joinder to mortgage the homestead, so the Borrower’s covenant that it had the right to mortgage the property was accurate only if she was a Borrower; and the federal HECM statute shows Congress’s intent to protect a reverse mortgagor’s surviving spouse from foreclosure.
Because she was a Borrower, the lender had to prove she had died or that the home was no longer her principal residence. “Reverse Mortgage Solutions pleaded neither occurrence.” The court reversed and remanded for entry of judgment in Mrs. Smith’s favor, while noting the lender could file a new foreclosure if a condition precedent later occurs. The court said it was not deciding cases where the surviving spouse’s ownership is disputed, such as after a quitclaim deed.
The Law
Federal law, 12 U.S.C. § 1715z-20(j), bars HUD from insuring a HECM unless the homeowner’s obligation to repay is deferred until the homeowner’s death, the sale of the home, or other listed events, and it says the term “homeowner” includes the homeowner’s spouse. HUD’s regulation at 24 C.F.R. § 206.27(c)(1) addressed when the mortgage could become due after a mortgagor’s death.
Under Article X, section 4(c) of the Florida Constitution, a married owner cannot mortgage the homestead without the spouse joining. That is why lenders have spouses sign mortgages even when they do not sign the note. In Smith, the way the spouse signed made her a Borrower under the contract.
A foreclosing lender must prove the conditions precedent to its right to foreclose. Under rule 1.120(c), a defendant who wants to put conditions precedent at issue must deny them specifically and with particularity. Mrs. Smith denied them and pleaded that she was alive and living in the home, and that was enough to require the lender to prove an event that triggered the loan coming due.
Current law (2026): After cases like Smith, HUD changed its rules for non-borrowing spouses. For HECMs with FHA case numbers assigned on or after August 4, 2014, an eligible non-borrowing spouse who meets HUD’s conditions can remain in the home after the borrower dies during a deferral period, now set out in 24 C.F.R. § 206.55. Older loans, and spouses who do not meet the conditions, may still face the question Smith answered.
Lessons
- A surviving spouse facing a reverse mortgage foreclosure should read the signature page and the death and occupancy clauses of the mortgage. How the spouse signed can decide the case.
- Deny the conditions precedent specifically in the answer. Mrs. Smith’s pleading made the lender prove an event it never alleged.
- An appeal without a trial transcript can still succeed if the error appears on the face of the judgment and is a pure question of law, as it did here.
- Couples taking out a reverse mortgage should ask, in writing, whether the younger spouse is a borrower or a non-borrowing spouse and what happens when the first spouse dies.
Source: Smith v. Reverse Mortgage Solutions, Inc., No. 3D13-2261 (Fla. 3d DCA Sept. 21, 2016) (on rehearing, substituting opinion of July 15, 2015); ACIS docket.
Watch the Oral Argument
These are two uploads of the same oral argument. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
⚖️ One Signature on the Note, Two on the Mortgage: Is a HECM Spouse a "Borrower"?
🔏 A Reverse Mortgage, a Non-Borrower Spouse, and Two Signatures on the Mortgage
Read the Law on FloridaRules.net
The statutes and court rules discussed in this article, free to read on FloridaRules.net:
Go Deeper
- Reverse Mortgage Foreclosure: What Seniors Need to Know!
- Wife Never Signed the Mortgage: Foreclosure Affirmed Anyway (Khoury v. Deutsche Bank)
- The Default Letter Defense in Florida Foreclosures: Paragraph 22, HUD, and VA Pre-Suit Notice
Frequently Asked Questions
Can a reverse mortgage company take the house when my husband dies?
Not if, as in Smith, the mortgage treats you as a Borrower and you still live in the home. In Smith, the wife signed the mortgage as a Borrower, so the lender had to prove she had died or moved out, and the Third District reversed the foreclosure.
What is a non-borrowing spouse on a reverse mortgage?
A spouse who is not a borrower on the HECM. For HECMs with FHA case numbers assigned on or after August 4, 2014, HUD rules let an eligible non-borrowing spouse stay in the home during a deferral period if HUD’s conditions are met.
Why did my spouse have to sign the mortgage if only I signed the note?
Florida’s Constitution requires a spouse to join in a mortgage of the homestead. In Smith, that joinder, plus signing under the Borrower language, made the wife a Borrower.
Can a reverse mortgage lender foreclose later if the surviving spouse moves out?
Yes, if the mortgage’s conditions are met. The Third District noted that Reverse Mortgage Solutions could file a new foreclosure if a condition precedent, such as Mrs. Smith’s death or her leaving the home, later occurs.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
Read the law yourself, free: every Florida statute and court rule is on floridarules.net.
This article is general information about Florida law, not legal advice about your situation. Reading it, watching the videos, or contacting the firm does not create an attorney-client relationship. Every case turns on its own facts, and past results do not guarantee a similar outcome. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
