Technically the reverse mortgage company set aside the LOC in an "account" to be used as PayrollHRGuy stated. The contract was not in any way changed on the death of one borrower. Do you think that the mortgage industry would create contracts that would allow a customer to unknowingly violate the law? If the surviving spouse had to get permission from the remainderman to take a LOC draw then it would have had to be a new loan with an application process, underwritten and secured. Since there was already a security on the Texas property, additional security would not have been allowed. Texas homestead law prevents this.That is true, and in that case I agree. However, she continued to further take equity after her husband died. I would not personally have done that. I would have considered it as stealing from his heirs.