Reverse Mortgage REO

[Bryan L.]

Made an offer today on an MLS-listed REO. The listing agent told me that it was a reverse mortgage. Can someone explain this to me? I think I know what a reverse mortgage is - where an older person (or persons) mortgage a house that they own out-right and get monthly income in return. So, how and when does the bank get it back and put it up for sale. They can't "foreclose" on it can they, since the owners aren't making payments (they're actually receiving payments aren't they?). So, if the person dies, does the bank get the house then and put it on the market?

[Wayne Brooks]

They're FHA insured and they must get 95% of appraisal to be fully reimbursed by FHA.