Reverse mortgages - understand the recorded amounts

[Lauren B.]

This year especially I’m noticing a lot of properties for sale that have reverse mortgages that are seemingly underwater.

It’s not just N.C. - I’m from Pa and have noticed a few there too.

Here’s what I think I know. If you’re a mortgage professional please educate me.

I understand reverse mortgages are originated by private mortgage companies and backed by HUD. The homeowner can take a lump sum or draws. If the loan is 95% fulfilled It can be assigned to HUD.

I have read things like reverse mortgages allow homeowners to access 50-66% of their equity , yet the recorded amount is 150% of that. WHY?

And how can reverse mortgages end up underwater?

I read an article saying the amount recorded is 150% of the loan amount to account for “growth features”. What does this mean?

Here’s the article I’m referencing ;

https://reverse.mortgage/reverse-mortgage-notes-trust-deeds

Thanks.