Read the Reverse Mortgage paperwork. There are NO payments due, ever, period. That’s the purpose of an RM. Once the mortgage company gets their pound of flesh via the upfront fees and charges (taken out of the money due the elderly person or persons), all that happens is interest accumulates…and accumulates…and accumulates. When the last person on the RM dies, the heirs have a choice of paying off the balance due on the RM OR letting the mortgage company have it. Period. I would not call it “foreclosure” since NO money is owed by anyone living or by the estate. Given the circumstances, go with 2 and just get it done. (I’ve conducted a fair amount of RMs over many years as a Mobile Notary Public working for title companies, so I am familiar with the wording and terms on typical paperwork for these.) I can’t think of any “risk” unless the heirs take out fixtures that are part of the real property (no removing the furnace or central H&A, for example) or they damage the property in the course of removing the personal property. Make sure you clarify with the mortgage company the status of the property insurance and responsibility for securing the property and protecting it during the transition and also access for the heirs to remove said personal property.
