http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm

To quote two points from Top Ten Things To Know:

"To be eligible for a HUD reverse mortgage, HUD's Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area."

"When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs."

The last line of point two keeps rolling around in my head as an oxymoron:

None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.

This doesn't make sense to me. What if my customer, upon the death of the parent, does not have the money to repay the lender? It forces my customer to sell the house because in reality the debt of the loan affects the estate of the heirs if they do not have the resources to settle the payoff amount. It seems to me the debt is passed along, so why advertise it isn't to a 62 year old who may believe this is a good thing. What say you?