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What You Need To Know: Buying A Foreclosed Reverse Mortgage Home
My very first transaction as a REALTOR involved a reverse mortgage and I've hated them ever since. This is my most recent experience and it has done nothing to change my opinion.
A buyer client asked to see a foreclosure. He is an investor, but claimed he wanted to purchase the home to fix up and live in. I had previously shown the property to another buyer who didn't take more than one step inside before retreating. I prepared him for the condition and he didn't seem too perturbed upon seeing (and smelling) the house. Someone had died inside and had not been discovered right away.
In the "Private Remarks" section of the MLS listing were the words "See virtual tour and URL's icon for more information on 24 CFR 206.125." We knew it was a foreclosure because the Seller Type was listed as Lender/REO. But this 24 CFR 206.125 was a new wrinkle.
Here's what it means: the owner of the property had a reverse mortgage and the note was in default due to the mortgagor's death, failure to pay taxes, or both. 
This complicates things more than with a normal, plain vanilla foreclosure. HUD has regulations which control the terms for the acquisition and sale ... more

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