How do you end up in foreclosure because of a reverse mortgage? And is that a reverse foreclosure? What do you do if you inherit a house that has a reverse mortgage?
Before we answer those questions, let's first define what a traditional and reverse mortgage are.
In a traditional mortgage, you borrow a lump sum of money to purchase a home, then pay it back in monthly installments, plus interest, over time. You start out with little or no equity and build it as you pay down the balance of the loan. If you stop paying your mortgage, your home will be foreclosed for defaulting.