A reverse mortgage is a loan like any other standard loan. The bank places a lien on the property in exchange for advancing you money from the equity you have in your home, and when it becomes due, it must be paid off. A reverse mortgage can be paid off any time without a prepayment penalty. You still own the home and are responsible for insurance and property taxes. When you die, your estate / heirs will inherit the home; the bank does not keep the house. But any liens on the property, and this also includes unpaid property taxes, mechanics liens, federal/state/county liens, lines of credit, 2nd mortgages, etc., must be paid off first before the heirs can take it over. This applies to any mortgage on the property, even if it is not a reverse.
A problem arises when the loan is greater than the value of the home and there is nothing left to inherit. In this case, the heirs may just want to walk away and sign over to the bank a Deed in Lieu of Foreclosure, and let the bank deal with selling the home. Again, this would apply to any loan on the home if the home is upside down. But the bank doesn't automatically take over or own it when you die.
The good news with a reverse is that unlike regular loans, the loan is not due immediately and you have at least 6 months to either refinance or sell. If you are working with the bank and make a good faith effort, you may be able to get two 3-month extensions for a total of one year. You don't get that with a regular loan.
Some heirs don't like any loans on the family home because it means they inherit less. I guess if they had the funds to help their relatives in the first place so that the senior didn't need to do a loan, then that would be the perfect scenario. But most children do not have the funds to take care of both their own families and their parents; and most seniors typically only have the home as their only available asset; and if they need funds to survive or in order to live a good quality of life, they have a right to spend their money (home equity) in any way they see fit and no adult "child" is entitled to an inheritance.
The reason why reverse mortgages are frowned upon by some is because in order for the senior not to have to make monthly mortgage payments like you have to do with a regular loan, each month that they do not make the payment, the loan balance increases - and therefore the remaining equity decreases over time; And this means, of course, less inheritance. But if a senior had the income to make monthly mortgage payments to begin with, they probably would not need a loan as they would have the cash already in hand. If they didn't have the cash to manage their monthly budget or pay for major expenses (medical, home improvements, etc.), doing a regular loan requiring monthly payments would be like borrowing from Peter to pay Paul, as the loan would be used to pay itself. Once the money runs out and they can't make that monthly payment, the bank would foreclose on them. With a reverse, since no monthly mortgage payments are required, the bank cannot foreclose on them for not making monthly payments.
Also, because no mortgage payments are required, what makes a reverse mortgage particularly appropriate for seniors is that they do not have to qualify in terms of income or credit history, since most seniors are on a fixed income and likely not to qualify for a regular loan.
I specialize in reverse mortgages (CA)