IOW, thinking your mom will get $250k to sign over property to a reverse mortgage lender is foolish. There is also PMI associated with RM, although I don't know how it is levied. IMO, your mom does not fit any category which would warrant a reverse mortgage, sounds like you're trying to trick the system that figured out all the tricks before inception.
I haven't really looked into how they work, but it seems like it would go something like this:
Assume you have 100% equity.
You basically requst 80% of your equity paid out as a sort of annuity (although it would be a monthly payment) for an agreed upon term - say 20 years.
At the end of the term, you still hold 20% of the equity, the lien holder has 80%. At this point it seems that you could either sell the remainder of your equity to the lien holder for a lump sum pay out, apply for a new mortgage on the 80% that the lien holder has OR sell the property on the market, pay off the lien holder and pocket the difference.
If you die before the end of the term, whatever equity is left is considered a part of your estate. The lien could be settled with a cash sale where the balance is paid off and the difference is applied to the estate.
I'm not trying to trick the system, I'm trying to find out if the scenario I just spelled out is basically how it works, and if there are always other pitfalls that the mortgage lender pulls on you. It's my understanding that the mortgage lender does not take title, it's only a lien and the owner retains title.
And at 75, she's a lot closer to the end than the beginning - actuarily speaking, of course. After all, she is my loving mother.