i've seen it all now....

As long as there's no set date to surrender the property (meaning it's theirs until they die), I'd be fine if my parents did something like this. Their equity does nothing for them when they die, my brothers and I all own homes already, and we're all old enough that they don't owe us anything. If it allows them to enjoy retirement just a little bit more, I don't see a problem.

They've been around for a while.  To me, it sounds a little scary - I'm not sure I'd want to totally trust a bank not to sell my house out from under me once the mortgage is paid off.  Of course, most folks with a reverse mortgage are probably not doing it because they want to.