Hola Victor.

What you are seeing is completely normal with reverse mortgages. Every FHA-insured reverse mortgage, called a HECM, is always set up with two mortgages recorded for the exact same amount. One is between the homeowner and the lender, and the other is between the homeowner and HUD. HUD isn’t really acting like a second lender trying to get paid separately; it files its own mortgage to secure the government’s insurance interest. That way, if the lender doesn’t recover everything when the loan comes due, HUD covers the loss.

When a reverse mortgage gets refinanced, both mortgages (the lender’s and HUD’s) get satisfied. That is why you saw two satisfactions recorded in 2021 for the old $170K loan, and then two new mortgages filed when the $315K reverse mortgage was issued.

Now that the borrower has passed away and the loan has gone into foreclosure, the lender’s mortgage is the one being enforced. That is why Finance of America Reverse has the judgment for around $209K. The HUD lien is not something that will survive against you after the foreclosure sale. It is tied to the HECM insurance program and falls away when the lender is paid, either from the foreclosure sale proceeds or directly by HUD.

The only thing you need to double-check in the court file is that HUD was named as a defendant in the foreclosure case. That is standard practice in these cases, but it is worth confirming. If HUD was included, both mortgages will be wiped out by the foreclosure judgment, and you can bid without worrying about that extra lien showing up later.