Reverse Mortgage Documents

Credit service fees often generate a question. The loan service fee is $30 to $35 per month. Borrowers can ask if they need to make a monthly payment of $30 to $35. There is no need to make a monthly payment for the loan service fee, as these amounts are taken into account long before the loan advance amount is set and the documents are on the table, but your answer should be, “I understand that this question was answered during your consultation session. What did they tell you? Before you check out some facts about reverse mortgages, remember that you`re not here to act as a police officer. One of the first documents in the final set is the HUD-1 settlement statement. This form includes all closing costs, interest rate, all mortgages repaid and net proceeds. Since the Johnsons brought money to the closing table, they did not embezzle additional funds from the reverse mortgage. Two Pfandbriefe Real Estate – In a refinancing mortgage, the note tells borrowers what the terms of their loans are and what the loan is. Reverse mortgage notes don`t give you a good answer to the interest rate, the amount borrowed, or the term of the loan.

One note will name the lender and the other will name the U.S. Department of Housing and Urban Development (HUD). Both notes are signed. Reverse mortgages allow retirees aged 62 and over to use their home equity as an additional source of income. It is a valuable financial tool for older homeowners, as it provides them with reliable cash flow so they can fully enjoy their retirement. To succeed in a reverse mortgage, you must have certain documents ready. If you encounter an unusual case that does not comply with the following rules, remember that it is not your concern to cancel a signature. There are legal ways for borrowers and lenders to mitigate the circumstances. Mitigation measures cannot be easily recognized by a layman. If you are concerned about the legality of a loan, put your concerns in writing and submit them to the lender, the title company and copy your landlord. But never try to determine whether a particular criterion for a reverse mortgage is met or not.

As with any loan, you must report the suspicion of mortgage fraud to F.B.I. Part IV – Disclaimer and Final Word on How to Deal with Reverse Mortgages The closing of a reverse mortgage can range from a few business days to 21 to 45 days. However, depending on your situation, the process may take longer. The process can take a long time as you need to collect important documents and different parties need to be contacted. You might be inclined to jump straight to “Part III From the Notary Signing Agent`s Perspective” and read it, but please take the time to go back to Parts I and II, where we`ll lay the groundwork and give you a necessary foundation for making reverse mortgage signatures. Part IV contains our disclaimer – we remind you that we do NOT give you legal advice. Part IV also reminds you that seniors have the right to make their own decisions and that this article will only help you build your confidence so that you can effectively manage the presidency of signing a type of loan that you may never have experienced before. LIKE SO MANY OTHERS BEFORE THEM, the couple sitting in front of me at my desk were ostensibly agitated, visibly nervous about their financial situation, nervous about venting their money problems in front of a stranger, nervous about their future. But perhaps more importantly, they were nervous about the whole concept of a reverse mortgage. As I listened, I briefly reflected on how scary aging can be and how important education is in the reverse mortgage process – education before application, during processing, at graduation, and even after graduation. While many things remain the same, there are some differences in reverse mortgages that affect your signing procedures.

In addition to providing the required documents, there are several closing costs and fees for which you are responsible. Here are some closing costs to keep in mind as you enter this stage of the reverse mortgage process: As the pile of forms dwindled, the Johnsons asked me something I was often asked, and that was whether it was possible to refinance a reverse mortgage. It may indeed be possible to refinance as the house increases in value; However, I want to emphasize that potential refinancing in the future must be weighed against current interest rates and the current value of the home, and there is never any guarantee that the numbers will work. As a former teacher, I believe in visuals, so I used the famous pie chart to illustrate how equity in the Johnsons` home can increase if the house increases in value or if they end up paying off the reverse mortgage debt. When you close the loan, you sign documents for the full amount, but you only have to repay the amount you borrow plus interest on that amount, not the entire line if you don`t use everything. This section explains the basics of this type of loan. A reverse mortgage is a “no recourse” loan. By definition, non-recourse loans are secured by collateral guarantees. The collateral is usually real estate, and the borrower in question is not personally responsible for repaying a non-recourse loan. For obvious reasons, this type of loan appeals to seniors on tight budgets. They can take out loans against their home and do not have to repay the loans during their lifetime.

The reverse mortgage program allows more seniors to stay in the home they love. Below you will find what you will need to complete your loan, as well as general information about the reverse mortgage. Some programs offer reverse mortgages for home repairs and small improvement projects. These are funded by a shrinking population of non-profit organizations and consenting local governments. There are also private/owner reverse mortgages. These are loans supported by the private companies that offer them; These companies grant the loans as an investment in real estate and there are fewer regulations imposed on them to protect the elderly. The vast majority of closures take place without significant events. However, the Johnsons` conclusion reminded me in Technicolor terms that no matter how many times I explain the mechanics of a reverse mortgage, I ask my clients to include a lot of information in a short period of time: halfway through the close, Mr. Johnson looked at me and said, “All week I was depressed to give my house to the bank.” If you`re a notary who has been asked to make your first appointment to sign a reverse mortgage, you may feel a little confused when you first glance at the loan file.

You will find that there are two mortgages (or trust deeds) and two real estate liens. It`s pretty easy to manage. You will simply let the borrowers execute both together. But knowing why there are two will be helpful. There are also other issues with reverse mortgage documents that you should be aware of before you sit down at the table with borrowers. Another important disclosure in the closing package is the home equity conversion mortgage agreement. This 10-page document explains how a reverse mortgage works and describes the legal obligations of the borrower and the lender. There is also the “Truth in the Right to Terminate the Loan” form, which tells borrowers that they have three days to cancel the transaction if they wish. Then comes the issuance of the loan amount indicated on the documents. HuD does not require a maximum mortgage amount to be shown on the mortgage because no payment is required, many reverse mortgages have growth characteristics in the available lines, and the balance due increases because borrowers do not make payments. Reverse mortgage packages are filled with the same types of documents you`re used to in a regular refinancing loan.

There may be more documents from the title company, but the documents will otherwise be similar. A home equity contract document is added, documents that discuss the age of borrowers in relation to the reverse mortgage, those that discuss amounts set aside, debt repayment documents or repair bills. The big difference is that with the reverse mortgage, there is an additional note and deed in case the HUD also needs to advance funds. You can either pay the closing costs in cash or use the money from the reverse mortgage. Keep in mind that while using your loan money will save you from having to bring money to the closing meeting, it will reduce the amount you will receive. Work closely with a financial advisor to determine the best course of action for you. To complete your loan, here is a list of reverse mortgage closing documents you need: HECM loans are guaranteed by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD).

To put it simply, if the lender or credit manager files for bankruptcy for any reason, the FHA insures the loans and the funds will continue to be available to reverse mortgage borrowers. In addition, FHA is able to mitigate the problem for a lender if borrowers live long enough for lenders to lose money on loans. A long time ago, I adopted the practice of telling customers that after closing, they could receive official advertising in the mail. .