More interesting facts about Reverse Mortgages and Trusts in Oregon

More interesting facts about Reverse Mortgages and Trusts in Oregon

There have been a lot of changes with Reverse Mortgages over the years- they definitely are NOT the reverse mortgages of years gone bye.  There are more protections for the borrowers and flexibility also.  Here are just a few facts to know  when considering if a Reverse Mortgage is right for you.

Can my property be held in a TRUST?

HUD will insure HECM (Home Equity Conversion Mortgage) loans on property held in an inter vivos trust, also known as a living trust.  Properties held in a land trust are also eligible fore a HECM if the requirements for a living trust are met.

1. a complete copy of the trust must be included in the application file.
2. All current beneficiaries of the trust must be borrowers and must be receiving the net income of the trust.
3. The portion of the trust which holds the property must be revocable
4. All trustors/primary beneficiaries must be the borrowers.
5. All borrowers must be the trustor/primary beneficiaries.
6. Trustees must have the right to borrower and encumber the subject property.
7. If a trustor/primary beneficiary is deceased, an attorney opinion letter is required for underwriting submission- if you need this, I can give you an example of what is required.

Can I transfer the property in to or from a Trust after Closing?

1.        A borrower under an insured HECM may transfer the property to a living trust without causing the mortgage to become due and payable if the lender finds that the trust meets all requirements that would have applied if the trust owned the property at closing.  The lender may require the trust to formally assume the borrower’s obligation to repay the debt as stated in the Note if considered advisable to avoid difficulty in the enforcement of the Note and Mortgage.

2.        If an existing trust is terminated, or the property is otherwise transferred from an eligible trust holding the property, the mortgage will not become due and payable provided that one or more of the original borrowers who signed the Note and Loan Agreement continue to occupy the property as a principal residence and continue to retain title to the property.

I have been doing loans since the late 1980’s, I have seen a lot of changes- good, bad and ugly, and I am still standing and enjoying what I do. Life is wonderful! 

For more info on Reverse mortgages and "regular" mortgages- call me at 541-868-2660.  Or if you would like more information, email me at helen@titanfg.com