We all know that Reverse Mortgage Settlements can be tricky. You need an experienced closer that is patient and professional. Advantage Title's Reverse Mortgage Team has closed hundreds of reverse mortgage transactions. We have put together the 5 frequently asked questions that arise during the settlement. Your borrowers will feel more comfortable if these are addressed prior to closing:
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Why are there 2 Deeds of Trust? The first Deed of Trust represents your lenders lien on the property. The second represents HUD as they assume the second position because HUD is insuring that the homeowner will continue to receive loan payments in the event that the lender becomes incapable of making these payments.
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Can I add/remove persons from title after the closing? Consult your loan officer first! The loan amount is based on the borrower's age, life expectancy, and value of the home. Changing title can make the loan become due.
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Why is the loan amount on the Deed of Trust more than the maximum lending limit ? Since there is no maturity date on the loan, HUD calculates the loan amount by increasing the amount on the deed of trust by 1.5 times the maximum claim amount or appraised value, whichever is less.
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Why is a Mortgage Insurance Premium collected? A mortgage insurance premium is collected and paid to HUD because they are insuring the loan in case the lien surpasses the homes value or if the lender can no longer make payments.
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Why is the title insurance so high? The amount of title insurance on a Reverse Mortgage required is based on the maximum lending limit or appraised value, whichever is less.
Please let me know of any other FAQ's that arise during your settlements...
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