The Reverse Mortgage Loan Process

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Education

The process of obtaining a Reverse Mortgage begins with the phase you are in now. You are taking the time to obtain information, learn, and ask questions about this kind of home financing option to determine if it is right for you.

Counseling

Reverse Mortgage applicants are required to participate in an educational session with a HUD-approved counselor. Family members or advisors are welcome to accompany you and participate in the discussion. The counselor will explain the details of a Reverse Mortgage and discuss other financing options to help ensure that you make the right decision.

Application

Your Reverse Mortgage Loan Originator will help you complete and sign your Reverse Mortgage loan application. An exact copy will be left with you for your records.

Processing

Appraisal

We will arrange for a professional appraiser to contact you to schedule an appraisal to determine the value of your home. The primary function of the appraisal is to calculate the amount you can receive from your Reverse Mortgage, however, it will also be reviewed to be sure that your home meets minimum guidelines. The appraisal may be approved, suspended, or approved subject to repairs. You will be provided with a copy of your appraisal at the closing of your Reverse Mortgage.

Homeowners Insurance

It is necessary that your homeowner’s policy include replacement coverage. In the event that this is not available, your home must be insured at the maximum dwelling coverage limit allowable for your property. AnnieMac Home Mortgage will verify coverage with your insurance agent. At that time, your homeowner’s insurance will also be updated, with your authorization, to reflect the change in mortgagee on your hazard policy or condo certificate of insurance.

Title Insurance

This type of insurance protects you and your lender from claims against the ownership of the property, which might be made by:

• Undisclosed spouses
• Heirs or previous owners
• Creditors holding liens against previous owners
• Or other parties

While you will be required to purchase a title policy which protects the lender’s interest in the property, the decision to purchase a policy which protects your interest is up to you.

Underwriting

Once your appraisal is approved and the title report has been cleared an underwriter will review your loan and supporting documents to ensure that all approval conditions have been met. They will then issue clearance to close the loan. In the event that additional items are required, an individual from our processing department or your Reverse Mortgage Loan Originator will notify you. Once the additional items are received, your loan will then be cleared to close.

Closing

The processing and underwriting of your reverse mortgage can take as long as six to eight weeks in some cases. More commonly, the process will be complete within four to six weeks. It is likely that your closing will need to be coordinated by many parties including: you, your lender, your attorney, the title company and perhaps a family member.

Prior to Closing

Your Reverse Mortgage Loan Originator will help you through a loan closing checklist to be sure the following items are in proper order:

• Closing Costs and Escrow Amounts – It is possible that the Good Faith Estimate may not include all closing costs such as interim interest or property taxes. You should finalize your actual costs with your attorney or closing agent to avoid any last minute surprises.
• Acceptable method of payment – In most cases the closing costs will be financed as a part of the Reverse Mortgage. If this is not the case with your loan, be sure to speak with your Reverse Mortgage Loan Originator.
• Additional Items – Most counties require photo ID, evidence of hazard or flood insurance or other documents.

At Closing

Reverse Mortgage closings typically take place in the home for the purposes of convenience. The loan documents (which include the mortgage and the deed of trust) are provided to you to read and sign. Any fund disbursements due to you will be forwarded from the processing center after the mandatory rescission period ends. Typically a rescission period is three business days, however, certain states have implemented rescission periods of seven days.

After the Closing

As a Reverse Mortgage customer, you have responsibilities similar to those associated with a traditional mortgage, such as:

• Paying your property taxes
• Keeping your insurance coverage up to date
• Maintaining the home

To learn more, please contact Ben Stucker at 856-505-6603 or bstucker@annie-mac.com