Title/Settlement Agent Approval Recommendation

Transcription

1 Reverse Mortgage Solutions, Inc. Attention: Elly Johnson 5604 Wendy Bagwell Parkway Bldg. 100, Suite 112 Title/Settlement Agent Approval Recommendation Company Name: Company Address: City, State, Zip: Company Phone: Company Fax: Primary Contact: Please give a brief description of your Reverse Mortgage experience: Please submit the following documents with your completed application: Errors and Omissions/Personal Liability Insurance - $500,000 minimum Wiring Instructions Blanket Closing Protection Letter (Insured Closing Letter) from all title underwriters. RMS should be listed as the named insured as indicated below: Reverse Mortgage Solutions, Inc Wendy Bagwell Parkway, Bldg. 100, Suite 112 The reference pages attached to this application are yours to keep. Please DO NOT return them with your completed application. Signature of Authorized Representative Date CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 1 of 6

2 Frequently Asked Questions What is a reverse mortgage? A reverse mortgage enables homeowners, age 62 and older, to borrow against the equity in their homes without having to sell their home, give up title or take a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is reversed. Instead of making monthly payments to the lender, as with a regular forward mortgage, the lender makes the payment(s) to the borrower. (National Reverse Mortgage Lenders Association FAQ at How does a borrower receive their money? Borrowers have the option of receiving their money in one of the following methods: Lump sum a lump sum of cash at closing. Tenure equal monthly payments as long as the homeowner lives in the home. Term equal monthly payments for a fixed number of years. Line of Credit draw any amount at any time until the line of credit is exhausted. Any combination of those listed above. How is the reverse mortgage repaid? In general the loan becomes due and payable when the last surviving homeowner permanently vacates the property or passes away. Once a maturity event occurs the estate has approximately 6 months to pay off the balance of the loan by either selling the home or paying off the loan through other means. Any remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage. Why are there 2 Notes and 2 Security Instruments? The Second Note and Second Security Instrument are made to the Secretary of Housing and Urban Development and are executed and recorded to protect the borrower s payment stream in the event that something happens to the lender. Once the loan is paid in full, both the first and second security instruments are released. How should title insurance be calculated? The Maximum Claim Amount is used to calculate the title insurance. The Maximum Claim Amount is equal to the lesser of the appraised value of the property or the HUD national lending limit. Are there any fees that are not allowed on a Home Equity Conversion Mortgage? Yes. The following fees are never allowed on a HECM refinance transaction: Fee Download Fee Copy or Printing Fee Storage Fee Processing Fee Underwriting Fee Tax Service Fee Sub-Escrow Fee Wire Fee CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 2 of 6

3 General Reverse Mortgage Settlement Instructions These are general closing instructions and are subject to change at any time. Loan specific closing instructions will be provided with every closing package. They will include any additional closing/funding conditions and will supersede these instructions on any conflicts. The following instructions are to be strictly followed: Loans MUST close as dated or package must be re-drawn. If the loan does not close, please notify the closing department immediately. Closed loan packages MUST be returned within 24 hours of loan signing. Funding may be delayed if closed loan package is not received in a timely manner. As the settlement agent for the transaction, you are only authorized to disburse the funds delivered to you provided you are in compliance with the following: I. Loan Signature Requirements: Borrower(s) MUST sign all documents as their name appears on the signature line of the document. Undersigning is not permissible under any circumstances and may cause a delay in the funding of the loan. If any changes are needed, contact the closing department immediately. Borrower(s) MUST also date all documents where required. II. Loan Fee Requirements: A. The lender MUST authorize any changes to fees associated with this loan. The Settlement Agent must present an estimated HUD-1 to the Lender for approval, and once approved, changes to the HUD-1 Settlement Statement are not permitted. For questions relating to loan fees, please contact the closing department. B. Borrower(s) MUST execute the HUD-1 Settlement Statement which has been approved by the Lender. Any discrepancies should be brought to the attention of the closing department prior to execution of the closing package. III. Title Insurance Policy Requirements: A. The amount used to determine title insurance for HECM loans MUST be equal to the Maximum Claim Amount. B. The mortgage amount shown on the face of the policy (and in the recording information of Schedule A or B) MUST be the amount as shown on the security instrument. This amount is used to determine recording costs, intangible taxes and documentary stamps and is calculated at 150% of the Maximum Claim Amount. C. The following endorsements to the title policy, as well as any state-specific endorsements required to clear title (mineral rights, etc.) MUST be provided. a. Endorsement 9 (Restrictions, Encroachments, Minerals) b. Endorsement 6.2 (Variable Rate Mortgage Negative Amortization) c. Endorsement 8.1 (Environmental Protection Lien) d. Revolving Credit or Reverse Mortgage Endorsement (where available) CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 3 of 6

4 e. Endorsement 5.1 (Planned Unit Development) (if applicable) f. Endorsement 4.1 (Condominium) (if applicable) g. Endorsement 7 (Manufactured Housing) (if applicable) h. Survey Exception Endorsement (if applicable) i. Trust Endorsement (if applicable) j. Any state-specific required endorsements D. Vesting MUST be exactly as it appears on the security instruments. E. The estate or interest in the property is to be held as fee simple, leasehold or life estate. All leasehold and life estate properties MUST have prior approval from the lender. F. Standard exceptions MUST be deleted from the final title policy. G. Real estate taxes MUST be shown as paid, or as future taxes that are not due and payable. Taxes due/delinquent within 60 days of the closing date MUST be paid at closing. H. All conditions, restrictive covenants, building lines and violated easements must be reflected along with affirmative coverage against monetary loss or forfeiture of property. I. All assessments MUST be paid in full. Any assessment that cannot be paid in full MUST be deleted from the title policy or the lender must receive written confirmation, from the title company, that these assessments will not affect the lender s lien position. J. The subject property MUST be free from any physical encroachments. Encroachments must either be deleted from the title policy or the lender must receive written indemnity from the title company. K. Manufactured homes MUST be reflected as real property on the title policy. The settlement agent must ensure that title to the manufactured home is eliminated in accordance with applicable state law and must hold the lender harmless from any and all cost, damages and liability which may result from the certificate of title being improperly eliminated. L. The mortgagor and the mortgagee information for the first security instrument and the assignment MUST be reflected on Schedule A. The second security instrument may appear on Schedule B. M. All liens attached to the subject property are to be paid and/or satisfied at the time of closing. This includes, but is not limited to tax liens for town, county and school, delinquent taxes as well as water and sewer rents. N. All Powers of Attorney or Trust Agreements must be approved by the lender as well as the title company underwriter. The POA or Trust Agreement must be recorded prior to the first and second security instruments. O. The lender MUST be insured that the security instrument is a valid first lien for the amount of the property described in the title policy, naming the lender as the insured/mortgagee. IV. General Closing Conditions: A. For properties located in a Homestead or Community Property state, the non-borrowing spouse (if applicable) MUST sign the security instruments, all rider and a separate Home Equity Conversion Mortgage Notice of Right to Cancel form. CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 4 of 6

5 B. Please make sure that each borrower (including any non-borrowing spouse and/or remainderman) is given two original Home Equity Conversion Mortgage Notice of Right to Cancel forms at the time of closing/signing. All copies of this form MUST be signed acknowledging receipt. C. Please make sure that the borrower(s) receive a complete copy of the executed closing package. D. Settlement agent MUST certify the Security Instruments and Notes as true and correct with a live signature. Stamps are not acceptable. V. Loan Disbursement Requirements: Proceeds may be disbursed provided you are in compliance with the following: A. The three day right of rescission period has expired. B. The borrower(s) is/are still alive and has/have not rescinded the transaction. It is the responsibility of the settlement agent to confirm, the borrower, is not deceased and he/she has not rescinded the transaction. No funds should be disbursed until this confirmation has been obtained. If the borrower rescinds the transaction or is deceased, the settlement agent MUST notify RMS and return all funds immediately. C. The settlement agent is responsible for disbursing all funds, to the designated vendors, in accordance with the HUD-1 Settlement Statement provided by the lender. VI. Loan Document Delivery Requirements: All closing documents are to be executed by the borrower(s) and returned to the lender within 24 hours of closing via Express Mail or courier to RMS at the address below. Shipping charges incurred are the responsibility of the settlement agent and are not to be charged to the borrower. Please do not staple any documents. Reverse Mortgage Solutions, Inc. Attention: Funding Department 5604 Wendy Bagwell Parkway, Bldg. 100 Suite 112 A. One original and two true and certified copies of the following: a. Adjustable/Fixed Rate Note b. Adjustable/Fixed Rate Second Note c. Adjustable/Fixed Rate Mortgage/Deed of Trust 2 certified copies only d. Adjustable/Fixed Rate Second Mortgage/Deed of Trust 2 certified copies only e. Applicable Riders (PUD, 1-4 Family, Condo) 2 certified copies only f. HUD-1 Settlement Statement B. Short form Title Policy is required (where state law permits). CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 5 of 6

6 C. The following are lender documents and are NOT required to be executed by the borrower. Please return the blank documents with the closing package. a. Lender Certificate b. Mortgagee Certification c. Notice to the Borrower d. Choice of Insurance Option D. Copies of all disbursement checks are required to be sent to RMS as soon as disbursement has been made. E. The following trailing documents are to be returned to RMS, at the address below, within 90 days of disbursement. Reverse Mortgage Solutions, Inc. Attention: Final Documents Department 5604 Wendy Bagwell Parkway, Bldg. 100 Suite 112 a. Original recorded Mortgage/Deed of Trust b. Original recorded Second Mortgage/Deed of Trust c. Original recorded Assignment (if applicable) d. Final Title Policy Please keep these instructions for your reference. Should you have any questions about the instructions please contact the closing department. By signing the Application for Settlement Agent Approval you agree that you have read and understand the General Reverse Mortgage Settlement Instructions. We look forward to doing business with you. CM022C - RMS Title/Settlement Approval Recommendation r6/30/2012 Page 6 of 6