Posted by LJ on 11/25/07 3:15pm
Msg #222823

Reverse Mortgage Question regarding Exhibit A

Had my first RM that didn't close. This was due to the legal description of the property. This particular gentleman wanted the RM on his home and 10 acres surrounding it. The Exhibit A read the 10 acres PLUS his 42 acres of farmground. He does not want a lien placed on the farmground. The appraisal was done on only the 10 acres and this is what the loan was based on.
My thoughts on this are: The 10 acres plus the 42 acres are recorded as 52 acres at the court house. In order for him to do this the way he wants, these acres need to be recorded separately. Is this correct?
He was very upset and refused to go any further.

Reply by Lee/AR on 11/25/07 3:21pm
Msg #222824

Not recorded separately, but the legal description of the property being mortgaged needs to be defined with a different, new legal description of the specific 10 acres intended to be mortgaged. This is often easier said than done. Might even need a survey.

Reply by LJ on 11/25/07 3:54pm
Msg #222830

Lee, I did this gentleman's RM app also. That was 2 months ago, almost 3. About a month ago I called the company to see if the loan had been cancelled, denied, etc. (because I was being paid a total amt for both) I was told that there were survey problems and it was taking longer than expected. That's all I was told. So, obviously the survey has something to do with it and it is not resolved as of yet. There were other problems along with this. He refused to sign the HUD because of the payoff shows taxes being paid. They are already paid. We called and were told to sign everything but the HUD. Thanks for the insight, I think you hit it correctly.

Reply by Kate/CA on 11/25/07 3:50pm
Msg #222829

The 10 acres and the 52 acres need to be split and recorded as individual properties. He will probably have to have them surveyed. I have had several clients that had to do this.

Reply by Lisa Prestegard on 11/25/07 4:12pm
Msg #222832

I do not know IL law, but...

in Missouri (where acreage parcels are frequently adjusted), it is a county issue and the "new" legal descriptions must pass by the County assessors office and get their seal of approval. This requires more than just a simple survey, LJ. **It requires replatting the parcel, which is very time consuming in most instances, and quite costly**

Your Borrower was very savvy to notice this before encumbering all of his 52 acres on a 10 acre + structure appraisal. Good for him

Reply by BrendaTx on 11/25/07 7:42pm
Msg #222853

Re: I do not know IL law, but...

Back when I did IREP/Beneficial loans I can't tell you how many times that the whole parcel was to be encumbered (Via Exhibit A) rather than just the home and one acre as agreed upon.

Sometimes they walked out, sometimes they were so in financial distress they signed.

I always had to call in the AE to discuss. It was always, "well, we'd have to do another survey and we can't do that in less than ___ weeks." or "Sorry, but that's just the way it has to be."

(And, no-- these weren't RMs, they were cash outs.)

Reply by Tess on 11/25/07 6:06pm
Msg #222839

If not done already,you will most likely find that he will have to subdivide the property and that can be a lengthy and costly thing to do just for a RM. County and Township will need to see the engineers plan before voting on it.

Reply by Lee/AR on 11/25/07 7:47pm
Msg #222855

What we all seem to forget (self included) when offering...

opinions, advise, etc., is that each State, County, Township and City has their own rules and one size does NOT fit all. What works in rural Illinois or Missouri or Arkansas or Colorado is not likely to be the same as Orange County, CA or New York City.

Reply by Ernest__CT on 11/26/07 12:14am
Msg #222890

Stop it. NOW.

We have absolutely no place in this discussion. Any of us who are not attorneys must not express opinions about such things.

IT IS NOT OUR BUSINESS. PERIOD.

Reply by Pat/IL on 11/26/07 12:24am
Msg #222893

Re: Relax, Ernest.

This is America. We can discuss anything we want. For crying out loud, they actually have a TV series called Li'l Bush, a total bash fest of our president, and you're worried about discussing acreage?

Reply by Carole Breckbill on 11/26/07 7:30am
Msg #222909

Re: Relax, Ernest.

Indeed. These discussions at least let us know there are strange animals out there waiting to pounce!

Reply by BrendaTx on 11/26/07 8:02am
Msg #222913

I disagree, Ernest.

I believe this is another good discussion which pertains to the business...in Texas you can express an opinion about anything...just don't give legal advice. No one is here getting legal advice...just trying to understand what the borrower's position was and why he stopped the signing.

(Smart bwr, btw.)

Reply by noteclub/MD on 11/26/07 11:42am
Msg #222926

Re: Stop it. NOW.

Thank You - you are so right about this.

Reply by Pat/IL on 11/26/07 12:19am
Msg #222891

LJ, the property to be encumbered is between the borrower and the lender. If there has not been a legal description created for the specific 10 acres, a surveyer may need to do the job. No big deal, surveyers need work too.