Posted by YvonneAA/NY on 9/20/07 6:22pm
Msg #212322

CEMA and Reverse Mortgage

Since there is more work involved is it justifed to charge little more for these type of signings, need suggestions, if so how much more???

Reply by Todd/OH on 9/20/07 6:28pm
Msg #212325

My experience has been only one extra mortgage to notarize. It hasn't been a big deal. I charge the same.

Reply by DonR_NYC on 9/20/07 7:14pm
Msg #212333

Yes it is appropriate to charge for a CEMA as usually there are 2 notes (consolidated note and new money note) and two mortgages; the full loan amount and the new money amount. Depending upon the lender or Title Company you may have multiple copies of each.

As for reverse mortgages, I don’t do them. My personal opinion is that it is taking advantage of senior borrowers. I know a few title companies that won’t handle them either for the same reason.

Reply by Marie_MD on 9/20/07 7:55pm
Msg #212342

Please tell me that you went to the Hud site and learned about these mortgages. I close about four of these a week. Most of the seniors would have to sell their homes and move in to sub-standard housing, if it weren't for these loans. I am 58 and when I turn 62 I hope to be able to have a reverse mortgage. Because my income will decrease dramaticlly after I retire, I will no longer be able to mantain my current mortgage. If I am unable to have a reverse mortgage I will have to work full time until I die or sell my home and move into section 8 housing. This is not why I have worked so hard for so many years. Not everyone has been able to have a decent retirement income. And even with a good retirement many are finding themselves house poor. Please act responsibly and help those who need it.

Reply by LJ on 9/20/07 8:01pm
Msg #212345

I did one a month or so ago for a gentleman. He was thrilled to pay off his mortgage and get a little extra income. Without a mortgage payment and a little extra cash each month he could stay in his home longer and go fishing. His only child told him to go for it. Enjoy it while you can. I know the closing costs can be high. This gentleman worked 2 jobs all his life. He deserves to do a little fishin and not worry any more. He said it was worth every penny of the closing costs to enjoy life a little.

Reply by MelissaCT on 9/20/07 8:55pm
Msg #212353

They are also good for people who are taking medications & can't afford the prescription drugs while living in their homes that are often paid for. There are people who are taking half doses of medications because they can't afford to take their meds as needed, but they are not having to be in a nursing home yet.

Things like these can improve quality of life. They're really (in my lay opinion) similar to an annuity, at least in structure, and are regulated & backed by the government.

I don't see how seniors are taken advantage of by reverse mortgages.

Reply by Becca_FL on 9/20/07 8:28pm
Msg #212350

>>>As for reverse mortgages, I don’t do them. My personal opinion is that it is taking advantage of senior borrowers. I know a few title companies that won’t handle them either for the same reason.<<<

Don, my personal opinion is that you are severely misinformed. A reverse mortgage can mean financial freedom to those in their later years. There is nothing about a reverse mortgage that "takes advantage" of seniors, otherwise, I assure you, the government would not back the program. That's like saying FHA is a scam. Some of the happiest borrowers I meet are those taking out an HECM. In fact, I've told my father to feel free to utilize the program. I don't want his home, nor do my siblings, Why not enjoy the fruits of your labor in the latter years of life?

Don, please get informed about the reverse mortgage product. You have nothing to lose and signings to gain.

I would recommend an ebook by Brenda/TX on how to handle RM closings.

Reply by BrendaTx on 9/20/07 9:50pm
Msg #212356

Don, The only downside I have been able to discern in a reverse mortgage are the closing costs. The PMI and the origination fee will total around 4% of the maximum claim amount and lots of times they need repairs and then there's the title and escrow fees. It's not unusual to see $10,000 in closing costs and $40,000 to the borrower which is a big hit, but the bottom line is it often gets them out from underneath a mortgage and it makes them able to have surplus cash, plus a place to live out their life.

Because I didn't want to do harm to a senior citizen I really looked these over and decided it's an option for people strapped by cash. Of course, if you don't need a reverse mortgage, it would be foolish to get one because it does cost to get one.

Reply by MichiganAl on 9/21/07 1:35pm
Msg #212476

Brenda, your opinion please - One other downside I see

Other than the cost, as you mentioned, the one other downside I can see is the possibility of little money being left for any heirs. I can see the interest building up over several years to the point where their may not be much equity left in a home when it's sold off depending on their longevity. I find that to be a minor issue at best and of no relevance in many situations. This is about their life, their finances, their situation.

Don, as others have said, I think you should take the time to learn more about these mortgages. Brenda's e-book is an excellent resource.

Reply by BrendaTx on 9/21/07 7:21pm
Msg #212527

Re: Brenda, your opinion please - MichiganAl

I agree...reverse mortgages pretty much do strip the equity in a home so that the heirs will have little at the end of it all. Not in all cases, but in most where the maximum claim amount is tapped out...at least Mom and/or Dad had relief for their time here.

Let's face it. If the final result wasn't going to benefit the lenders, there would be no reverse mortgages.

Reply by jba/fl on 9/20/07 9:59pm
Msg #212357

Don - you need to educate yourself on these. Truly, these are the only loans that I feel totally comfortable in the signings. As others have stated: medications, lack of care in house poor situations, etc and many other factors - these borrowers heave sighs of relief when they are done signing. If they live to be 115 they will be in their own homes, not somewhere they may not wish to be. I just turned 62 and will be doing one soon - and hope to become LO so that I may help others find the peace of mind that is so richly deserved in final years.

I don't charge any more than for regular closings - I don't find they take any longer (well, they might, but I have such a good time with them as usually the entire family or at least one or two family members are present - an occassion for champagne and celebration if you will) and I just can't see my way past the good times that are had by all.

Some TC's don't handle because they may not be authorized - I really don't know, but I feel that you are sorely misinformed all the same.

Reply by Marinna/FL on 9/20/07 10:48pm
Msg #212362

I agree with all of you on your views in regard to Reverse Mortgage. My mother did one after my father passed away, in 2005.

Without a Reverse Mortgage, my mother would not have been able to afford to live on the income that was left after my father died. My mother was afraid at first to let us know how financially in trouble she was, and we could see the sadness growing (not realizing, yes, she was grieving the loss of my father, having never been apart from him for 58 years, but there was more...she was struggling to keep her house).

My parents always lived tight, with nine children, we learned how to be thrifty and we did without a lot of things, but we were happy kids, always had nice birthdays and Christmas's and my father always worked 2-3 jobs, 7 days a week. There was never much left over after their mortgage payment and bills. So, when the monthly income decreased after my father died, my mother tried to make ends meet, but she was at the point where she had to let us know what problems she was having, and it was embarrassing for her to ask her children for help, even though we were all willing to chip in and help with her expenses. It hurt her pride. Needless to say, with the amount of equity in her home, a Reverse Mortgage was the perfect answer for her.

She no longer has an $800 a month mortgage, and she was able to do things to her home that she would have never be able to afford before. She had her house tiled, she hired a landscaper, and more, in addition to having her home paid off, she has a line of credit, and feels secure should an emergency arise. She tells me "I feel like I've won the lottery!" She plans to live in this home for the rest of her life (she's 78, and in good health) and only needs to pay her yearly taxes and insurance, since she keeps title to her home. Misconception #1: The bank owns your home--wrong. If you fail to pay your taxes and/or homeowners insurance, then and only then you could put your home at risk (but you would also be doing this without a Reverse Mortgage). When my mother passes (which I hope is a long, long time from now) we, the heirs will either refinance her home (it was built in '97 and in a very nice area) or we may decide to sell it, and at that time, we will pay back the Reverse Mortgage. If we sell the home, any equity remaining in the home will be split between us, the heirs. Remember, a Reverse Mortgage is a non-recourse loan, insured by the FHA, so if my mother lives to be 110 and takes out a second reverse mortgage, spends more than what we end up being able to sell the home for...the shortfall is made up by the FHA. No other assets can be touched, and the heirs will not be responsible for any shortfall.

A Reverse Mortgage is not for everyone, but in my mother's case, it was an answer to her prayers. I would seriously consider doing one myself, because I may not want to work until I'm 78 years until my mortgage is paid off. Supplementing my retirement income through a Reverse Mortgage is this: a great comfort to know it's there, after the age of 62.

Reply by Therese on 9/20/07 11:24pm
Msg #212364

They majority of my closings are Reverse Mortgages. I only charge a bit more for these if there are e-docs even still that depends on the lender. I have printed out upward to 175pages (thats not including borrowers copy). Otherwise I charge the same. Just so you are aware these signing could take a little more time because there is a little more hand holding. Sometimes your dealing with clients who have physical limitations. If you don't have patience and just want to get in and out these closings wouldn't be for you.

In response to Reverse Mortgages take advantage of seniors, I must agree with the majority. I have sat a many a table where the client has cried in relief to feel that they can live again and in their own home too boot. In fact, just today I did a closing where the client was just about to be in foreclosure and a Reverse saved her home and gave her a monthly allowance. First thing she said she was going to do is get her hair done. Amazing how little things like that just make people happy.

Reply by Dawn/PA on 9/21/07 6:59am
Msg #212371

Re: CEMA and Reverse Mortgage n/m

Reply by Dawn/PA on 9/21/07 7:02am
Msg #212373

I personally love doing the reverse mortgages and only charge a little bit more because it will be a longer closing as a general rule. All of the seniors I have signed have been happy to do it and fully understand what they are doing. I wish I was doing more of them.

Reply by MikeC/NY on 9/21/07 8:38am
Msg #212385

There's not much difference between a CEMA and a regular refi - you've got maybe 3 additional documents (the CEMA itself, and the gap mortgage and note), but I don't think that justifies charging more.

A reverse is not necessarily any more work either, at least not the few I've done - the disclosures are a little different, and you've got two notes and two mortgages. The signing might take a little longer because the borrowers may not sign as fast, but I don't know that a higher fee is justified.