Posted by Kenny Services - Dawn on 12/1/11 11:42am
Msg #405442

Reverse Mortgage

Hi all, need some advice please. Just got called to do a reverse mortgage and ive never done one before but understand the concept of one so I am not sure I should except. are they hard to do? how difficuolt are they? do you think i should try it or pass on it? Thanks for any input.

Reply by OR on 12/1/11 11:53am
Msg #405444

They are not hard to do. There are 2 notes and 2 Deed of trust in them. One to the lender and one for the insurer. Everything else is very much the same. Go ahead and get your feet wet. You will do fine. You are not selling the loan , you are signing papers thats all.

Reply by Kenny Services - Dawn on 12/1/11 11:57am
Msg #405446

Thank you guys so much for your input, i feel better now:-) I am gonna do it. Besides if I dont just do it, I will never learn how. Thanks again.

Reply by C. Rivera Chicago Notary Services on 12/1/11 3:13pm
Msg #405492

OR - yeah, she sort of is selling the loan. If the NSA does

not know what the hell they're doing at the closing table, do you think the BO's are going to sign the loan? Or that the hiring party will hire them again? Uh, nope!

And if they do sign, you know they're going to complain (>50%) and the major complaint will be that the NSA didn't know what they were doing, or was completely incompetent, probably both.

There is much involved in our profession than merely notarizing signatures on loan documents! I seriously hope you;re not one of those NP's that claim to be an NSA, but that's neither here or there, and in the end, I don't really care. However, you're advice here was very "lacking" to say the least.

NEWBIES: Please do your homework BEFORE venturing off into territory that is a bit more involved than just notarizing a sig on an additional deed and note!

Reply by Les_CO on 12/1/11 11:53am
Msg #405445

Pretty much the same as a standard refi….if you can read, you can do it. They do take a little longer as the borrowers almost always have questions.

Reply by JandB on 12/1/11 12:07pm
Msg #405449

Most questions should be referred to the LO. It's easy to confuse the borrower if you explain something differently than the LO explained it. Allow time because the packages can be large and the signers can to slow. It's not uncommon for an adult child to be at the closing. I like it when that happens. I always try to review the package before I go so I can recall the docs I don't see every day. BTW: charge at least $25 more than usual. They will pay it and frequently, you will earn it.

Reply by RickG/CA on 12/1/11 11:59am
Msg #405447

The presentation shouldn't be too much different, sometimes you may have to speak a little louder, a little slower, and repeat a thing or two. The physical signing may be a challenge, so you might be inclined to allow for more time. Some of these folks just like to have vistors and that's one of the coolest parts for doing reverses.

Good luck

Reply by Larry/IL on 12/1/11 12:45pm
Msg #405460

They are fairly easy. Packages are considerably larger, borrowers usually take much longer sign, many times needing to call their L/O. Don't be surprised if your at the table 2-2.5 hours. My min is $150 for one less that 15 minutes drive in my neighborhood and up from there.

Reply by C. Rivera Chicago Notary Services on 12/1/11 12:27pm
Msg #405455

If you are not comfortable with doing these types of

closings, then don't do them. And especially do not attempt to close if you do not know what you are doing!

These can be tricky, and most seniors are vary wary about the whole process.

If you can't answer some basic questions (non-UPL) about this type of loan, then I'd recommend taking a pass, then doing some research on these.

Reply by Glenn Strickler on 12/1/11 2:08pm
Msg #405475

I have found that borrowers who take a reverse

mortgage are far more knowledgable about what they are doing than a typical person who is buying a home or refinancing. That has been my experience. Many times, there also has been a loan officer present also. This could be due to the fact that in California, BOs are required to attend a mandatory counseling session.

As others have said though, know the basics of a R/M and the differences between a typical loan and a R/M. Be careful of crossing the UPL line.

Reply by C. Rivera Chicago Notary Services on 12/1/11 2:52pm
Msg #405489

Glenn, Il has no mandatory counseling sessions...

I've helped closed quite a number of reverse mortgages, and most involve seniors sitting at the table, along with their pushy sons and/or daughters, who I suspect are the ones pushing for the loan, asking all sorts of questions about the loan. No loan officers EVER attending, some barely available on the phone!

I've had two, in the last four years, where the BO's were overjoyed about getting the loan cause they wanted to use the cash to travel...now that's living!! =)

Reply by Linda_H/FL on 12/1/11 3:21pm
Msg #405493

I believe the counseling is a federal regulation n/m

Reply by C. Rivera Chicago Notary Services on 12/1/11 3:28pm
Msg #405494

perhaps given by the lender, not required by IL state law... n/m

Reply by Linda_H/FL on 12/1/11 3:35pm
Msg #405495

HUD regulation I think..I've never seen a RM without it n/m

Reply by C. Rivera Chicago Notary Services on 12/1/11 5:42pm
Msg #405515

Fed law does requires counseling either thru the lender

or approved HECM counselors....

Reply by ReneeK_MI on 12/2/11 8:27am
Msg #405568

Fed law prohibits lenders from doing the counseling

On Hud-insured R/M's, the lender is prohibited from any involvement whatsoever in the counseling, the selection of the counseling agency, or even scheduling the counseling session. Counseling must be selected & arranged by the prospective borrower, and the counseling agent must be an independent 3rd party approved as a HECM counseling agent.

Reply by GOLDGIRL/CA on 12/1/11 2:48pm
Msg #405487

Re: If you are not comfortable with doing these types of

I agree with C. Rivera - My general rule of thumb anymore is if the LO is not going to be present at the signing, they better have a pretty good excuse or I'm not going. RMs are incredibly complicated (the actual signing isn't tho) but to seniors this is their life floating before their eyes and no matter how much time their LO has spent with them previously explaining stuff over and over, they are for the most part completely unprepared for the awesome amount of paperwork we walk in with and no way am I going to attempt to explain anything to them beyond the normal stuff. Too dangerous. Too much room for confusion and misunderstanding. Maybe this is just me, tho.

I've done a few RMs without the LO present that have gone perfectly fine, and I've had a few where the LO had to get off his/her lazy ass and get to the signing because of terrified borrowers who had absolutely no idea what was going on. Other times, uncomfortable borrowers wanted to run a few things by the absent LO who would not return phone calls, thus dragging out the signing for 3 hours or so ... never again!

RMs - though very simple paper work as far as the signing goes - are not your average refi or purchase in terms of getting edgy borrowers through it.

Reply by HisHughness on 12/1/11 1:22pm
Msg #405470

There are critical aspects of a reverse mortgage...

...that differ from the typical refinance, and that most borrowers are curious about. Unless you understand those aspects, and are prepared to explain the documents relating to them, I would suggest you ground yourself more thoroughly in how they differ.

Reply by JanetK_CA on 12/2/11 2:11am
Msg #405557

Re: There are critical aspects of a reverse mortgage...

I tend to agree with Hugh -- or at least do some research online to get an understanding of the basics first. Like what are the differences between the two Notes and two DOTs, why is the loan amount on the DOT what it is, what's the difference between a lump sum payout and monthly payments, etc., etc.

I do think there's lots of good info available online if you look for it.

Reply by Cody on 12/1/11 5:41pm
Msg #405514

Don't let the ninnies in here scare you.....You will never learn if you don't go do....

Reply by C. Rivera Chicago Notary Services on 12/1/11 6:01pm
Msg #405519

ninnies Cody, really...here we go with name calling... n/m

Reply by jba/fl on 12/1/11 6:07pm
Msg #405520

I agree - sometimes you just have to hold your nose and jump into the deep end of the pool.

Reply by GOLDGIRL/CA on 12/1/11 7:59pm
Msg #405534

Hope ya'll don't drown (ninnies) n/m

Reply by Kenny Services - Dawn on 12/1/11 9:49pm
Msg #405546

Thanks to everyone for your excellent input. I Love Notary Talk for the encouragement, knowledge, Wisdom and sometimes even for the sense of humor that is shared. I am a firm believer that if you dont jump into the water you'll never learn to swim. To those who feel I should wait....please remember you had to learn it once also and someone allowed you to do that, however, I do appreciate your concern though and appreciate your input :-)

Reply by CJ on 12/2/11 10:29am
Msg #405590

I had a Reverse Mortgage LO that I liked a lot. I would find the page with a summary of the numbers, and the LO would review it with the borrower saying, "Remember how I explained this to you earlier?" It was a huge help because of course, I had no idea what special arrangements were made when putting the loan together. Once the borrower understood everything, we would sign like the wind. If we got stuck, the LO explained how this was the number that we saw earlier on the sheet.

The LO told me that she was some sort of certified Reverse Mortgage Specialist. The borrowers also have to take a class to understand their reverse mortgages. Notaries are not required to take any formal training to understand or explain Reverse Mortgages, and we just pick it up over time. I think it is ridiculous to expect a NOTARY to explain something as important and complicated as a reverse mortgage. Maybe some notaries happen to be able to do that, but some notaries are not. Would you want your grandparents signing a reverse mortgage that some random notary was explaining to them?

Reply by GOLDGIRL/CA on 12/2/11 12:49pm
Msg #405605

I answer to your question:

"Would you want your grandparents signing a reverse mortgage that some random notary was explaining to them? "

Apparently, there are a couple of NR posters who would.

Reply by JanetK_CA on 12/2/11 4:26pm
Msg #405636

The "explaining" should happen before we get there. But sometimes it's a leap (and this includes traditional refi's, as well), from what the borrowers think they understand and what is on the documents, since they're usually seeing most of them for the first time when we show up.

This concept has been discussed a lot lately, but probably can't be discussed enough. I believe that the notary conducting the signing should be able to help bridge that gap, not by providing interpretation of what is in the documents or defining terms or giving opinions (all UPL, imo), but by knowing where to find the key content in the documents so that people can have a certain level of comfort that what they're signing actually reflects all the discussions they've been having from the beginning of the process, or to be able to catch any errors that might exist.

I feel that we need to be able to "point" to more than the signature line. Most of the time, the answer to people's questions is in the documents and we're not providing truly professional services unless we know where to find that info.

The LO can take those questions to the next level and address issues that are NOT included in the documents, but that were discussed throughout the process, so I agree that their attendance can be invaluable. For seniors doing RMs, it also gives them an additional level of comfort, as I believe they tend to see their lender contacts more as "consultants" and as their representative, than as a salesperson trying to sell them a loan - especially the older they are. (IMO, where any particular LO actually falls on that continuum between those two roles depends a great deal on the individual.)