Posted by Bear900/CA on 6/6/13 1:33pm
Msg #472440

Bring your mirror and stethoscope

I’ve been kicking around with UW on a HECM loan for a mentally incompetent whose trustee daughter would do the signing. Here’s one comment I thought you would appreciate and made me chuckle (I’m a sick person).

“a notary would need to actually witness the incompetent borrower to ensure she’s actually alive.”

Should we charge extra for that?

Reply by Yoli/CA on 6/6/13 1:38pm
Msg #472441

... and charge doctor fees.

Reply by MW/VA on 6/6/13 6:20pm
Msg #472483

That's interesting. I'm sure they want to make sure a POA

or Guardianship is valid, since they are only good while the person is living. Some people actually think they can use them after the fact. ;-)

Reply by Doris_CO on 6/6/13 8:19pm
Msg #472505

I don't understand how this Reverse Mortgage loan can be done if the borrower is mentally incompetent, even if the daughter has the POA.

Reply by Bear900/CA on 6/6/13 11:42pm
Msg #472518

Use of POA on HECM loans

See HUD Mortgagee Letter 4235.1 Rev-1, Chapters (4-7A) b. , and 6-7

6-7 "BORROWERS LACKING LEGAL COMPETENCY. Power of attorney (durable or
otherwise) may be used for closing documents."

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh/4235.1

There are other requirements but the one I posted hit my funny bone.

Reply by Linda_H/FL on 6/7/13 7:37am
Msg #472528

What Bear900 said,...AND

many DPOA's specifically give the attorney-in-fact (or agent) the authority to "mortgage, sell, invest and reinvest" assets of the principal.

If acceptable in conventional loans, why would it be any different in reverse mortgages?

Reply by Teresa/FL on 6/7/13 8:26am
Msg #472535

I had a signing where the son signed as Guardian

for his parents. As he explained it to me, he was granted legal guardianship when his parents were judged incompetent. They were relatively well off, financially, but needed the reverse mortgage so they could continue to live in their home while being taken care of by home health aids. The son lived only a mile from them.

Reply by Linda_H/FL on 6/7/13 8:50am
Msg #472537

Yep..Florida Guardianships give the Guardian that

authority...

They are also strictly supervised by the Probate Court, and the Guardian has to file financial and wellbeing reports every year.

Reply by Bear900/CA on 6/7/13 11:55am
Msg #472552

I'm bummed

that the guardian was able to live away from the mortgaged house on that deal.

My UW says the daughter must LIVE IN in the home and be 62. She lives just a block away. That killed the deal for me on an otherwise good loan.

Reply by ReneeK_MI on 6/7/13 12:13pm
Msg #472554

Re: I'm bummed

Interesting, can't find anything in the guidelines requiring what the UW is requiring:


III. POWER OF ATTORNEY/CONSERVATORSHIP GUIDELINES

A. Mortgage Loan Application

1. Borrowers with legal competency:

a. All borrowers must sign mortgage loan application.

b. Mortgage loan application may not be executed by power
of attorney.

2. Borrowers lacking legal competency:

a. Incompetent borrower may not sign the mortgage loan
application.

b. Court-appointed conservator or guardian may execute
any necessary documents, including the mortgage loan
application. The lender must provide evidence that
the conservator or guardian has authority to obligate
the borrower.

c. An "agent" or "attorney in fact" holding a durable
power of attorney specifically designed to survive
incapacity and avoid the need for court proceedings,
may execute any necessary documents, including the
mortgage loan application.

(1) To be valid, a durable power of attorney must be
prepared when the "principal" is competent to
understand the nature and significance of the
instrument.

(2) The durable power of attorney must comply with
state laws regarding signatures, notarization,
witnesses, and recordation.

_____________________________________________________________________
3

B. Closing Documents

Power of attorney (durable or otherwise) may be used for
closing documents. Any power of attorney must comply with State law and
allow for the Note to be legally enforced in that jurisdiction.

C. Counseling Session

For borrowers lacking legal competency, the counseling session
may be conducted with an "agent" or "attorney in fact" holding a power of
attorney, or with a court-appointed conservator or guardian.

Reply by Teresa/FL on 6/7/13 12:51pm
Msg #472559

Re: I'm bummed

He and his wife lived only a mile away.

It was quite sad, this was the only way his parents could continue to live in their home since they had virtually exhausted all of their financial reserves. They needed to pay for the home health aids as they were no longer able to care for themselves. The son wanted them to be as comfortable as possible in the time they had left.

Reply by Teresa/FL on 6/7/13 12:48pm
Msg #472557

He told me that he had to get approval from the court prior

to applying for the reverse mortgage.