- August 18, 1994
- New York State Counsel, Managers, Underwriters and Agents
- Insuring Reverse Mortgages
The following is a summary review of closing procedures for insuring reverse mortgage loans made by lenders whose loan documentation has been approved by counsel.
Certification of Parties: Title report must be carefully prepared. If the application calls for title in one party, but we certify in a husband and wife, we should make sure that the proper exceptions are raised.
Affidavits and Proofs: To streamline the closing, have as much of the closing paperwork completed in advance of closing as possible. An affidavit of title, the affidavit for the survey endorsement, and in appropriate cases, a form of affidavit in connection with proof of death, heirship and intestacy, should be included with the title report. If any other matter can be cleared by affidavit, an affidavit form should also be included with the report. Items which require clearance should be noted as such.
In order to establish the informed consent of the borrower to the transaction, a copy of the borrower's statement required under RPL §280.2(g) or 280-a.2.(j), indicating that the borrower has received the available counseling, or has waived same, should be obtained from the lender.
Title Bill: A preliminary title bill, complete with all endorsement charges and estimated recording fees should be generated and transmitted at the time closing is scheduled. A charge should be made for running a second continuation for the notice of right to cancel. There is no mortgage recording tax on a qualified reverse mortgage.
Endorsements: If any of the endorsements required by the lender cannot be issued, that must be noted in the report. A specimen reverse mortgage endorsement must be attached to Schedule B of the report.
Taxes: An exception to be added to Schedule B as follows:
"Closer Note: Any taxes which have become a lien but which have not yet been paid must be picked up at closing."
Mortgage Payoffs: The payoff letters should be obtained by the lender in advance
of closing, and figures confirmed by the closing department. Closer's
pickup should be reflected on the title bill.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.