- January 16, 2008
- All Issuing Offices except Delaware, Florida, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Texas.
- ALTA Endorsements 14.3 (Reverse Mortgages)
The purpose of this bulletin is to clarify the procedures for reverse mortgages. Reverse mortgage loans are made to persons that are at least 62 years of age. Payments are not due until the mortgagor(s) die or leave the property. The most common reverse mortgage program is the HUD Home Equity Conversion Mortgage program (HECM);that contemplates two mortgages, one for the lender and a subordinate mortgage for HUD. Fannie Mae does purchase some separate reverse mortgages under the Home Keeper program.
The Alta 14.3 Endorsement includes an insuring provision which states that the Company insures against loss or damage sustained by the insured by reason of: The failure of the mortgagors to be at least 62 years of age at Date of Policy. This coverage is important to the Lender because if the borrower(s) are not 62 at Date of Policy the loan may be considered to be invalid or not enforceable.
The Underwriting Requirements for reverse mortgages are as follows:
- Verify the mortgage discloses that it is a reverse mortgage that secures future advances. Also verify that it complies with applicable state requirements for disclosure of future advances in the Underwriting Manual on Virtual Underwriter under 17.46.12 "Revolving Credit (Future Advance) Endorsements: Future Advance Forms to Use for Each State".
- Verify the mortgage is a HUD HECM mortgage or a Fannie Mae Home Keeper Mortgage. Otherwise, please call Stewart underwriting personnel before issuing this endorsement.
- Issue for the Amount of Insurance requested by the lender.
- Secure government issued photo ID for each mortgagor and verify that each mortgagor is at least 62 years of age. Otherwise, delete Subparagraph 2(d) of the endorsement.
Please Click Here to view guidelines for ALTA Endorsement 14.3
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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.