Welcome

1. AWARENESS

Consumer (i.e., senior homeowner or adult child) learns about reverse mortgages or particular product from article, ad, direct mail, word-of-mouth, etc.

2. ACTION (KNOWLEDGE IS POWER)

Consumer seeks more information, by contacting an experienced knowledgeable reverse mortgage loan broker, like Jamie Michael Smith who has helped over 10,000 homeowners understand this safe program.  Jamie began his Reverse Mortgage career with one of the very first Reverse Mortgage companies in 1994: TransAmerica Homefirst 

3. COUNSELING

Both Jumbo and FHA/HUD Reverse Mortgages require counseling from a HUD-approved housing agency to explain different options available to the cunsumer and makes certain the consumer is eligible for a Reverse Mortgage.

4. APPLICATION / DISCLOSURE 

Consumer fills out application for Reverse Mortgage with Lender/Broker and selects benefit option: Line of credit, lump sum, fixed payments for a certain period of time, life-time  payments or a combination. 

5. PROCESSING

Lender processes loan, orders credit, appraisal through licensed AMC, verifies title.

6. UNDERWRITING 

After receiving all pertinent information and data, lender finalizes loan parameters with consumer. 

LESA (Life Expectancy Set-Aside) 

Established by FHA in 2015. Is an amount withheld from the reverse mortgage proceeds for the payment of property charges throughout the life of the loan. (i.e. Proerty taxes, Homeowners insurance and HOA dues)  Most reverse loans DO NOT require LESA but if the consumer has had some late pays and poor credit history LESA is a necessary built in budgetting tool. 

7.  CLOSING

Following approval, closing (signing) of loan is scheduled.  Initial and expected interest rates are set.  These affect the amount of funds available to consumer, along with the age of borrower(s) and value of the home.  Closing papers and final figures are prepared.  Closing costs are normally financed as part of the loan.  Lender or title company has consumer sign loan papers.  

8.  DISBURSEMENT

Consumer has three business days after signing papers in which to cancel the loan ("three-day right of recission).  Upon expiration of this period, the loan is disbursed - consumer gets access to the funds, in the form of the payment option selected.  Any existing debt on the home is paid off.  A new lien is placed on the home. The borrower may use the proceeds for any purpose.  The interest rate charged on the loan generally is adjusted periodically (i.e. monthly or yearly).  During the life of the loan the homeowner will receive a monthly reverse mortgage statement similar to a "forward" or regular mortgage statement showing: current total loan balance, loan number, servicer phone number, original principle limit or, growth of principle loan amount, Line of credit balance, interest rate,  etc.  

9.  REPAYMENT

CONSUMER DOESN'T  MAKE ANY MONTHLY MORTGAGE PAYMENTS TO THE LENDER DURING THE LIFE OF THE LOAN.  THE REVERSE MORTGAGE BECOMES FULLY REPAYABLE UPON: THE DEATH OF THE BORROWER OR THE LAST CO-BORROWER; THE SALE  OF THE HOME BY THE BORROWER, A PERMANENT MOVE FROM THE HOME BY THE BORROWER (I.E. NURSING HOME, OR ANOTHER EVENT IN WHICH THE HOME IS NO LONGER THE PRINCIPLE RESIDENCE, OR DEFAULT BY NOT PAYING PROPERTY TAXES, HOMEOWNERS INSURANCE OR APPLICABLE HOA DUES) THE LOAN MAY BE REPAID BY THE BORROWERS HEIRS/ESTATE, WITH OR WITHOUT THE SALE OF THE HOME.  THE REPAYMENT OBLIGATION GENERALLY CAN'T EXCEED THE HOME'S VALUE OR SALES PRICE.  

NOT ALL APPLICANTS WILL QUALIFY

LASTLY AND MOST IMPORTANTLY......TITLE DOES NOT CHANGE